Abdul Kadir Sulaiman JCA:

This appeal centres around the interpretation of art. 21 of the first respondent's Memorandum and Articles of Association. The said Article states as follows:

21. The right of members to transfer their shares shall be restricted as follows:

(a)A share may be transferred by a member or other person entitled to transfer to any member selected by the transferor; but save as aforesaid, and save as provided by sub-clause (f) and (g) hereof, no share shall be transferred to a person who is not a member so long as any member or any person selected by the directors as one whom it is desirable in the interests of the Company to admit to membership, is willing to purchase the same at a fair value.

(b)Except where the transfer is made pursuant to sub-clauses (f) and (g) hereof, the person proposing to transfer any share (hereinafter called "the proposing transferor") shall give notice in writing to the Company (hereinafter called "transfer notice") that he desires to transfer the same. Such notice shall specify the sum he fixes as the fair value, and shall constitute the Company his agent for the sale to any member of the Company (or person selected as aforesaid) willing to purchase the same (hereinafter called "the purchasing member") at the price so fixed, or, at the option of the purchasing member, at the fair value to be fixed in accordance with sub-clause (d) hereof. A transfer notice may include several shares, and in such case shall operate as if it were a separate notice in respect of each. A transfer notice shall not be revocable except with the consent of the directors.

(c)If the Company shall, within the space of twenty-eight days after being served with a transfer notice, find a purchasing member and shall give notice to the proposing transferor, he shall be bound, upon payment of the fair value as fixed in accordance with sub-clause (b) or (d) hereof, to transfer the share to the purchasing member.

(d)In case any difference arises between the proposing transferor and the purchasing member as to the fair value of a share, the auditor shall, on the application of either party, certify in writing the sum which in his opinion is the fair value, and such sum shall be deemed to be fair value, and in so certifying the auditor shall be considered to be an expert, and accordingly the Arbitration Ordinance shall not apply.

(e)If in any case the proposing transferor, after having become bound as aforesaid, makes default in transferring the share, the Company may receive the purchase money, and the proposing transferor shall be deemed to have appointed any one director or the secretary of the Company as his agent to execute a transfer of the share to the purchasing member, and upon the execution of the transfer the Company shall hold the purchase-money upon trust for the proposing transferor. The receipt of the Company for the purchase money shall be a good discharge to the purchasing member, and after his name has been entered in the register in purported exercise of the aforesaid power, the validity of the proceedings shall not be questioned by any person.

(f)If the Company shall not, within the space of twenty-eight days after being served with a transfer notice, find a purchasing member and give notice in manner aforesaid, the proposing transferor shall at any time within three months afterwards be at liberty, subject to subclause (h) hereof, to sell and transfer the share to any person and at any price.

(g)Any share of a deceased member may be transferred by his executors or administrators to any child or other issue or relative of such deceased member to whom such deceased may have specifically bequeathed the same, and shares standing in the name of the trustees of the will of any deceased member may be transferred upon any change of trustees to the trustees to the trustees for the time being of such will, and sub-clause (a) hereof shall not apply to any transfer authorised by this sub-clause.

(h