The battle, which resumed in the Court of Appeal at Wellington on Monday, could have dragged on for a week or longer with protracted legal arguments about the intent of the Securities Amendments Act, under which insider trading cases are brought, and the exact circumstances surrounding the minority shareholders selling their Southern Petroleum stakes in November 1995.

However, after only two days of submissions, the court - of Justices Gault (presiding), Keith, Glazebrook, McGrath, and Tipping - yesterday reserved its decision. Afterwards shareholders' counsel Colin Carruthers QC is reported to have said he did not expect a judgment for at least several months.

Last June about 750 disgruntled Southern Petroleum shareholders won High Court approval to pursue their insider trading case over the Fletcher Challenge Energy takeover of the former listed company in 1995. Shell NZ, which bought FCE two years ago, appealed that decision on the basis that the shareholders' case was not arguable.

At the time of the FCE takeover of Southern Petroleum, the minority shareholders were paid NZ75 cents a share but are seeking $NZ23 million in compensation, including penalties and interest.

They believed they would have received $NZ1.25 more a share had FCE not withheld vital information about the size of Southern Petroleum's Taranaki oil and gas prospects, including a stake in the licence which later yielded the 500-600 bcf Pohokura gas discovery.

They also claimed former FCE and Petrocorp director James Patek advised and encouraged FCE to buy out Southern Petroleum minority shareholders and actively advised the minorities to sell, despite allegedly having information that would have increased the price if disclosed.

Patek allegedly received the information in his capacity as a Petrocorp director from a presentation about Taranaki energy prospects in November 1995.

However, Shell counsel Jim Farmer QC this week said the crucial matter was whether there was evidence of a causative link between FCE and Patek knowing inside information and acting on it to tip the buying of Southern Petroleum stock.

He argued that Patek acquired inside information by reason of his position as a director of then Fletcher subsidiary Petrocorp and not by reason of his position as a director of Southern Petroleum.