MINORITY shareholder Eric Jason Abrahams scored a major victory last month when the Privy Council ruled against Cable & Wireless Jamaica Limited (CWJ, trading as Flow) over a compulsory takeover dating back to November 2018.

The judicial committee of the Privy Council handed down its ruling on September 25, 2025, resulting in the company losing all three court appearances against Abrahams. This case stems from a November 2018 scheme of arrangement under which CWC Cala Holdings Limited wanted to compulsorily acquire the remaining shares held by minority shareholders at $1.45 per share. That would make CWJ a wholly owned subsidiary of Liberty Latin America Limited (LILA).

CWC Cala and Kelfenora Limited, subsidiaries of LILA, collectively own 92.27 per cent of Flow Jamaica. Abrahams and CASA Corporation Limited collectively own 0.38 per cent of CWJ and are amongst the top 10 shareholders.

Abrahams is an investment banker, business analyst, and a long-standing minority shareholder in CWJ.

Although Abrahams voted against the scheme of arrangement at the November 2018 meeting, 260 of the 344 shareholders present, in person or by proxy, voted in favour of the scheme, representing 98.48 per cent in value. That meant that the scheme of arrangement was approved as it passed the statutory majorities set out in the Jamaican Companies Act. However, among the minority shareholders who voted, 94.3 per cent voted against the scheme.

While the scheme was approved by shareholders, it still had to receive approval from the Supreme Court to be sanctioned. Justice David Batts refused to grant approval for the scheme of arrangement in a March 2019 decision as he concluded that the majority (intended purchasers) and minority shareholders (intended sellers) formed separate classes. This meant that the November 2018 meeting was not properly constituted, a result deemed fatal for the scheme to be sanctioned.

Justice Batts also ruled that even if the meeting had been properly constituted, the application to approve the scheme would have been refused. This is due to the move by Abrahams to seek permission from the court for a derivative action. That legal avenue meant that the pending application had to be heard and determined before the scheme was approved. This was on the basis of fairness. However, Justice Batts did allow CWJ to reconvene meetings for consideration of the scheme of arrangement in a time and manner that was consistent with his judgment.

In December 2022 the Court of Appeal (COA) ruled against CWJ and affirmed the orders by Justice Batts. CWJ then filed an application to the Privy Council in September 2023 against the COA’s decision.

“The rights attached to the minority and the majority shares are the same before the scheme takes effect, but the treatment of the minority and majority shareholders under the scheme is completely different. In those circumstances, it is clear that they constituted separate classes for the purposes of the scheme and that, without approval by the statutory majorities at a meeting of the minority shareholders and the separate consent of CWC Cala and Kelfenora, the court had no jurisdiction to sanction the scheme,” the ruling stated as it agreed with Justice Batts’ decision not to sanction the scheme.

While the Privy Council agreed with Justice Batts’ reasoning for not sanctioning the scheme, it did not agree with his reasoning on the reduction in capital of CWJ from the cancellation of the shares tendered in the scheme. The apex court determined that the share cancellation effects a reduction in stated capital, even if CWC Cala is issued shares subsequent to the event.

It also ruled that CWJ’s scheme of arrangement did not comply with Section 71 of the Jamaican Companies Act, an additional reason why Justice Batts did not have jurisdiction to sanction the scheme of arrangement. This is because Section 71 specifies only three ways a company may, by special resolution, reduce its share capital, with none applying to the reduction for which the scheme made provisions. Thus, the proposed reduction was not authorised by, or in accordance with Section 71 of the Jamaican Companies Act.

The Privy Council noted that the Jamaican Companies Act (2004) is largely based on the UK Companies Act (1948). The United Kingdom redrafted its statute in 2006 which allows for share capital to be reduced in any way.

“In the present case, several requirements of Section 71 have not been complied with. There has been no special resolution to reduce capital in terms of Section 71(1), no statutory declaration in terms of Section 71(3), and no notices in accordance with Section 71(5),” the ruling added.

The Privy Council was composed of Lord Hodge, Lord Lloyd-Jones, Lord Burrows, Lord Richards and Lord Doherty. Sandra Minott-Phillips KC and Matthew Royal of Myers, Fletcher and Gordon (London) represented CWJ, while Conrad George and André Sheckleford of Hart Muirhead Fatta represented Abrahams.

Derivative action trial set to begin

The trial for the derivative action brought by Abrahams is set to be held between November 17 and December 5. This was mentioned in Flow Jamaica’s 2024 annual report which detailed the shareholder litigation by Abrahams.

A derivative action is a legal mechanism that enables minority shareholders to bring a legal action in the name and on behalf of the company. This provision in company law gives room for minority shareholders to seek legal redress and have the courts restore or rectify an action that might be detrimental to those shareholders.

Abrahams was granted permission in July 2020 by the Supreme Court to file a derivative claim against past and former directors of Flow Jamaica and Cable and Wireless Communications Limited (C&WC). According to Flow Jamaica’s annual report, Abrahams initiated the derivative action in January 2021 against 18 defendants including the company, three overseas affiliate companies, and 14 past and present directors who reside in Jamaica. Abrahams was also granted a Wallesteiner Order in July 2024 to indemnify his legal costs in the derivative claim. Flow Jamaica filed its defence in February 2021.

Barbados shareholders restart legal proceedings

Based on the Privy Council’s ruling for Abrahams and Flow Jamaica, minority shareholders in Barbados have filed new legal submissions surrounding the September 2017 merger of Cable & Wireless (Barbados) Limited (CWB).

Barbados Today noted in an October 7 article that over 300 minority shareholders in CWB have renewed their fight in the Supreme Court of Barbados. Kenneth Ricky Went, Omstand Investment Inc, and Phillip Osbourne are the shareholders spearheading this fight. There are nine defendants named in this new case with Professor Sir Hilary Beckles, vice chancellor of The University of the West Indies, listed as one of the defendants.

In July 2017, CWB sought approval by its shareholders for the approval of an amalgamation between CWB and CWB Ltd and the amalgamation agreement. This amalgamation or merger didn’t result in any CWB shareholders receiving new shares in the amalgamated company, but being paid BDS$2.86 per common share held.

The special meeting was held a month later at which 98.77 per cent of the 127,773,007 shares cast were in favour of the resolution. This translated to 133 shareholders voting in favour and 77 shareholders voting against the resolution. The amalgamation was completed on September 1, 2017, with minority shareholders paid BDS$61.7 million at that point in time.

Went, Omstand and Osborne filed a claim in the Barbadian Supreme Court in November 2017 seeking a number of reliefs under the Barbadian Companies Act. However, Justice Alrick Scott denied the application for interim relief in 2018 after citing several reasons, including the potential prejudice against CWB if the injunctions were granted. CWB was delisted from the Barbados Stock Exchange in October 2020.