Offshore law firm Carey Olsen has successfully applied to have a winding-up petition against eHi Car Services Limited, China's leading car services provider, struck out in its entirety on a preliminary basis in the Grand Court of the Cayman Islands.
eHi successfully applied to strike out a winding-up petition filed by a minority shareholder, Ctrip, in response to a privatisation offer which had been approved by the board of eHi.
Ctrip had filed the petition with the aim of maintaining its investment in eHi in the face of a buy-out offer which had been preferred by the directors of eHi over an alternative offer supported by Ctrip. The Court found that Ctrip, "...far from seeking to advance a class remedy on behalf of other shareholders....was seeking to advance its own individual commercial interests".
The Carey Olsen team comprised of partner Michael Makridakis and associate Dhan Vekaria in Hong Kong and partner Jan Golaszewski and associate Denis Olarou in the Cayman Islands. Stephen Atherton QC of 20 Essex Street Chambers also appeared at the three-day hearing.
The Court found the petition, which sought alternative relief with the ultimate aim of forcing eHi to reconsider Ctrip's offer, to be "wholly unmeritorious" and the complaints of misconduct against eHi and its directors were "unsustainable [as they were] factually incapable of proof and unmeritorious".
Significantly, the Court found that in the context of a corporate privatisation, there were more suitable remedies for minority shareholders than winding-up proceedings.
Michael Makridakis, head of Carey Olsen's litigation and insolvency team in Hong Kong, said: "This is an important decision of the Grand Court which stands as authority for the principle that a minority shareholder may not pursue a winding-up petition in order to delay or prevent a Board-approved privatisation offer. The decision is a decisive victory for eHi in the face of an unmeritorious application by Ctrip.
"The decision has provided a swift and positive outcome for our client and its shareholders, against a minority shareholder who improperly used a winding-up application in an attempt to further its own commercial interests.
"We were delighted to be selected as offshore legal counsel by eHi. This instruction adds to our expanding involvement in the buoyant privatisation sector in the PRC."
Acting for eHi Car Services Limited is a high-profile instruction for leading offshore law firm Carey Olsen. Carey Olsen has one of the largest dispute resolution and insolvency practices in the offshore legal field, led by 18 partners across nine international offices.
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