The Court of Appeal has found that the Cayman courts have jurisdiction to grant a Norwich Pharmacal order in support of potential proceedings before a foreign court, even where alternative statutory remedies may be available. The decision confirms a departure in Cayman law from the law in England and Wales, which is perhaps surprising in circumstances where the Norwich Pharmacal jurisdiction itself derives from a decision of the UK House of Lords.
This article outlines the process and grounds upon which an appeal can be made in respect of a civil judgment by the Royal Court. It also mentions recent developments in appealing judgments of the Court of Appeal to the Judicial Committee of the Privy Council.
The Grand Court recently struck out a winding-up petition presented against Grand State Investments Limited by a shareholder claiming a debt on the ground that the alleged debt was disputed on bona fide and substantial grounds. In addition, the court went on to hold that, had the petition not been struck out, it would have been stayed anyway in favour of arbitration.
Previously, it was generally understood that the Cayman approach to claims against companies in liquidation followed the English position on the issue of limitation – that is, the limitation period ceased to run once the company went into liquidation, with some exceptions. However, the Grand Court recently challenged this assumption and reinterpreted the principles from the English authorities on this important point.
The Grand Court recently confirmed and clarified how interest on awards in Section 238 proceedings is to be calculated and how the costs of such proceedings are to be determined. The judgment, which will be welcomed by dissenting shareholders, clarifies that the midpoint approach is the correct methodology for determining the fair rate of interest payable in Section 238 proceedings. However, the precise midpoint will always be fact specific and is likely to be the subject of expert evidence in most cases.
The Royal Court recently considered for the first time the blessing of a momentous decision of a court-appointed representative of minor and unborn beneficiaries of a trust to enter into a settlement agreement in respect of claims against the trust. While the decision to bless the decision of the representative of the minor and unborn beneficiaries was confined to the unusual facts of this case, this decision nonetheless establishes the circumstances (albeit limited) in which the court will bless such a decision.
This article considers a recent Court of Appeal judgment regarding the interpretation of a trust instrument. This case provides helpful clarification of the principles to be applied when interpreting Guernsey law trust instruments. The Court of Appeal also helpfully confirmed that the trustee was absolutely correct in this instance to seek the court's directions.
A recent costs ruling has provided welcome clarity on the circumstances in which the Grand Court will make a costs award on the indemnity basis. A successful party can expect to recover a higher proportion of its costs when an award is made on the indemnity basis (rather than the standard basis) since only costs that are unreasonably incurred or are of an unreasonable amount will be disallowed on taxation and any doubts as to reasonableness are resolved in favour of the successful party.
In Guernsey, there is a relatively quick and easy process for restoring companies to the Register of Companies when they have been struck off and dissolved. Applications can be made by various parties to the Non-contentious Court, which will deal with the matter 'on the papers'. However, if a party is likely to oppose the application to restore, an application should be made to the Ordinary Court and court attendance will be required.
When considering the penalties imposed on directors of Guernsey companies for misconduct or breaches of the Companies (Guernsey) Law 2008, arguably the most serious penalty which can be imposed is a disqualification order. Such an order can, at its highest, be career ending for a director, with the maximum period of disqualification being 15 years. This article examines a recent decision in which the Royal Court imposed a disqualification period of 12 years.
The Royal Court recently imposed a hefty £550,000 fine on a firm for failing to ensure that, in practice, its anti-money laundering (AML) policies and procedures were being applied effectively and consistently. Notably, the Royal Court was not deterred from imposing a fine by the fact that the failings related to only one client structure. Firms must therefore ensure that their AML controls are being applied effectively across their entire business – for, as this judgment shows, the cost of failing to do so can be high.
A notification injunction is an alternative to the conventional freezing order that is available where there is concern that a respondent may deal with their assets so as to frustrate the enforcement of any future judgment. This new breed of quia timet 'notification' injunction is to be welcomed: it represents a further weapon in the Cayman court's arsenal to assist litigants, particularly in fraud and asset tracing cases, to prevent the frustration of judgments.
In a recent case, the Royal Court intervened to set aside a decision of the trustee not to make the spouse of the settlor a beneficiary in her own right. The court's decision has implications for trustees and their obligation to act reasonably despite the trustee setting out reasons for its original decision.
The terms of a trust deed will usually extend the powers conferred on trustees by the Trusts (Guernsey) Law 2007. When deciding to exercise these powers, trustees must consider all of their legal and fiduciary obligations. However, it is not always that simple; at some point a trustee will be faced with a decision so important or complex that it wishes to seek the blessing of the Royal Court. In Guernsey, such applications are known as 'momentous decision' or 'blessing' applications.
The Grand Court has confirmed that shareholders of companies that effect a short-form merger pursuant to Section 233(7) of Part XVI of the Companies Act (2021 Revision) are entitled to be paid the fair value of their shares on dissenting from the merger under Section 238 of the act. The eagerly awaited judgment in Changyou.com clarifies an issue which was previously the subject of extensive debate and provides welcome certainty to minority shareholders of Cayman companies.
The Grand Court recently considered the statutory moratorium against commencing proceedings against a Cayman company in liquidation. The court held that a plaintiff which launches originating proceedings against a company in liquidation, seeking adverse orders against that company, requires leave of the court to bring the proceedings. It also held that the plaintiffs in this case did not have "a case worth entertaining" in respect of either basis on which they had brought their applications.
Civil litigation procedure in Guernsey is governed by the Royal Court Civil Rules 2007. All commercial disputes with a value over £10,000 are heard in the Royal Court; disputes with a lower value are dealt with in the Magistrate's Court. This article outlines the procedure for civil proceedings in Guernsey, which differs depending on whether the defendant is in or outside Guernsey.
A recent court judgment is the latest in a line of Cayman Islands court decisions which have considered the meaning and scope of the Cayman firewall provisions. The Grand Court has now provided important clarification about the effect of Section 90 of the Trusts Act 2020, confirming that it does not operate to bestow exclusive jurisdiction on the Cayman Islands courts (as previous cases have suggested) and that common law principles of forum non conveniens still have relevance and application.
The long-running Carlyle case recently came to an end when the parties reached a non-confidential settlement. The case arose from the March 2008 collapse of Carlyle Capital Corporation Ltd, a Guernsey fund which invested mainly in residential mortgage-backed securities issued by US government-sponsored entities Fannie Mae and Freddie Mac. The case is of particular relevance now during the COVID-19 pandemic, which will likely lead to more fund collapses.
Unlike in England, pre-trial disclosure against a third party is generally not available in Guernsey. However, there are exceptions to this rule. This article sets out the main exceptions – namely, claims for personal injury or in respect of a person's death, ancillary orders to freezing injunctions, Anton Piller orders, Norwich Pharmacal orders and Bankers Trust orders.