Jardine Strategic’s appeal to strike out claims from shareholders seeking arbitrage profit dismissed

THERE is “nothing wrongful, abusive or in bad faith” in arbitrage, ruled the Bermuda Court of Appeal as the three judges dismissed Jardine Strategic’s appeal to thwart the claims of arbitrageurs that bought the formerly Singapore-listed conglomerate’s shares after its buyout was announced.

The president of the Court of Appeal, Christopher Clarke, noted in the Mar 24 judgement that arbitrage in the Jardine Strategic case means that people may be prepared or encouraged to purchase shares after the US$33 price has been announced, in the hope that the fair value which is later determined may be greater than that.

“Arbitrage is a legitimate part of the marketplace and contributes to liquidity; the preparedness of others to purchase may be advantageous to existing shareholders in a variety of differing circumstances…” Justice Clarke added.