In 2017, Rwanda amended its companies act and introduced appraisal rights for minority shareholders [.pdf].  A recent article in the New Times provides an overview of, and reflects on, the efficacy of Rwandan appraisal.  The parallels between Rwandan appraisal (as described in the links provided) and Delaware appraisal are notable: appraisal is offered to dissenting shareholders who would otherwise be forced to accept certain major corporate actions (such as a merger); the dissenting shareholder must demand appraisal; and the Company must then pay the dissenter “fair value” for their shares; and strict timelines govern the entire process.

Notably different is that in Rwanda (again, according to the sources noted) the determination of fair value occurs by a set of arbitrators. Who appoints the arbitrators, precisely what criteria they shall use, and whether the dissenter then has recourse to the Rwandan courts is not made clear from the Act.  While this is certainly different than what we see in Delaware, requiring arbitration of appraisal rights is not without precedent in the US.  See, for example, this notice of appraisal rights to limited partners that requires arbitration.

What is particularly notable about Rwanda is that the appraisal rights provided are new – now only two years old.  As with other jurisdictions like Delaware, the Cayman Islands, or South Africa, no doubt the progress of cases and practical experience among deal lawyers and others will refine the appraisal practice in that country over time.

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