In a novel judgment of Mr Justice McMillan delivered on 1 August 2017, the Grand Court of the Cayman Islands awarded costs against non-parties that did not fund or control the proceedings in issue. The Court also clarified that the costs rule for sanction applications (CWR O.24 r.9) is applicable to an application by a liquidator under sections 103 and/or 138 of the Companies Law.
New legislation has been enacted in the British Virgin Islands (the “BVI”) to require registered agents to establish and maintain a beneficial ownership database (“UBO Database”) and requiring the Government of the British Virgin Islands to establish and maintain a search platform, referred to as Beneficial Ownership Secure System (“BOSS”), enabling each licensed registered agent to establish such database and a limited number of designated persons to access each database established by a registered agent.
The Privy Council clarified the priorities in a liquidation of investors who seek to redeem their shares in a Cayman Islands fund before the commencement of its winding up but who remain unpaid: Pearson v Primeo [2017] UKPC 19.
The Grand Court of the Cayman Islands has delivered three decisions concerning the statutory merger regime under section 238 of the Companies Law, which is typically triggered by the taking private of a publically listed Cayman Islands company. S.238 requires the Court to determine the “fair value” of shares compulsorily purchased from a shareholder who dissents from the merger. All three cases involved the same investors as dissenting shareholders.
New legislation has been enacted in the Cayman Islands to require Cayman Islands’ companies (including LLCs) to implement beneficial ownership registers (the “BOR Registers”) and requiring the Minister charged with responsibility for Financial Services, or a person designated by him (the “Competent Authority”) to establish a search platform enabling the information contained in the BOR Registers to be searched (the “Platform”). The date of implementation is yet to be appointed by Cabinet but is expected to be on or around 26 June 2017 to coincide with the Fourth EU Anti-Money Laundering Directive which also requires centralised beneficial ownership registers to be implemented by EU member states.
In a January 2017 judgment, the Cayman Islands Grand Court has concluded that a Cayman company may apply for the appointment of restructuring provisional liquidators where a creditor’s winding up petition has been filed in respect of the company, even if the company could not have filed a winding up petition itself. This adds to the ongoing debate on restructuring provisional liquidations in the Cayman Islands as highlighted in the conflicting decisions of China Shanshui and China Milk.
The Grand Court of the Cayman Islands gives general guidance in SPhinX about how to balance the principle of open justice with a concern for confidentiality, in the context of an application for a sealing order.
The Cayman Grand Court confirms that a worldwide freezing injunction may be granted in support of foreign proceedings against a non-resident of the Islands: Meridien Trust v Eike Batista Da Silva.
The provisions of the Nairobi Wreck Removal Convention (the “Convention”) now apply in the Cayman Islands. This has implications for both Cayman Islands flagged vessels and vessels operating in Cayman waters. Owners and masters should pay particular attention to the reporting and insurance requirements under the Convention.
First Weavering preference claim upheld by Court of Appeal: In a judgment delivered on 18 November 2016, the Cayman Islands Court of Appeal unanimously dismissed the appeal of Skandinaviska Enskilda Banken AB (Publ) against the Grand Court’s finding that payments it had received from Weavering Macro Fixed Income Fund Ltd were voidable preferences that must be repaid to the fund’s liquidators. The Court also took the opportunity to comment on a number of principles of Cayman insolvency law in a way that is likely to have implications far beyond the world of voidable preferences. SEB will be appealing this decision to the Privy Council.