Private Client & Offshore Services updates
Bahamas
Contributed by Lennox PatonPayment of preferential debts out of assets subject to floating charge not permitted
- Bahamas
- October 26 2017
The Supreme Court recently considered whether preferential creditors have any claim against the moneys received by receiver-managers for the sale of assets subject to a charge. The court determined that a floating charge which crystallised before the making of a winding-up order takes priority over other creditors.
Privy Council clarifies Bahamian law on appealing interlocutory judgments
- Bahamas
- June 15 2017
There has been some debate over the lack of clarity regarding the concurrent jurisdiction of the Supreme Court and the Court of Appeal as to where and when applications for leave to appeal and stays should be made. A recent Judicial Committee of the Privy Council ruling has clarified this area of the law and given attorneys clear guidance regarding the proper procedure for appealing interlocutory judgments and applying for a stay pending appeal in the Bahamas.
Remittal of assets in cross-border insolvency proceedings
- Bahamas
- April 20 2017
The Bahamas Supreme Court recently considered the relationship between the statutory provisions in recognition proceedings which permit the turnover of property to a debtor (a foreign corporation or other foreign legal entity subject to a foreign proceeding in the country in which it is incorporated or established) and the common law power to direct remittal of assets to the foreign main proceedings where an ancillary liquidation is underway.
Hastings-Bass rule enshrined in law
- Bahamas
- April 13 2017
The recently enacted Trustee (Amendment) Act has clarified the law relating to trustee indemnities and given statutory effect to the rule in Re Hastings-Bass. With the passing of the act, the Bahamas has fortified its position as a leading offshore financial centre. It is expected that the codification of the rule will benefit trustees, protectors, beneficiaries and other persons who can apply to the court to unwind any perceived hard consequences flowing from an exercise of a fiduciary power.
Receiver-managers obtain court's blessing: self-dealing and fair-dealing rules not violated
- Bahamas
- December 15 2016
The joint receiver-managers of the assets of Baha Mar applied to the Supreme Court for a direction that the intended sale of Baha Mar's secured assets to a special purpose vehicle (SPV) would not amount to self-dealing or infringe the fair-dealing rule. The court was satisfied that the sale to the SPV was pursued by the joint receiver-managers in good faith and achieved after adequate precautions were taken to achieve the best price reasonably obtainable at the time.
Belize
Contributed by Courtenay Coye LLPThe importance of legal advice for timeshare rights
- Belize
- July 16 2015
The Supreme Court recently highlighted the need to comply strictly with essential legal requirements when investing in property abroad. It found that US citizens who had purchased timeshare interests in a residential resort could not exercise their purported rights in priority of a bank's mortgage interest on the property because they had not registered their timeshares or paid the required stamp duty.
Directors' indemnities foolproof
- Belize
- April 16 2015
The Belize Court of Appeal recently confirmed that indemnities given by a Belizean company to its directors deprived the company of a cause of action to pursue a claim against former directors for decisions taken during their term as company directors. Belize continues to recognise blanket indemnities given by a company to directors as legal.
Appeal Court clarifies procedural law on claims against foreign defendants
- Belize
- September 04 2014
The Belize Court of Appeal has provided guidance to litigants involved in multi-jurisdictional litigation. The court interpreted the rules applicable to commencing a claim against foreign defendants, and service of a claim form and interim injunction on parties outside the jurisdiction. Under the Civil Procedure Rules there is no need to obtain permission to issue a claim form for service abroad.
Enforcement of LCIA award refused as contrary to public policy
- Belize
- May 22 2014
The Caribbean Court of Justice has addressed the issue of whether New York Convention Awards should be enforced. The case is exceptional and should be confined to its unusual facts. However, it stands as highly persuasive authority for the proposition that violations of the constitutional order by a government when affording tax concessions to investors may afford a defence to enforcement of an arbitral award.
Caribbean Court of Justice rules government must arbitrate under treaty
- Belize
- August 08 2013
The Caribbean Court of Justice has delivered a landmark decision which narrows the circumstances in which a government may resort to its domestic courts to restrain international arbitration proceedings. The decision is an important victory for international investors in the Commonwealth Caribbean, since many bilateral investment treaties include clauses for resolution of disputes by international arbitration.
British Virgin Islands
Contributed by Harney Westwood & RiegelsAvoiding evasion: court takes pragmatic approach to serving uncooperative defendants abroad
- British Virgin Islands
- June 14 2018
International litigation and asset recovery require the pursuit of defendants and their assets across borders; therefore, it is a routine aspect of BVI litigation for claimants to serve legal documents abroad. Two recent decisions should significantly decrease the delay in effecting service abroad and pave the way for a more efficient approach to service out in the future.
No armchair liquidators – court confirms appointment of provisional liquidators to Swiss company
- British Virgin Islands
- June 07 2018
In the latest judgment regarding the DPH liquidation, the BVI Court of Appeal upheld the appointment of BVI provisional liquidators in respect of a Swiss company and clarified that evidence of dissipation of assets (in the Mareva sense) may not be a pre-condition to the appointment of provisional liquidators.
Procedure for appeal counter notice clarified – it is a parasite
- British Virgin Islands
- May 31 2018
A recent BVI Court of Appeal judgment was issued on a point rarely taken: is leave required to file a counter notice to an existing appeal? The full court found that once an appeal has been commenced with leave, the court's jurisdiction is engaged and the party wishing to cross-appeal may do so by counter notice without bringing a separate leave application. The court described a counter notice as being by its nature "parasitical on a pending appeal".
