Platform: While Aer Lingus has been subsumed by its militant pilots, other important issues remain unresolved and they need to be addressed. Holding an egm (extraordinary general meeting) to consider the Shannon-Heathrow service, as requisitioned by Ryanair, have taken a back seat. They shouldn't, writes Bill Murdoch.

Two requisitions by Ryanair for egms have been turned down. The first one was to discuss the move to Belfast and the move out of Shannon; the second one was to reverse the decision to exit Shannon to Heathrow service.

Both were turned down on the basis that they would infringe Irish and EU competition laws. Ryanair contends that Aer Lingus is acting illegally. Stalemate seems to have ensued. So which side is right?

Aer Lingus's articles of association allows such a meeting so long as the requisitioner has 10 per cent or more of the equity. More importantly, section 132 of the Companies Act 1963 clearly states that "notwithstanding anything in its articles", the directors of the company, "provided the requisitioner has 10 per cent or more of the equity, shall forthwith proceed duly to convene an extraordinary general meeting of the company".

It appears clear that Aer Lingus is in breach of our company legislation. Aer Lingus, however, disagrees. Wouldn't it have been more equitable to have gone ahead with the meeting and, if the motion was carried, had its validity sanctioned/turned down by the courts?

The act goes on to state that "if the directors do not, within 21 days from the date of the deposit of the requisition, proceed duly to convene a meeting to be held within two months from the said date, the requisitionists, or any of them representing more than one half of the total voting rights of all of them, may themselves convene a meeting".

So Michael O'Leary, the ebullient head of Ryanair, was right when he said, in a seemingly jocular manner, that he might request such a meeting himself.

However, the act makes clear that such a meeting may not be held after the expiration of three months from the date of the request of such a meeting by Ryanair. So a requisition would have to be made by the middle of next month, otherwise it will forfeit these rights.

Ryanair has merely said it is considering its legal options.

Interestingly, expenses incurred would have to be paid by Aer Lingus, which bears out O'Leary's comment that he would hold such a meeting in the Four Seasons or Shelbourne hotels, with a free bar for investors who attend - although he would need to bear in mind that such expenses have to be "reasonable", according to the act.

Another section of the act allows "any member of the company" to petition the court to sanction such a meeting. In this scenario, the court could dictate the "manner" of the meeting.

A book on the Companies Acts just published by Lyndon MacCann & Thomas B Courtney says directors who do not proceed with an egm may expose themselves to an action for oppression. This suggests the Aer Lingus board is walking on very brittle legal ground.

Clearly the Aer Lingus board could not go ahead with a motion which would have illegal implications - eg a criminal act. Citing breaches of competition rules could be valid, though this is open to interpretation, providing a field day for the legal eagles.

It is perhaps ironic that Ryanair will be entitled to vote at the egm - expected to be called before the end of the year - to approve Aer Lingus's long-haul aircraft order. Does this not provide a "competitor" (Ryanair) influence over these proceedings? Aer Lingus, which is seeking to force Ryanair to sell its 29.4 per cent in the company, is also understood to be trying to get the EU courts to stop Ryanair from voting on competitive issues.

Now that Aer Lingus has turned down the request to hold an egm, the ball is firmly back in O'Leary's court. Ryanair could have made it more difficult - and embarrassing - for Aer Lingus by proposing the motion to discuss the Shannon-Heathrow issue with the condition that the vote was subject to approval by the competition authorities.

Hopefully, O'Leary's intention is not frivolous and mainly an attempt to embarrass the Government (which has a 25 per cent stake) in casting its vote (or abstaining) on the contentious Shannon problem, with all its political ramifications.

If he is serious, he should force the issue and exercise his right by calling an egm.

In this scenario, Aer Lingus would have a number of options but the obvious one would be to seek an injunction. It would then have to prove its case which would accelerate a conclusion.

Loose threads like we have now benefit neither company and the main beneficiaries of a long legal dispute would be the lawyers.