Oceanrose Investments Ltd, Re:

Under the Companies (Cross-Border Mergers) Regulations 2007, approval of merger terms by members must ordinarily occur at a meeting summoned under Regulation 11. A sole member’s written consent cannot replace that meeting unless an express exception applies. The court’s power to summon a meeting under Regulation 11 is not a general power to dispense with the meeting requirement. Statutory written-resolution provisions and the Duomatic principle cannot override the mandatory wording of Regulation 13. By contrast, a creditors’ meeting is required only where the court orders one under Regulation 11.

Oceanrose Investments Limited, an English private company with one member and no employees, proposed a cross-border merger with an Italian company that was not its parent. Its sole member had approved the merger terms by written resolution. The company applied at the first stage of the statutory process for directions concerning the summoning of meetings and argued that no members’ meeting was necessary.

The central issue was whether the member’s formal written consent could satisfy the requirement in Regulation 13 of the Companies (Cross-Border Mergers) Regulations 2007 without a meeting summoned under Regulation 11. A further issue concerned whether a creditors’ meeting was required.

1. Members’ meeting required. Regulation 13(1) required the draft merger terms to be approved by the requisite majority at a meeting summoned under Regulation 11. The wording applied even where the company had only one member. The only relevant exceptions were those expressly provided by Regulations 13(3) and 13(4), neither of which applied because the proposed merger was not an absorption by the parent company of a wholly-owned subsidiary.
2. The authorities showed that, in an appropriate case, a meeting may be attended by one person. They did not establish a power to dispense with a meeting altogether. The scheme-of-arrangement authorities, including Re RMCA Reinsurance Ltd [1994] BCC 378, required at least one meeting before the court could sanction a scheme.
3. The discretion in Regulation 11 concerned whether the merger process should be commenced by ordering a meeting. It was not a dispensing power. If such a power existed, it would have been stated expressly, as were the exceptions in Regulations 13(3) and 13(4).
4. The written-resolution provisions in sections 288 and 300 of the Companies Act 2006 did not apply because the Regulations were made after section 288 came into force. The Duomatic principle, recognised in Re Duomatic Ltd [1969] 2 Ch 365 and related authorities, yielded to the mandatory statutory language. The company’s articles likewise could not override the Regulations.
5. A creditors’ meeting stood on a different footing. Regulation 14 made approval necessary only if the court summoned such a meeting under Regulation 11. The court saw no reason to summon one where the only creditor, or all creditors, consented. The application to proceed without a members’ meeting was therefore refused.

First-instance decision. No appellate history was stated in the judgment.