Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1541334
38 www.lexpert.ca Top 10 Business Decisions CHENG V. GLENCORE PLC, 2025 YKCA 8 • Libei Cheng > (No law firm specified) > P.J. Bates, S. Nematollahi • Glencore plc (in its own capacity and as successor by merger to Katanga Mining Limited) > McCarthy Tétrault LLP > Michael Feder, Shane D'Souza, Patrick Williams, Adam Taylor, Rene Sorell, and Lindsay Frame • Hugh Stoyell and Robert Wardell > (No law firm specified) > J.N. Blinick CLIENTS > FIRMS > LAWYERS THE YUKON COURT OF APPEAL delivered a landmark decision in Cheng v. Glencore plc, marking the first Canadian appellate ruling on the territorial scope of the corporate oppression remedy. The court dismissed an appeal stemming from a Supreme Court of Yukon decision dated June 7, 2024, which had struck down an oppression claim for lack of subject- matter jurisdiction. Libei Cheng, representing minority shareholders of Katanga Mining Limited, alleged oppression arising from a November 2019 Rights Offering Transaction that allowed Glencore International AG to acquire Katanga shares at a substantially lower price than it would otherwise have had to pay. The claim also named Glencore plc and two former Katanga directors, Hugh Stoyell and Robert Wardell. However, after the alleged oppressive conduct occurred, Katanga amalgamated with a numbered Yukon corporation in June 2020 to form New Katanga, which subsequently discontinued under the Yukon Business Corporations Act in December 2020 and continued in the Isle of Man. The Court of Appeal unanimously upheld the lower court's determination that Yukon courts lack subject-matter jurisdiction over oppression claims once a corporation discontinues under the Act. Writing for the panel, Justice Fisher emphasized that the definition of "corporation" under the Act explicitly excludes discontinued entities. The court rejected arguments that oppression remedies crystallize at the time of conduct, finding that jurisdiction depends on a corpo- ration's current status under the Act. According to Michael Feder, K.C. of McCarthy Tétrault LLP, "The Yukon Court of Appeal's decision – the first Canadian appellate ruling on the territorial scope of the corporate oppression remedy – sets a key precedent for defining jurisdic- tional limits in cross-border shareholder and corporate governance disputes." The ruling establishes that while corpora- tions cannot avoid liability through discon- tinuance, oppression claims must be pursued in the new jurisdiction rather than the orig- inal one. The court found that adequate safe- guards exist through statutory requirements mandating that continuation jurisdictions provide substantially equivalent protections, including that existing causes of action remain unaffected. This precedent clarifies jurisdictional boundaries for the oppression remedy while confirming that discontinued corporations remain liable under their new jurisdiction's laws.