Section 170: Derivative actions

170. Derivative actions (1) Subject to subsection (3), the Court may, on the application of a shareholder or director of a company, grant leave to that shareholder or director to— (a) bring proceedings in the name and on behalf of the company or its subsidiary; or (b) intervene in proceedings to which the company or any related company is a party for the purpose of continuing, defending, or discontinuing the proceedings on behalf of the company or its subsidiary, as the case may be. (2) Without prejudice to subsection (1), in determining whether to grant leave under that subsection, the Court shall have regard to— (a) the likelihood of the proceedings that may follow; (b) the costs of the proceedings in relation to the relief likely to be obtained; (c) any action already taken by the company or its subsidiary to obtain relief; (d) the interests of the company or its subsidiary in the proceedings being commenced, continued, defended, or discontinued, as the case may be. (3) Leave to bring proceedings or intervene in proceedings may be granted under subsection (1), only where the Court is satisfied that either— (a) the company or related company does not intend to bring, diligently continue or defend, or discontinue, the proceedings, as the case may be; or (b) it is in the interests of the company or its subsidiary that the conduct of the proceedings should not be left to the directors or to the determination of the shareholders as a whole. (4) Notice of the application shall be served on the company or its subsidiary. C35 – 111 [Issue 1] Companies Act (5) The company or related company— (a) may appear and be heard; and (b) shall inform the Court, whether or not it intends to bring, continue, defend, or discontinue the proceedings, as the case may be. (6) Except as provided for in this section, a shareholder or director of a company is not entitled to bring or intervene in any proceedings in the name of, or on behalf of, a company or its subsidiary.