The Proper Purpose Rule

[2016] Lloyd's Maritime and Commercial Law Quarterly 176-185

10 Pages Posted: 27 Mar 2017  

Hans Tjio

National University of Singapore (NUS) - Faculty of Law

Date Written: May 26, 2016

Abstract

The proper purpose rule ‘is the least discussed and least well understood of the fiduciary obligations affecting a director’. We were recently reminded by the UK Supreme Court in Eclairs Group Ltd. v. JKX Oil and Gas plc. that the rule imposes different requirements on directors when contrasted with their duty to act bona fide in the interest of the company. There may, however, be a but-for causation requirement which protects directors where they would have come to the same conclusion had they only acted properly.

Keywords: Eclairs Group Ltd. v. JKX Oil and Gas plc., directors’ duties, proper purpose rule, mixed purposes, causation, disclosure of interest in shares

Suggested Citation

Tjio, Hans, The Proper Purpose Rule (May 26, 2016). [2016] Lloyd's Maritime and Commercial Law Quarterly 176-185. Available at SSRN: https://ssrn.com/abstract=2941195

Hans Tjio (Contact Author)

National University of Singapore (NUS) - Faculty of Law ( email )

469G Bukit Timah Road
Eu Tong Sen Building
Singapore, 259776
Singapore

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