Webster v ESMS Global Ltd [2025] EWHC 3107 (Ch)

In a recent judgment, HH Judge Cadwallader (sitting as a High Court Judge) decided a novel
point of law relating to section 292 of the Companies Act 2006 – an important, but rarely
debated, provision under which shareholders in a company can require it to circulate a proposed
written resolution.

In Webster v ESMS Global Ltd [2025] EWHC 3107 (Ch), the company was deadlocked, with
the claimants and defendants each controlling an equal number of shares. The claimants sought
to appoint an additional director by requiring the company to circulate a written resolution
under section 292. However, the defendants refused to approve the circulation of that
resolution.

The claimants brought proceedings in the High Court seeking an order compelling the company
to circulate the written resolution. The defendants resisted the proceedings on jurisdictional
grounds: they argued that under section 292, as properly interpreted, the Court has no power to
make an order to compel such circulation. They pointed out that the statute contains no express
stipulation allowing the Court to make such an order and only prescribes a criminal sanction
(and no civil remedy) for non-compliance.

In his judgment Judge Cadwallader, after reviewing a long line of authorities, accepted, as a
general principle of statutory interpretation, that where a statute creates a new obligation and
prescribes a specific remedy (such as a criminal sanction), that indicates that the specified
remedy was intended to be exclusive ([41]-[42] and [51]). However, he held that the present
case fell within an exception to the rule. He interpreted section 292 as creating a private right
on the part of shareholders to compel the company to comply with its obligation to circulate a
proposed resolution and concluded that Parliament must have intended that private right to be
enforceable by way of injunction, because (he held) the threat of criminal prosecution was
inadequate for that purpose ([53]-[58] and [86]). In doing so, he declined to follow previous
analysis from leading commentators (including Kosmin & Roberts: Company Meetings and
Resolutions and Hannigan: Company Law) which had suggested that the Court has no power
to enforce section 292 by way of an injunction.

This decision will be of particular interest to company practitioners: not only does it address
the novel question of whether the Court has power to make an order under section 292 to
compel a company to circulate a proposed resolution, but the judge’s approach would be likely
also to have wider ramifications for what powers the Court has to enforce other provisions of
the Companies Act 2006. In addition, this judgment provides novel guidance on the Court’s
task of statutory interpretation, especially in situations where legislation prescribes a specific
remedy for a statutory obligation.

Daniel Lightman KC and Wilson Leung represented the defendants in Webster v ESMS Global
Ltd [2025] EWHC 3107 (Ch).  A full copy of the judgment can be viewed here