The Cayman Islands has played a significant role as an early adopter of global tax and transparency initiatives. On 18 June 2013, Cayman reinforced its commitment to accepted global advancements against tax evasion, and published an Action Plan for response to new guidelines designed to prevent the misuse of legal structures, such as companies and trusts, and which include provisions relating to improved transparency of beneficial ownership.
In Re: FIA Leveraged Fund the Cayman Islands Court of Appeal ('CICA') had to consider what should happen when a fund's contract documents are not sufficiently clear on the procedures and means by which a redemption can be made. The issue was the right of the fund to meet a redemption request by a payment in kind.
Prest v Petrodel Resources Limited and others  UKSC 34
Hot on the heels of VTB Capital plc v Nutritek International Corpn (see our earlier report) is another case on the sanctity of separate corporate identity from that of the individual who owns the shares and controls the corporate activities. In the, perhaps, slightly unlikely area of Matrimonial Law the English Supreme Court has reviewed and confirmed the very limited circumstances where separate corporate identity can be ignored.
Re: FIA Leveraged Fund
Redemption in kind
The Cayman Islands Court of Appeal's ("CICA") decision on redemption in kind in Re: FIA Leveraged Fund has been widely reported. The Court had to consider the rights of a fund to meet a redemption request by a distribution in kind. It found that unless the contract documents say otherwise, if a fund wants to meet a redemption request by distributing an asset rather than cash, then it can only use an asset which it held at the time the investor was entitled to be paid. FIA Leveraged Fund had not done so, which meant it had failed to satisfy the redemption debt and was properly wound up on the ground it was insolvent.
Microsoft Corporation v Vadem Ltd - Claim No. BVIHC (COM) 2012/0048
Imagine you are a shareholder in a BVI parent company, and you find that its Californian subsidiary has sold valuable patents on terms which you consider are suspiciously favourable. Neither the parent nor the subsidiary company is prepared to bring a claim, so what can you do?
Danka Business Systems Plc (In Liquidation), Re Also known as: Ricoh Europe Holdings BV v Spratt Court of Appeal (Civil Division) 19 February 2013  EWCA Civ 92:
A liquidator does not have to wait for a contingent claim to crystalise before making a final distribution to members. Once a contingent claim has been admitted to proof as a debt under Rule 4.86(1) of the Insolvency Rules 1986 the liquidator is only obliged to value it, taking into account the likelihood of any contingency. Once he has done so then he can proceed to make a distribution of the company’s assets.
James Samuel Jackson v James Steven Jackson and Jerome Steven Jackson - Grand Court of the Cayman Islands, Civil Division, Cause No.7 of 2012 4 and 16 April 2013
In a recent case before the Cayman Islands Grand Court in Chambers, the Chief Justice was faced with a Plaintiff who had applied for and obtained a default judgment based on a Statement of Claim which was filed "in deliberate and flagrant breach of an order of the Court" and "served outside of the deadline imposed by an order of the Court".
Global Torch Ltd v Apex Global Management Ltd. and others  All ER (D) 159
A winding up petition was recently presented in the Grand Court of the Cayman Islands which had all identifying features obscured. There are very limited circumstances when any Court will allow parties before it to keep commercial matters private.
With the recent praise for the Islands' "robust and transparent" legal and regulatory regime in the Organisation for Economic Co-operation and Development's (OECD's) latest Global Forum Peer Review report, it is worth remembering the reasons behind the Islands' success as a financial centre.
Wuhan Guoyu Logistics Group Co Ltd v Emporiki Bank of Greece SA UK Court of Appeal (Civil Division)
In December last year the UK's Court of Appeal looked at whether a guarantee provided by a bank in connection with installment payments on the construction of a ship was in fact what it had been called - a guarantee - or whether it was an on-demand bond.
Death and Taxes are certain - but not for Cayman!
Cayman has always been known for two things: its amazing Seven Mile Beach and being the fifth largest financial centre in the world (to the tourists, it's the place with all of those banks!). Its recognition as a renowned financial centre is well established with key players in the global financial industry. Much of this is attributed to the 'brick and mortar' of the professions...
Navig8 Pte Ltd v. Al-Riyadh Co for Vegetable Oil Industry  EWHC 328 (Comm)
A Singaporean company ("Navig8") had applied in the UK to serve proceedings in Jordan for an anti-suit injunction, to stop proceedings brought against it by a Jordanian company ("Al-Riyadh") and for equitable damages. It had also applied for negative declarations that it was not a party to certain bills of lading, and therefore it had no liability to Al-Riyadh. It was given permission to serve proceedings in Jordan in respect of the negative declarations only, and Al-Riyadh appealed.
Somers Dublin Ltd A/C KBCS v Monarch Pointe Fund Limited (In Liquidation)
Having applied to redeem your shares in a fund, but before being paid your redemption monies, you discover the fund is being wound up. Where do you stand in the creditors' line?
Kudos Catering (UK) Ltd v Manchester Central Convention 7 February 2013  EWCA Civ 38 :
An apparently clear clause excluding an employer's liability for any potential loss of profit by its subcontractor was interpreted by the UK's Court of Appeal to be ineffective.
On 25 March 2013 the Insurance (Amendment) Law (the "Amendment Law") was enacted to allow Cayman Islands segregated portfolio insurers ("SPC insurers") to incorporate their cells for the first time. The Amendment Law, whilst now on the statute book, is not yet in force but will be brought into force once necessary amendments have been made to the Insurance Regulations.
Advisory: The rules under the AIFMD are extensive, some still provisional, and their detail falls beyond the scope of a short discussion. Please contact us for specific advice on whether they affect your business conducted in or from the Cayman Islands.
New Companies Winding up Rules - Orders 8, 9, 11, 15, 19 and Forms
Last in a series considering The Companies Law (2012 Revision) -Companies Winding Up (Amendment) Rules, 2013 [Supplement No. 3 published with Gazette No. 04, dated 25 February, 2013.]
As of 1 March 2013 the Companies Winding-Up Rules in Cayman have been amended. The rules that have been changed are under Orders 3, 8, 9, 11, 15, 19 and 25, and some of the forms have also been changed. Previously we’ve looked at the appointment of foreign lawyers in regard to changes arising from Order 25, at the petition and changes to Order 3. Here we take a brief look at the remaining changes to Orders 8, 9, 11, 15, 19 and changes to three forms.
New Companies Winding up Rules - Order 3: Petitions and Orders
Second in a series considering The Companies Law (2012 Revision) -Companies Winding Up (Amendment) Rules, 2013 [Supplement No. 3 published with Gazette No. 04, dated 25 February, 2013.]
As of 1 March 2013 the Companies Winding-Up Rules in Cayman have been amended. The rules that have been changed are under Orders 3, 8, 9, 11, 15, 19 and 25, and some of the forms have also been changed. We have already looked at the appointment of foreign lawyers by liquidators under O25, here we take a brief look at changes to Order 3.
THE COMPANIES LAW (2012 REVISION) -COMPANIES WINDING UP (AMENDMENT) RULES, 2013
Supplement No. 3 published with Gazette No. 04, dated 25 February, 2013.
The Official Liquidator's Lawyers -Order 25
Among the amendments to the Companies Winding Up Rules which take effect today (1 March 2013) there are some changes to the way liquidators can engage non-Caymanian lawyers. There are no changes to any engagement letter or retainer agreement made prior to 1st March 2013, but from today on the rules now provide that no...
Five steps to compliance with the Cayman Economic Substance test...
The Cayman Islands (‘Cayman’) International Tax Co-operation (Economic Substance) Law,...