“Lights. Camera. Action!” – Re Motion Picture Capital and standing for minority shareholders to bring unfair prejudice petitions
Generally reflecting the reasoning of Mostyn J in R (ZAI Corporate Finance Ltd) v AIM Disciplinary Committee of the London Stock Exchange PLC (London Stock Exchange, interested party)  EWHC 778 (Admin), the Court of Appeal dismissed an appeal and refused a nominated adviser’s application to quash the decision of the Alternative Investment Market (AIM) Disciplinary Committee that a disciplinary hearing should be held in private.
Disciplinary proceedings were brought by the London Stock Exchange before the AIM Disciplinary Committee, against ZAI Corporate Finance Ltd (ZAI). ZAI was known as a ‘nominated adviser’ or ‘nomad’. A dispute arose surrounding the issue of whether the disciplinary hearing should be held in public, as ZAI contended, or in private, as AIM directed.
Rule C22.1 of the AIM Disciplinary Procedures and Appeals Handbook 2014 states:
‘The AIM Disciplinary Committee will usually conduct hearings in private, although an AIM company or nominated adviser which is subject to proceedings has the right to ask for such hearing to be conducted in public. An AIM company or nominated adviser requiring such hearing to be conducted in public shall notify the Chairman at least five business days prior to commencement of the hearing".
ZAI did apply, albeit unsuccessfully, for permission to bring judicial review proceedings regarding the issue of holding the hearing in public.
Permission was granted to appeal that decision to the Court of Appeal Civil Division. ZAI sought to interpret the wording of C22.1 such that the word ‘requiring’ in the rule contained an obligation on AIM to conduct the hearing in public once asked to do so.
This is an interesting case, especially for those who work in the disciplinary/regulatory sector. Ordinarily, the presumption is that hearings will be in public, with the Respondent arguing that it should be held in private. Reasons such as damage to reputation and a breach of human rights, principally the right to a private family life, are often cited. As such, this case is the reverse of the ordinary state of affairs.
The Court decided that whilst the primary presumption is that hearings will be conducted in public, unless there is an overriding reason as to why the hearing should be conducted in private, rules which are drafted with a presumption that a hearing will be conducted in private do not automatically offend the ‘open justice’ principle.
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