Guide

Fair value discovery: Court of Appeal says Grand Court was justified in ordering forensic IT audit

In "fair value proceedings", there is a significant information imbalance between the dissenting shareholders, who are essentially outsiders, and the company which holds all of the relevant information as to the fair value of its shares. The discovery process seeks to correct this information imbalance by requiring disclosure of relevant documents by the company.

In a recent decision, the Court of Appeal refused an application by a company for leave to appeal from an order of the Grand Court designed to ensure that the Company fully complied with its discovery obligations. The Court of Appeal has confirmed that the Grand Court has a broad jurisdiction to ensure compliance including, in exceptional cases, by ordering an audit of the company's IT systems and other electronic devices.