CA-2024-001924 - [2025] EWCA Civ 1206

The Judge considered the “starting point” to be that the SHA’s second recital (“Recital B”) “means what it says – that at the time of execution Mr Kulkarni was the holder of 1,652 A shares that had been issued and were fully paid”: see paragraph 408 of the Judgment. However, the Judge did not consider that to be the end of the analysis since “Mr Kulkarni must also show that the parties intended to be bound on the basis that Recital B was accurate, even though all parties knew that it was not”: paragraph 409. In the Judge’s view, Mr Kulkarni faced “insurmountable obstacles” in this respect: paragraph 409. In this connection, the Judge said, among other things, that “it is simply not credible that the initial shareholders reached an agreement under which they were content that saying they had contributed capital, when they had not, was sufficient” (paragraph 409.1); that “[i]t would be … a remarkable conclusion to say that [the B Shareholders who were to become parties to the SHA through deeds of adherence] contracted on the basis that they had to put in capital (which they were required to do under the articles before they could become shareholders) but the A shareholders did not” (paragraph 409.3); and that it was “highly unlikely that [the Company] contracted on the basis that Mr Kulkarni had to pay under the allotment contract [which was made the same day] but not under the SHA” (paragraph 409.4).