Apparent Authority of Corporate Agents Created by Shareholders (If Any): Part 1

PG Watts on UK law

I recently ran across an interesting article by Peter G. Watts, an emeritus professor at the University of Auckland and a senior research fellow at Harris Manchester College (Oxford). The title was what first struck me: “Acting on the Apparent Authority of Shareholders” (137 LQR 20 (2021)).

I don’t think of shareholders as being either agents or apparent agents of the corporation with actual or apparent authority, so the title intrigued me. I also don’t think of the corporation, the board of directors, or the officers and employees as agents of the shareholders. Sadly, it turns out that latter issue is the one with which Watts is concerned. Nevertheless, it’s an interesting read and posed some interesting questions about the role of agency law in USA corporate law.

Watts’ article is a casenote on the decision of the UK Privy Council in Ciban Management Corp v Citco (BVI) Ltd [2020] UKPC 21. (I was unaware of it, but it turns out that the Judicial Committee of the Privy Council is the final court of appeals for the British Overseas Territories, Crown Dependencies, some domestic UK disputes, and some Commonwealth nations. The case at hand arose in one of the former; namely, the British Virgin Islands.

In this post, I discuss Watts’ analysis of the case under UK law. In tomorrow’s post, I will discuss how I think the case would come out under US law.