Many hedge fund observers will have their eyes on CSX's annual shareholders' meeting on June 25 - a meeting that takes place amid much wrangling between the US railway operator and its hedge fund shareholders, The Children's Investment Fund Management and 3G Capital Partners.

Last week, the judge at a federal appeals court agreed with CSX that TCI and 3G had dodged certain disclosure requirements in the months prior to a bitter and public proxy fight over the make-up of the company's board. CSX had wanted votes amounting to 6.4 per cent of its stock to be invalidated, because the judge had determined that when the shares were acquired by the funds, they had failed to meet their disclosure obligations.

However, the court ruled that although the disclosures were belated, the delay had not caused irreparable harm to the company's shareholders. Therefore the judge granted only CSX's request that the funds be monitored to prevent future violations of securities laws.

The decision is far from final, with both parties planning to appeal. But the funds have also received backing from the Securities and Exchange Commission, which ruled that TCI did not violate reporting requirements by failing to disclose beneficial ownership during swap transactions involving CSX shares.

TCI and 3G remain free to vote any shares they own. The hedge funds, which now hold 8.3 per cent of the company's stock between them, have nominated a competing slate of five directors for election to CSX's 12-member board. It should be an interesting voting session. The action starts tomorrow.