Iris Corporation Bhd v Tan Sri Razali bin Ismail & Ors

Appellant(s): Iris Corporation Bhd

Respondent(s):

• Tan Sri Razali Bin Ismail
• Datuk Tan Say Jim
• Yam Tunku Dato Seri Shahbuddin Bin Tunku Besar Burhanuddin
• Dato Hamdan Bin Mohd Hassan
• Dato Eow Kwan Hoong
• Chan Feoi Chun
• Syed Abdullah Bin Syed Abd Kadir
• Datuk Noor Ehsanuddin Bin Hj Mohd Harun Narrashid
• Datuk Nik Azman Bin Mohd Zain

• YA Datuk Ravinthran a/l Paramaguru
• Dato' Dr. Choo Kah Sing
• YA Dato' Ahmad Fairuz bin Zainol Abidin

• The appellant, a public listed company, sued its nine former directors (the respondents) for alleged breaches of directors' duties.
• The claims stemmed from an investment of approximately RM 11.7 million (£2.05 million) in Border Control Solutions Limited (BCS), a UK company, to participate in the privatisation of the UK Border Force.
• The investment ultimately failed, leading to BCS being wound up, and the appellant sought damages for the amounts invested and paid.

• Whether the directors breached their fiduciary duties, duties to act in good faith, duties of care and skill, and various statutory duties under the Companies Act 2016.
• Whether the directors were protected by the business judgment rule under Sections 214 and 215 of the Companies Act 2016 for their decision to approve the investment.
• Whether the High Court erred in its assessment of the competing investigative reports, the application of the objective test for directors' duties, and the procedural requirements for default judgment against the 8th respondent.

• The Court of Appeal dismissed the appeal, affirming the High Court's decision that the directors had not breached their duties and were protected by the business judgment rule.
• The Court held that the directors satisfied the requirements of Section 214, having acted for proper purposes, in good faith, without material personal interest, adequately informed, and reasonably believing the decision was in the company's best interest, emphasizing that business decisions must not be assessed with hindsight bias.
• The Court found the High Court correctly preferred the earlier, more comprehensive investigative report over the later, incomplete and potentially biased report, and affirmed the High Court's refusal to enter default judgment against the 8th respondent due to the appellant's failure to comply with mandatory procedural rules.