Re Jardine Strategic Holdings Ltd

• Jurisdiction: Bermuda
• Judgment Date: 14 February 2023
• Court: Supreme Court (Bermuda)
• Docket Number: Commercial Jurisdiction 2021 Nos xxx

In the matter of Jardine Strategic Holdings Limited

and in the matter of the amalgamation agreement between JMH Investments Limited and JMH Bermuda Limited and Jardine Strategic Holdings Limited

And in the matter of section 106 of the Companies Act 1981

[2023] Bda LR 9

Commercial Jurisdiction 2021 Nos xxx

In The Supreme Court of Bermuda

Whether documents held by publicly listed subsidiary companies are within the power, custody and control of their holding company — Test for “practical control” — Whether English rule relating to joint privilege between a company and its shareholders is part of Bermuda law — Whether a past shareholder can have access — Whether appraisal proceedings are hostile proceedings and whether an exception to joint privilege

The following cases were referred to in the judgment:

Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 WLR 627

Lonrho Ltd v Shell Petroleum Co Ltd [1980] 1 QB 358

Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2008] EWHC 56

North Shore Ventures Ltd v Anstead Holdings Inc [2012] EWHC Civ 11

Ardila Investments NV v ENRIC NV [2015] EWHC 3761

Pipia v BGEO Group Ltd [2020] EWHC 402

Berkeley Square Holdings Ltd v Lancer Property Asset Management [2021] EWHC 849

Wong v Grand View PTC [2020] Bda LR 80

Ivanishvili v Credit Suisse [2021] Bda LR 88

Re Abudawood (unreported 27 July 2022, FSD 134 of 2022)

Constantin Medien AG v Ecclestone [2013] EHWC 2676

O'Rourke v Darbishire [1920] AC 581

Mayor and Corporation of Bristol v Cox (1884) 2 ChD 678

Gourand v Edison Gower Bell Telephone Co (1886) 57 LJ Ch 498

Woodhouse v Woodhouse (1914) 30 TLR 559

Dennis & Sons v West Norfolk Farmers Manure & Chemical Co-op [1943] Ch 220

Sharp v Blank [2015] EWHC 2681

CAS (Nominees) Ltd v Nottingham Forest plc [2001] 1 All ER 954

BBGP Managing General Partners Ltd v Babcock & Brown Global Partners [2010] Ch 296

Wang and Wong v Grand View Private Trust Co Ltd [2021] Bda LR 29

CIA Barca de Panama SA v George Wimpey & Co Ltd [1980] 1 Lloyds LR 598

Re Hydrosan [1991] BCC 19

Arrow Trading v Edwardian Group [2005] 1 BCLC 696

Daniel v Exxon Services (Bermuda) Ltd [2011] Bda LR 54

Medlands (PTC) Ltd v Commissioner of the Bermuda Police Service [2020] Bda LR 26

Atos Consulting v Avis plc [2007] EWHC 323

Mr J Adkin KC, Mr C Hollander KC, Mr M Chudleigh, Ms L Williams, Mr D Thom, Mr M Watson, Mr D Duncan KC and Mr R Hawthorne for the Plaintiffs

Mr M Moore KC and Mr J Wasty for Jardine Strategic Holdings Ltd and Jardine Strategic Ltd

JUDGMENT of Hargun CJ

Introduction

1. These proceedings concern, as set out in the earlier Judgment of this Court dated 24 November 2022, 18 separate actions commenced by Originating Summonses whereby the Plaintiffs seek, pursuant to the terms of section 106(6) of the Companies Act 1981 (the “Act”), appraisal of the fair value of their shares in Jardine Strategic Holdings Limited (the “Company”). These proceedings arise out of the amalgamation of the Company with JMH Bermuda Limited (“JMH Bermuda”) on 14 April 2021 (the “Amalgamation”) pursuant to the provisions of the Act, on which date JMH and the Company continued as Jardine Strategic Limited (“Jardine Strategic”). The Company and Jardine Strategic are collectively referred to as the “Defendants”.

2. During a five-day hearing in December 2022 the Court heard three applications on behalf of the Plaintiffs made by Summons dated 10 August 2022. The first application seeks an order that the Defendants give discovery on the footing the documents over which they have possession, custody or power (“PCP”) include the documents held by the following subsidiary companies or their agents:

• i. Jardine Matheson Limited (“JML”);

• ii. Jardine Matheson Holdings Limited (“Jardine Matheson”);

• iii. Hongkong Land Holdings Limited (“Hongkong Land”);

• iv. DFI Retail Group Holdings Limited (formerly known as Dairy Farm International Holdings Limited) (“Dairy Farm”);

• v. Mandarin Oriental International Limited (“Mandarin Oriental”);

• vi. Jardine Cycle & Carriage Limited (“JC&C”);

• vii. PT Astra International Tbk (“Astra”);

• viii. Jardine Motors Group Holdings Limited (“Jardine Motors”);

• ix. Jardine Pacific Holdings Limited (“Jardine Pacific”); and

• x. Zhongsheng Group Holdings Limited (“Zhongsheng”),

(together, the “Principal Group Companies”).

