Category Archives: Client Advisories

Taking security over a BVI limited partnership interest – issues for lenders

02 Aug 2018

We note that interest is growing in the new form of British Virgin Islands limited partnership that can be registered under the Limited Partnership Act 2017 (the “Act”). In the context of banking and finance transactions, there is increasing awareness among lenders of the ability to take security over limited partnership interests. Taking security over limited partnership interests can be useful in a variety of finance transactions, whether the security is being granted by the borrower or a third party.

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Volume of Open Justice Turned Down: Confidentiality Orders in Trust Administration

How to strike the balance between open justice and confidentiality? In reasons delivered on 25 July 2018 in respect of an Ex Parte Originating Summons (“Confidentiality Summons”) issued in March 2018 in connection with In the Matter of Settlement dated 16 December 2009, the Grand Court of the Cayman Islands considered whether to make confidentiality orders in the context of a case involving the proper administration of a Cayman Islands discretionary trust. The application raised constitutional and public policy issues pertaining to the tension between the constitutionally-enshrined requirements of open justice and legitimate private grounds for confidentiality.

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Privy Council Dismisses Final Appeal in Long-Running Hedge Fund Investor Litigation

22 Jun 2018

In a judgment delivered on 18 June 2018, the Privy Council has dismissed the appeal by Emirati businessman Riad Tawfiq Al Sadik against judgments of the Grand Court and the Cayman Islands Court of Appeal which had both dismissed his claim to recover in excess of US$50 million in leveraged investment losses in hedge funds that were suffered during the 2008 financial crisis. The Privy Council rejected all of the arguments advanced by Mr Al Sadik in an attempt to establish liability on the part of Investcorp Bank BSC (“Investcorp”) for his investment losses.

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Changes to Anti-Money Laundering Laws and Practices for Cayman Islands Entities

16 Apr 2018

In response to the Financial Action Task Force (“FATF”) recommendations to combat money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction, there have been significant changes to the anti-money laundering laws and practices of the Cayman Islands. On 6 April 2018, the Cayman Islands Monetary Authority (“CIMA”) published a Notice further clarifying the recently issued Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands (“AML Guidance Notes”).

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Fair Value Proceedings: Shanda Games

28 Mar 2018

The Court of Appeal of the Cayman Islands (“CICA”) has reversed the Grand Court on an important point of principle for determination of the “fair value” of the shares of a shareholder who dissents from a statutory merger under Part XVI of the Companies Law. See Shanda Games (CICA 12 of 2017, unrep., 6 March 2018).

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Cayman fund in liquidation ordered to pay costs of Cayman and New York proceedings on the indemnity basis

In a Ruling that will be of interest to users of the Cayman courts, the Grand Court has ordered a Cayman fund in liquidation to pay (i) as damages, the costs of foreign proceedings commenced in breach of contract and (ii) on the indemnity basis, the costs of the Cayman anti-suit proceedings brought to restrain the continuation of the foreign proceedings.
The Ruling provides further guidance as to the circumstances in which the Court will order costs of Cayman proceedings to be paid on the indemnity basis and is understood to be the first time that the Grand Court has awarded as damages the costs of foreign proceedings commenced in breach of contract.

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Anti-suit injunction granted by Grand Court to restrain Cayman liquidators from continuing New York litigation

15 Feb 2018

In a judgment delivered on 13 February 2018, the Grand Court of the Cayman Islands granted an anti-suit injunction to restrain liquidators of a Cayman fund from continuing litigation commenced in New York in breach of a contractual dispute resolution procedure. The judgment addresses a number of novel arguments concerning the interpretation of the Cayman Islands’ Arbitration Law, 2012 and will be of particular interest to insolvency practitioners, auditors and other Cayman professional service providers delegating work internationally.

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