Mohamed Rezwan Khan v Nazreen Resources [Pvt] Ltd & Ors

The applicant held a 30% shareholding in the first respondent company, while the second and third respondents held 60% and 10% respectively. Their relationship was governed by a Shareholders' Agreement. At an extraordinary general meeting (EGM) held on 7 October 2021, resolutions were passed requiring all shareholders to pay up in full for their shareholding within 7 days, failing which defaulting members would forfeit their shares. The resolutions also required formalization of directorship registration and share certificate issuance. The applicant attended the meeting virtually and voted against the resolutions but was outvoted by the majority shareholders. The applicant claimed he had paid for his shares "in kind" by providing technical expertise and strategies in setting up the company. He sought an urgent interdict to restrain enforcement of the resolutions, claiming they were oppressive and unfairly prejudicial to him under section 223 of the Companies and Other Business Act.

• Whether the court should intervene in the internal affairs of a company where a shareholder is dissatisfied with resolutions passed at a properly constituted meeting
• Whether the resolutions passed at the EGM were oppressive or unfairly prejudicial to the minority shareholder within the meaning of section 223 of the Companies and Other Business Act
• Whether the applicant had established a cause of action for interim relief
• Whether the applicant had paid for his shares 'in kind' as claimed under the Shareholders' Agreement
• Whether the draft order seeking final relief as interim relief was competent

The urgent chamber application was dismissed with costs.

Courts will not interfere in the domestic affairs of a company merely because a shareholder is dissatisfied with resolutions passed at a properly constituted meeting where due process was followed. For a court to intervene under statutory provisions against oppressive or unfairly prejudicial conduct (such as section 223 of the Companies and Other Business Act), there must be evidence of actual oppression, unfair prejudice, illegality, unconstitutionality, or fraud—not mere dissatisfaction with being democratically outvoted. A provisional/interim interdict must be pending determination of a matter elsewhere; it cannot seek final relief in the guise of interim relief where no substantive proceedings have been initiated.

The court made several observations: (1) It analogized a properly constituted board of directors to a "parliament" that passes laws through resolutions; (2) It described a provisional interdict as "simply a pain killer pending surgery"—temporary relief for preservation of rights pending proper determination of a dispute; (3) The court noted that subscribing for shares is not the same as paying for them; (4) The court observed that the proper running of companies and administration of justice would be severely hampered if courts intervened every time a shareholder was unhappy with a resolution; (5) The court mentioned (without needing to decide on) allegations by the respondents of the applicant's misappropriation of company funds and conduct "almost bordering on fraud." The judge also expressed some exasperation at the elementary defect in the draft order, noting that since Kuvarega v Registrar-General & Anor 1989 (1) ZLR 188 (H), courts have consistently made this point about not seeking final orders as interim relief, yet "it keeps coming back."

This case reinforces the principle of judicial non-interference in the internal affairs of companies in Zimbabwean law (which shares common law principles with South African law). It clarifies that courts will not intervene merely because a minority shareholder is dissatisfied with being outvoted at a properly constituted meeting. The judgment emphasizes that oppressive or unfairly prejudicial conduct under company law statutes refers to a consistent pattern of abusive behavior, not legitimate business decisions made through proper democratic processes. It also serves as a reminder of the proper structure for urgent interim relief applications and the distinction between subscription for shares and payment for shares.