3. The second application seeks an order that the Defendants produce documents over which they presently assert privilege which were created before 12 April 2021.

4. The third application seeks an order that “the Company shall, in accordance with paragraph 7.1 of the Order herein dated 12 November 2021, upload to the Data Room all documents within their possession, custody or power which are required by a Valuation Experts in these proceedings”. This application is concerned with the Defendants having given disclosure of what they say is “the essence of the request”.

5. The Court also heard two applications on behalf of the Defendants. First, by Summons dated 21 February 2022, the Defendants seek an order that the Plaintiffs provide discovery in accordance with paragraph 1 of Appendix 2 to the Directions Order dated 12 November 2021. It is said that the Plaintiffs have provided trade schedules produced for the purposes of these proceedings but have not given discovery of documents in their PCP during the relevant look-back period, as required by the Directions Order.

6. Second, by Summons dated 21 February 2022, amended with the leave of the Court granted on 28 September 2022, the Defendants seek an order that certain of the Plaintiffs provide in an unredacted form a number of documents disclosed pursuant to paragraphs 2 and 3 of Appendix 2 to the Directions Order. The Defendants contend that it is clear from the Plaintiffs' approach to redactions and from the redacted documents themselves that the redactions obscure relevant material, which should be provided.

The background

7. The background to these proceedings is set out in the Judgement of this Court dated 12 November 2021 and is repeated here for ease of convenience. As Mr Parr, the former-Group General Counsel of the Jardine Matheson group of companies (the “Group”), explains in his First Affidavit (dated 10 September 2021), Jardine Matheson is a company limited by shares and incorporated in Bermuda. It has a primary listing on the Main Market of the London Stock Exchange. It is also secondary listings in Singapore and Bermuda.

8. Prior to the Amalgamation, amongst other interests in the Group, Jardine Matheson held, indirectly, approximately 84.9% of the shares in the Company. Prior to the Amalgamation, the Company was also incorporated in Bermuda and had as its primary listing a standard listing on the Main Market of the London Stock Exchange. It also had secondary listings in Singapore and Bermuda.

9. The Group is comprised of a broad portfolio of businesses operating principally in China and Southeast Asia. Across the Group, over 400,000 employees work in a wide range of businesses in sectors including motor vehicles and related operations, property investment and development, food retailing, health and beauty, home furnishings, engineering and construction, transport services, restaurants, luxury hotels, financial services, heavy equipment, mining and agribusiness.

10. The Group's structure included a cross-holding structure between Jardine Matheson and the Company. The Company owned, directly and indirectly, 59.3% of the shares in Jardine Matheson. In addition, the Company held most of the Group's major listed interests, including, for example, approximately 50.4% of Hongkong Land, 77.6% of Dairy Farm, 79.5% of Mandarin Oriental and 75% of JC&C.

11. On 8 March 2021, the Company and Jardine Matheson announced plans to simplify the structure of the Group. In summary, the planned simplification would involve (1) the acquisition by Jardine Matheson, for cash, of the approximately 15% of the issued share capital of the Company that it did not already own directly or indirectly and (2) the subsequent cancellation by Jardine Matheson of the Company's almost 59% shareholding in it. The present claims by the Plaintiffs are concerned with the first of those two steps.

12. The acquisition was implemented by way of an amalgamation under the Act. Under Bermuda law and the Company's bye-laws, the Amalgamation required the approval of at least 75% of the votes cast by shareholders in the Company. Jardine Matheson had undertaken to the Company that it would vote and would procure that its wholly-owned subsidiaries would vote the 940,903,135 shares (representing 84.89% of the existing issued share capital of the Company) in favour of the resolution. The requisite approval was therefore, certain to be secured.

13. Under the terms of the Amalgamation, shareholders in the Company (other than Jardine Matheson and its wholly owned subsidiaries) were entitled to receive US$ 33.00 in cash for each ordinary share which they held in the Company (the Acquisition Price). Mr Parr states that the Acquisition Price valued the shares at US$ 5.5 billion, representing a premium of approximately: (i) 20.2% to the closing middle market price of US$ 27.45 per share on the Singapore Stock Exchange on 5 March 2021; (ii) 29% to the volume-weighted average closing middle market price of US$ 25.58 per share on the Singapore Stock Exchange over the one-month period ended 5 March 2021; and (iii) 40.3% to the volume-weighted average closing middle market price of US$ 23.53 per share on the Singapore Stock Exchange over the six-month period ended 5 March 2021.

14. As a number of the directors of the Company were also directors of Jardine Matheson, the Company's board delegated responsibility for considering the Amalgamation to a committee of directors who were not also directors of Jardine Matheson (the “Transaction Committee”). The members of the Transaction Committee were Lord Powell...