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Directors' duties and share purchase agreements

Debbie King discusses a trio of recent cases relating to the complex area of directors’ duties and the importance of carefully wording any indemnity clauses in an SPA

5 June 2017

In First Subsea Ltd v Balltec Ltd and Others [2017] EWCA Civ 186, the Court of Appeal recently considered whether the terms of section 21 of the Limitation Act 1980 apply to claims involving a director’s breach of fiduciary duty involving fraud.

Section 21 provides that a claim for breach of trust must be issued within a six-year period following the breach, save for actions which involve fraud or embezzlement of company property.

In this case, a former director (D) of First Subsea Ltd (C) formed a rival company in order to compete with C’s business. C subsequently issued a successful claim against D for breach of fiduciary duty, fraud, and conspiracy to injure by unlawful means.

D appealed to the Court of Appeal on the grounds that the breaches took place in 2004 and the initial claim ...

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