Re Northern Engineering Industries plc [1994] 2 BCLC 704

Court: Court of Appeal

Facts: The company’s Articles of Association explicitly stated that a reduction of capital amounts to a variation of class rights, leading to a dispute about whether a separate class meeting was necessary for the preference shareholders.

Issue: When the company's constitution states that a reduction of capital constitutes a variation of class rights, does this necessitate a separate class meeting?

Held: The preference shareholders were entitled to a separate class meeting.

Key Judicial Statement: The court upheld the constitution's explicit provision, affirming that the repurchase of shares according to the company's Articles required a separate class meeting.

💡 Leveluplaw: Where the company’s constitution defines a reduction of capital as a variation of class rights, a separate class meeting is required.