Maso Capital Investments Ltd v Trina Solar Ltd [2025] UKPC 48
In a unanimous judgment with implications for all share valuation disputes, the Privy Council has finally concluded a lengthy dispute over the ‘fair value’ of shares which stood to be determined by the court under the Companies Act (2016 revision) of the Cayman Islands.
The Privy Council overturned the Cayman Islands Court of Appeal’s decision, which had itself interfered with the judgment of the trial judge (Segal J), thereby restoring Segal J’s assessment of fair value. The decision is significant at two levels: first, as regards the proper approach to share valuation, which is an exercise required in many contexts and, second, as regards the principles to be applied by an appellate court to evaluative assessments undertaken by a lower court, and when (and how) an appellate court may interfere with such first-instance assessments.
Background
The case arose out of the 2017 merger relating to a Chinese solar power business. The respondents were two dissenting shareholders, forming part of a tiny minority who did not support the merger, and who held between them approximately 1.75% of the shares in Trina Solar Ltd (the “Dissenters”). Under s. 238 of the Companies Act (2016 revision) of the Cayman Islands, the Dissenters were entitled to be paid the ‘fair value’ of their shares, which was to be determined by the Grand Court in the absence of agreement.
A trial took place before Segal J on the question of fair value, involving detailed expert evidence and the cross-examination of those expert witnesses. In his judgment, Segal J considered three valuation methodologies, being based on the merger price, the market price and a discounted cash-flow (“DCF”) approach. Segal J (i) determined the value per share on each of the methodologies and (ii) applied a weighting to each respective methodology, based on his assessment of their relative reliability, which he determined to be 45:30:25 (%), respectively.
The Court of Appeal deemed Segal J wrong to have regard to the merger price at all by reason of factors, identified by Segal J, which undermined its reliability as a valuation methodology in this case. In consequence, the Court of Appeal directed that the 45% weighting given to the merger price be reallocated to the (much higher) DCF valuation.
The Privy Council’s Judgment
In allowing the first (and principal) ground of appeal, the Privy Council held that the Court of Appeal was wrong to interfere and, moreover, wrong to criticise the approach of Segal J. When it comes to share valuation:
“Each methodology must be assessed individually to identify strengths and weaknesses which may affect its reliability as a guide to fair value. Reliability is not in this context a binary concept in which the court must conclude that the measure in question is or is not reliable; rather it is a qualitative concept in which the court may conclude that it is more or less reliable on a sliding scale.” (At [15]).
Accordingly, as “the exercise is not one simply of assessing the reliability of each methodology individually, but one of assessing comparative reliability between all of them” (at [16]), there was no basis to criticise Segal J’s approach, which was to reduce the relative weight placed on each methodology by reason of the extent to which it was deemed to be less reliable than other methodologies.
As regards the approach to be taken by an appellate court, the Privy Council emphasised that the task before Segal J was “highly case specific and highly fact dependent”, requiring not only findings of primary fact but also being “peculiarly dependent on nuanced evaluative assessments” (at [17]). Applying (and restating) the settled principles which govern how an appellate court is to approach such assessments, the Privy Council concluded that “the Court of Appeal lost sight of the advantages enjoyed by the Judge who was immersed in the sea of evidence”, finding that the Court of Appeal could not have surmounted the “high threshold” of concluding permissibly that Segal J was “plainly wrong” (at [49]).
The Privy Council allowed two subsidiary grounds of appeal too, on the basis of the same reasoning, meaning that Trina Solar Ltd succeeded on every ground that was decided.
Conclusions
The decision will be of importance to other petitions under s. 238 of the Cayman Islands Companies Act and similar share appraisal issues in other jurisdictions. Beyond that, the issue of share valuation is one that the English courts and the courts of various offshore jurisdictions frequently grapple with across a number of contexts. The judgment in Maso Capital v Trina Solar emphasises the broad and context-dependent evaluative exercise that must be undertaken, and the proper deference that must be given to such evaluative assessments by appellate courts.
Counsel
Graham Chapman KC appeared on behalf of the successful appellant, Trina Solar Ltd, (in the Privy Council only) alongside Nick Hoffman and Luke Fraser of Harney Westwood & Riegels (Cayman) LLP as part of a larger team including Vicky Lord, Shanghai Managing Partner.
Shail Patel KC advised in relation to the grounds of appeal and the drafting of the application to appeal to the Privy Council.”
© Usman Roohani, 4 New Square Chambers, October 2025
This article is not intended as a substitute for legal advice. Advice about a given set of facts should always be taken.
