New judgment: Eclairs Group Ltd & Anor v JKX Oil & Gas plc  UKSC 71
02 Wednesday Dec 2015
On appeal from:  EWCA Civ 640.
The “proper purpose” rule in the Companies Act 2006, s 171(b) – a director must “only exercise powers for the purposes for which they are conferred” applied to the provision in the respondent company’s articles (article 42, empowering the board to impose such restrictions where a statutory disclosure notice had not been complied with). The article 42 power could be exercised only to provide an incentive to remedy the default or a sanction for failing to do so. The board had reasonable cause to believe that there was an agreement or arrangement between the addressees. But the board’s purpose was to influence the fate of the resolutions at the AGM.