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Contractarianism and Wrongs in Minority Oppression

Year of Publication: 2025
Month of Publication: 3
Author(s): Tan Cheng-Han, Danielle Toh En-Ting and Lee Jie-Yu
Research Area(s): Corporate Law
Journal Name: Singapore Journal of Legal Studies
Abstract:

The two principal remedies in corporate law against abusive conduct toward minorities are the derivative action and the oppression action. The former allows a proper complainant to seek relief on behalf of the company while the latter provides non-controlling shareholders with various personal remedies where they establish oppressive conduct. The courts have recently proposed a distinction between an “essentially corporate wrong” (which members may purportedly only rectify under the derivative action) and a “personal wrong” (which is purportedly the only valid basis for the oppression action). It is suggested that focusing on the nature of the wrong is untenable given commercial realities that a wrong to a company can also readily prejudice members’ rights. Instead, the emphasis should be on the agreement or understanding of the parties and the specific reliefs being sought.

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