The Privy Council’s recent decision in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd and others [2025] UKPC 34 marks a decisive end to the ‘Shareholder Rule’ following on from the English High Court’s earlier rejection of the doctrine in Aabar Holdings v Glencore. While Aabar was the first to challenge the rule’s application in English law, Jardine goes further, removing any residual uncertainty and confirming that privilege prevails in shareholder disputes. What’s changed and why does it matter for UK boards and investors?

Published 16 December 2025

Jardine Strategic Ltd: a shareholder challenge to a corporate restructure

Jardine Strategic Holdings Limited (“JSHL”), part of the Jardine Matheson group, announced a restructuring in 2021 that would see shareholders’ shares cancelled in exchange for payment of fair value. The $33 per share offer was approved at a special general meeting, but not all shareholders were convinced. Minority investors challenged the fairness of the price and asked the Bermuda courts to determine the true value of their shares in accordance with section 106(1) of the Bermuda Companies Act 1981.

As part of their claim, the shareholders sought disclosure of legal advice obtained by JSHL about the valuation. The company refused, relying on legal advice privilege, bringing the long-standing “Shareholder Rule” into sharp focus once again.

The Shareholder Rule: a historical doctrine

For over a century, the Shareholder Rule meant companies could not use legal advice privilege to shield documents from shareholders in disputes. The logic was simple: shareholders, as owners, had paid for the advice and should be entitled to see it, and had a proprietary interest in the company and its assets. But as company law evolved, recognising companies as separate legal entities, the rule became increasingly out of step with modern practice.

The Privy Council’s verdict: privilege prevails

The Privy Council has now decisively rejected the Shareholder Rule, confirming it no longer forms part of Bermuda law and “ought not to continue to be recognised in England and Wales”. The Board found the rule inconsistent with the principle of separate legal personality and dismissed arguments that shareholders’ interests are always aligned with those of the company – especially in litigation.

While a narrowing of the Rule was considered, as advanced by the Court of Appeal judge, the Privy Council rejected this approach due to concerns over legal certainty. The Board noted that any attempt to narrow the Rule would create uncertainty for directors and advisers. Without clear boundaries, directors would not know whether their legal advice would remain privileged, undermining the very purpose of legal advice privilege and discouraging open communication with legal advisers.

Why is the decision in Jardine more important?

Unlike Aabar, which was a High Court decision and left scope for further judicial consideration, Jardine Strategic is a Privy Council ruling with binding effect in England and Wales which clarifies the application of the rule. Rather than simply rejecting the rule in a single context, it abolishes it entirely, and providing much-needed clarity for boards, advisers, and shareholders alike.

Why does this matter?

The Privy Council’s ruling is not just a doctrinal clarification - it has immediate, practical consequences for all parties involved in corporate disputes:

• boards and directors can now engage in frank discussions with legal advisers, knowing that privilege will be robustly protected. This supports better risk management and more effective decision-making, especially in contentious or high-value transactions
• shareholders must adapt their litigation strategies, as they can no longer rely on the Shareholder Rule to access privileged advice. The decision is an additional hurdle for shareholders, who are already often at an informational disadvantage when in disputes with boards who have greater access to company documents. Access to privileged company documents is now limited and there are no special rights conferred solely because of investor status
• companies may wish to review their constitutional documents to clarify when, if ever, privileged advice may be shared with shareholders, ensuring transparency and managing expectations

This decision removes any lingering doubt left after Aabar and sets a clear, modern standard for privilege in shareholder disputes, making the legal landscape more predictable for all parties.

The takeaway

The Privy Council’s decision in Jardine Strategic Ltd v Oasis Investments II is a win for clarity. Companies and their advisers can rely on privilege with greater confidence, while shareholders must pursue their claims within the established boundaries of litigation privilege.