Section 223 - Determination of fair and reasonable price for purchase of shares by company

(1) Where a member raises an objection to the price of shares stated by the board of directors under subsection (2) of section 222, the company shall

(a) pay to the member concerned, a provisional price in respect of each share equal to the price stated by the Board of directors, and

(b) refer the matter to an auditor to determine a fair and reasonable price for the shares within seven days.

(2) When the payment of the provisional price is made, the member concerned shall take the steps required to transfer the shares to the company.

(3) Where after fourteen days, the auditor is unable to determine a fair and reasonable price for the shares,

(a) the member concerned and the Board shall each appoint an arbitrator; and

(b) the member and the Board shall agree on an umpire.

(4) The company shall bear the costs for the appointment of an arbitrator under subsection (3).

(5) Where the member and Board are unable to agree on the appointment of a third arbitrator as umpire, the Court may appoint the umpire.

(6) A reference to arbitration under this section, shall be deemed to be a submission to arbitration in accordance with the Alternative Dispute Resolution Act, 2010 (Act 798).

(7) The arbitrator shall expeditiously determine a fair and reasonable price for the shares on the day before the date on which the members determined by special resolution authorising the respective action under subsection (1) of section 220 excluding any appreciation or depreciation directly or indirectly induced by the action or the proposal.

(8) The price determined by the arbitrator shall be binding on the company and the member concerned.

(9) Where the price of shares to be determined are listed on a Stock Exchange or traded on a stock market, the arbitrator shall determine the price for the shares as being the price at which shares of that kind are traded on the Stock Exchange or stock market as at the close of business on the day before the date on which the members determined by special resolution for the authorising of the respective action excluding any appreciation or depreciation directly or indirectly induced by the action or the proposal unless a price determined in accordance with this subsection would be clearly unfair, in all the circumstances to the member concerned.

(10) Where the price determined in accordance with a provision of this section

(a) exceeds the provisional price, the company shall immediately pay the outstanding balance to the respective member; or

(b) is less than the provisional price paid, the company may recover from the respective member the excess paid.

(11) The arbitrator may award interest on any balance payable or in excess to be repaid under subsection (10) at the rate that the arbitrator thinks fit, having regard to whether the provisional price paid or the reference to arbitration, as the case may be, was reasonable.