The Supreme Court will decide in October, says Rakesh Bassi
In Enviroco Ltd v Farstad Supply A/S [2009] EWCA Civ 1399, the Court of Appeal held that where a holding company does not hold a majority of the voting rights in a subsidiary and pledges its shares to a bank which are registered in the name of the bank’s nominee, as security for the pledge, the subsidiary is no longer a “subsidiary” under ss 736 and 736A of the Companies Act 1985 (CA 1985). As s 1159 of the Companies Act 2006 (CA 2006) essentially reproduces CA 1985, s 736 this decision is still of relevance.
Enviroco Ltd (E) and Asco Ltd (A) were subsidiaries of Asco Plc (A PLC). A PLC did not hold a majority of the voting rights in E. E was engaged to clean the tanks of a ship. The vessel was owned by Farstad (F), but was on charter to A. In the charterparty, F provided indemnities in favour of A and its
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