Zinnwald Lithium PLC, Re

For sanction of a scheme under Part 26 of the Companies Act 2006, the court must be satisfied that the statutory and jurisdictional requirements have been met, including proper class composition, approval and disclosure. A scheme must involve a degree of give and take. The court’s discretion is guided by fair representation, whether an honest member acting in their own interests might reasonably approve the scheme, the absence of any blot, and any other circumstances affecting sanction.

The company sought sanction under Part 26 of the Companies Act 2006 for a transfer scheme enabling AMG Lithium BV and/or its nominees to acquire the company, with cash and shares in AMG Critical Material NV as consideration. AMG’s existing shareholding was excluded. Following permission to convene a single meeting, the scheme shareholders approved it by the requisite majorities. The central issue was whether the jurisdictional requirements were met and whether the court should exercise its discretion to sanction the scheme.

The application was granted and the Scheme was sanctioned. AMG Lithium BV and AMG Critical Material NV undertook to be bound by it.

1. Jurisdiction. The court was satisfied that the statutory requirements and convening directions had been complied with. The Scheme involved a compromise or arrangement with a degree of give and take. The explanatory statement adequately disclosed material interests, and a single meeting was appropriate because all scheme shareholders were offered the same deal. As a transfer scheme, it caused no adverse impact on creditors.
2. Voting. Applying the approach in Re Equitable Life Assurance Society No 1 [2002] BCC 319, shareholders who voted both for and against different parts of their holdings were treated as members both in favour and against for the majority-in-number test. The Scheme was approved by 74.19 per cent in number and 97.93 per cent in value.
3. Discretion. Applying the four-part analysis adopted in Re TDG Plc [2009] 1 BCLC 445, the court found statutory compliance, fair representation, and that an honest member acting in their own interests might reasonably approve the Scheme. There was no blot. The commercial rationale, premium, rollover shareholding and unanimous recommendation of the independent directors supported sanction.
4. Other matters. There were no objections, no additional consideration for selected shareholders, and satisfactory evidence of funding. A relaxation of voting restrictions did not prevent sanction.
5. Order. The court sanctioned the Scheme in the form of the draft order.

This was a first-instance sanction application. The judgment records that ICC Judge Barber gave permission on 10 June 2026 to convene the shareholder meeting, which took place on 13 July 2026. The present court then sanctioned the Scheme.