Company Law

Company Constitution Cases

Hickman v Kent or Romney Marsh Sheep-Breeders’ Association [1915] 1 Ch 881

Key Point

• Articles of association cannot constitute a contract between a company and an outsider, but they constitute a contract between a company and its members in respect of their ordinary rights as members.

Facts

• The defendant association was incorporated as a not-for-profit company. Article 49 of its articles provided that disputes between the association and any of its members should be referred to arbitration.
• The plaintiff was a member. He brought an action claiming various irregularities in the affairs of the association, including the refusal to register his sheep in its published flock book, and a threat to expel him from membership.
• The defendant was granted a stay of proceedings on the ground that the relevant statutory provision (predecessor to s.33 CA 2006) made Article 49 (agreement to arbitrate) enforceable as between the association and its members.