Tick, tock – the need to keep an eye on the clock in liquidator applications
- British Virgin Islands
- May 24 2018
A recent Court of Appeal decision serves as a useful reminder to keep an eye on the clock when seeking the appointment of liquidators to a company in the British Virgin Islands. The decision makes clear that any extension must be expressly granted and legal practitioners must therefore keep an eye on the clock to avoid a deemed dismissal under Section 168 of the Insolvency Act.
Court strikes out passing-off claim in relation to goodwill held outside British Virgin Islands
- British Virgin Islands
- May 17 2018
Claims of passing off are rare in the British Virgin Islands and a recent attempt to bring a BVI action in relation to goodwill held outside the jurisdiction has failed. The court examined the law and relevant English authorities on the tort of passing off. It opined that goodwill is governed by territoriality and that in order to succeed, the claimant must prove that it has goodwill in the form of customers in the jurisdiction in which the suit is undertaken.
Cayman Islands
Contributed by Harney Westwood & RiegelsGetting schooled in Nord Anglia – extra safeguards for companies facing appraisal litigation
- Cayman Islands
- June 07 2018
In Nord Anglia the justice made directions orders regarding the use of keyword searches, the number and scope of information requests, and the conduct of management meetings consistent with the orders made in Xiadu Life Technology. Further, the judgment will provide welcome safeguards for companies facing appraisal litigation in the Cayman Islands if adopted on a wider basis.
Shanda Games: Court of Appeal confirms timing for leave to appeal to Privy Council
- Cayman Islands
- May 31 2018
Appeals to the Privy Council from the Court of Appeal are regulated in the Cayman Islands (Appeals to Privy Council) Order 1984. However, the order does not provide for how to determine the date of a decision. The Court of Appeal recently ruled that for the purposes of an application for leave to appeal to the Privy Council, time runs from the date on which an order is sealed or perfected, not the date on which the judgment is delivered.
Court reaffirms high threshold for case management stays
- Cayman Islands
- May 24 2018
In a recent case, a petition to wind up a company was issued by its majority shareholder. The minority shareholder – a Samoan entity – issued an application to stay the petition on the basis that there were related proceedings in Samoa and held that Samoa was the proper forum in which to argue these matters. The court refused to grant the stay, finding that the high burden imposed in stay applications of this type had not been met.
Proceedings bowled out after unplayable delivery
- Cayman Islands
- May 17 2018
The Grand Court of the Cayman Islands recently set aside service of proceedings against a foreign defendant, concluding that the plaintiff had abused the court process in pursuing the proceedings and failed to establish that the court should exercise its jurisdiction over the defendant. The court held that the defendant's immunity as the employee of a New Zealand crown entity was an "unplayable delivery" for the plaintiff and weighed heavily against the exercise of the court's exorbitant jurisdiction.
Court of Appeal rules on dissenters' discovery
- Cayman Islands
- May 10 2018
It has long been argued that no sui generis category of litigants is exempt from the general rules of discovery, which aim to protect the integrity of the litigation process. The Cayman Islands Court of Appeal recently released its decision in the appeal of a directions order, in which the contested issue was whether dissenting shareholders in appraisal actions under Section 238 of the Companies Law are required to give discovery.
Cyprus
Contributed by A G Paphitis & CoTaxation of Cyprus international trusts
- Cyprus
- March 15 2018
Cyprus international trusts, which are subject to the International Trusts (Amendment) Law 1992, provide a significant number of tax advantages and can be used as part of an international tax planning strategy. In order to estimate the tax that should be imposed on a trust, its specifications, purpose and any other relevant circumstances must be considered.
Private investments in Cyprus – a bright future
- Cyprus
- December 14 2017
Cyprus saw its highest increase in gross domestic product in almost a decade in the first quarter of 2017. The dark days of the 2013 financial crisis appear to be in the past and foreign investment remains at the heart of government strategy, aided by factors such as the citizenship-by-investment programme, which will help to attract private investment in the property, retail and pharmaceutical sectors.
Tax residency can be obtained by staying in Cyprus for 60 days a year
- Cyprus
- September 07 2017
Foreign tax residents in Cyprus are exempt from taxation on their worldwide dividend and passive interest income. Parliament recently approved a bill granting tax resident status to individuals who spend at least 60 days a year in Cyprus, under certain conditions. Individuals who do not qualify as Cyprus tax residents under the 183-day rule now have the opportunity to consider the 60-day rule, which took effect on January 1 2017.
Cyprus international trusts – an overview
- Cyprus
- July 06 2017
Cyprus international trusts (CITs), also known as Cyprus offshore trusts, are regulated by the International Trusts Law, which complements the Trustees Law. CITs provide multiple benefits – such as anonymity, asset protection, flexibility and taxation incentives and benefits – which high-net-worth individuals around the world can use within the framework of their tax planning and investment strategies.
Cyprus offers tax exemption on worldwide income
- Cyprus
- June 01 2017
In order to provide high-net-worth individuals with additional incentives to relocate to Cyprus or continue conducting their business operations or investments in Cyprus, the government introduced non-domicile rules for the purposes of the Special Defence Contribution Tax Law. As a result, an individual may be resident, but not domiciled, in Cyprus. Tax residents who are not domiciled in Cyprus are exempted from the special defence contribution tax.
