COURT RULES THAT A DIRECTOR MAY BE SUED UNDER THE PROVISIONS OF THE CIVIL CODE FOR BREACH OF DUTIES AS A DIRECTOR.

COURT RULES THAT A DIRECTOR MAY BE SUED UNDER THE PROVISIONS OF THE CIVIL CODE FOR BREACH OF DUTIES AS A DIRECTOR. THE ACTION DOES NOT NEED TO BE LODGED UNDER THE COMPANIES ACT.

"It is common ground that the plaintiff is invoking breaches of directors’ duties by the defendants under the Companies Act. But
the plaintiff is also suing the defendants for faute, negligence and imprudence under articles 1382 and 1383 of the Code Civil Mauricien for these alleged breaches. I agree with learned Counsel for the plaintiff that there is nothing in law preventing the plaintiff from doing so.

As a matter of fact, nowhere in the Companies Act does it provide for an exclusive jurisdiction or exclusive cause of action for any breach of the Act. In this context, the specific remedies under the Companies Act invoked by the defendants to buttress their contention that the plaintiff’s remedy lies solely under the Act are of no help to them. In fact, section 170 provides for a derivative action by a shareholder or a director while sections 174 to 179 provide for personal actions by shareholders against directors or a company. The present action is clearly not one of those types of action.

I also do not agree with the defendants’ contention that the fact that they are being sued in tort under the Code Civil Mauricien will deprive them of the defences available to them under the Companies Act. I am of the opinion that since they are being sued for breaches of directors’ duties under the Companies Act, it stands to reason that they are entitled to avail themselves of any defence available to them under that Act. It would be preposterous to suggest otherwise. Section 150 which was relied
upon by the defendants does not in fact support their case. On the contrary, it provides that “in any proceedings before any Court for negligence, default or breach of duty” against a director (my emphasis), the Court may, in specified circumstances,
relieve that director wholly or partly from liability. I am of the view that in the light of the clear wording of section 150, the defendants may avail themselves of the defence provided therein if they so wish."

HAREL FRERES LIMITED v RAFFRAY G & ORS 2016 SCJ 38


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