Supreme Court Confirms UK Investors’ Shareholder Rights

Valdemars Law Firm successfully represented 11 UK investors in a complex shareholder dispute concerning investments made in a Latvian golf development project. After four years of litigation, the Supreme Court confirmed the investors’ rights to the shares despite their absence from the company’s shareholder register.

Background

In 2008, 11 UK investors invested in the development of one of the largest golf and leisure projects in the Baltic region. The investors received share certificates confirming their investments, but their ownership was never formally recorded in the company’s shareholder register.

Following the death of the company’s original owner, the successor refused to recognise the investors’ rights to the shares. It was argued that too much time had passed and that the investors had lost their rights because they had not submitted a separate claim during the inheritance proceedings.

Challenge

The dispute raised several complex questions concerning the legal nature of shares, the evidential value of historical share certificates and the effect of an incomplete shareholder register.

The case also required the courts to assess whether shares originally expressed in Latvian lats could still be allocated proportionally and whether the investors were required to pursue a separate inheritance claim before their shareholder status could be recognised.

Our Role

We developed a litigation strategy based on the original investment documentation, share certificates and the legal nature of shares as intangible property.

After the claim was rejected by the first-instance court, we successfully appealed the decision. We continued representing the investors before the Supreme Court, addressing the legal issues concerning ownership, registration and inheritance.

Outcome

The Supreme Court upheld the investors’ position and confirmed that share certificates may establish rights to shares even where the investors were not entered in the shareholder register; historical shares with a nominal value expressed in Latvian lats may be allocated proportionally; and a separate inheritance claim was not required for recognition of shareholder status.

The judgment restored the investors’ rights approximately 18 years after the original transactions and concluded four years of litigation.