In Compound Photonics Group Limited [2022] EWCA Civ 1371, the Court of Appeal considered the meaning and effect of an express good faith clause in a shareholders’ agreement, the argument arising in the context of a section 994 petition. In doing so, it gave valuable guidance on how to approach such clauses in commercial contracts as a whole. This article aims to explore some of that guidance.
The (much simplified) relevant facts
Compound Photonics Group Limited was the vehicle for the intended development and commercialisation of certain academic research by a Dr Sachs. As perhaps befitted the academic research behind the underlying product, Dr Sachs was the CEO with day-to-day control of both companies. As one of the investors put it, he was “the jockey they were backing.” Mr Faulkner was an independent financial adviser and a “Founder Director” and chairman.
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Please click on this link to read the full article by Ian Clarke KC.