Exploring Offshore Litigation

In Jardine Strategic Limited v Oasis Investment II Master Fund Ltd & Ors the Privy Council (on appeal from Bermuda) held on July 24 that the so-called "Shareholder Rule" should be abrogated. This rule provided that a company could not, in the course of litigation between a company and shareholders, withhold documents from inspection on the basis of legal advice privilege. The Board held that the o...

In a recent Privy Council decision IGCF SPV 21 Limited v Al Jomiah Power Limited and another, the Board ruled on when a party is held to have submitted to the jurisdiction of a foreign Court as a matter of Cayman law. The parties' positions It was common ground between the parties that an applicant will forfeit its right to an injunction if it submits to the Court of a foreign jurisdiction. The Ap...

Harneys successfully secured the appointment of a receiver by way of equitable execution over a Cyprus private company, in order to assist in the execution of a judgment against a villa in Limassol Marina. Facts Our client obtained a Singapore judgment for over USD 124 million plus interest against the defendants. After filing a common law action in Cyprus based on that judgment, the District Cour...

There has been a significant increase in the number of lenders enforcing against secured assets in the BVI, which has entailed an uptick in the appointment of out-of-court receivers. This guide highlights the types of disputes arising out of such appointments. As many offshore companies operate as holding vehicles, security is often granted by way of share mortgage. The BVI Business Companies Act...

In the recent judgment of TAX v FDQ, the BVI Court of Appeal provided guidance on the granting of anti-suit arbitration injunctions and the Court's supervisory jurisdiction over arbitrations commenced in the BVI. Background The applicant/appellant, TAX, and the respondent, FDQ, entered into a license agreement in 2018 and further agreed that any disputes arising out of the agreement would be arbit...

It's a familiar dilemma: a debt remains unpaid under a contract and the creditor wishes to pursue payment of the debt. The contract contains an arbitration agreement requiring disputes to be resolved in arbitration. The debtor disputes liability to pay the debt. The creditor is left to weigh its options - should it seek to wind up the company on the basis of the unpaid debt, or refer the dispute t...

In a landmark decision of the Supreme Court of Bermuda ('Court'), Harneys and the joint provisional liquidators ('JPLs') of a Bermuda company (the 'Company') successfully argued that the Court's power to summon officers of a company in liquidation or provisional liquidation before it for a private examination and delivery up of books and records under the Companies Act, 1981 ('Companies Act') has...

In Cyprus, companies that are struck off the official companies register maintained by the Department of Intellectual Property and Registrar of Companies in Cyprus (the Registerand the Registrar) can be restored, mainly, through two routes: (1) administrative restoration by the Registrar; or (2) Court-ordered restoration. The appropriate route depends primarily on the reason for the strike-off and...

The enforcement toolkit available in the BVI is similar to many other common law jurisdictions. However, the BVI Courts have tailored their approach to meet the challenges a creditor may face when looking to enforce over a complex structure. While it has its own legal system, the BVI is a British Overseas Territory. It is therefore heavily influenced by judicial decisions made in England and Wales...

Harneys successfully opposed a claimant's application seeking the Court's leave to testify via videoconference during civil proceedings, before the District Court of Limassol, due to alleged health issues that prevented the claimant from travelling to Cyprus to testify. The claimant's request was based on section 36A of Evidence Law, Cap 9, which provides that, in criminal or civil proceedings, a...

Fraudsters sometimes choose offshore vehicles in their illegal schemes under the mistaken belief that the misappropriated assets will not be found or that the victims of fraud will not be able to identify the fraudsters. This is completely wrong. The BVI Courts apply a well-known legal maxim originally developed by the English Courts in Lazarus Estates v Beasley [1956] 1 QB 702: "No Court in this...

There continues to be an upward trend in the use of schemes of arrangement, with or without the relevant company being in provisional liquidations, as a restructuring tool, particularly in relation to China-related debt. The Chinese property market continues to suffer significant challenges and points to further use of schemes of arrangement in the jurisdictions of incorporation. There continue to...

In the British Virgin Islands, arbitration is principally regulated by the Arbitration Act 2013 (the Act), which came into force in 2014. The Act is modelled upon the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), subject to a number of local modifications. The Act is supplemented by the BVI IAC Arbitration Rules (the BVI Rules), which were brought into force in 2016....

The enforcement toolkit available in the BVI is similar to many other common law jurisdictions. However, the BVI Courts have tailored their approach to meet the challenges a creditor may face when looking to enforce over a complex structure. While it has its own legal system, the BVI is a British Overseas Territory. It is therefore heavily influenced by judicial decisions made in England and Wales...

In the British Virgin Islands, arbitration is principally regulated by the Arbitration Act 2013 (the Act), which came into force in 2014. The Act is modelled upon the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), subject to a number of local modifications. The Act is supplemented by the BVI IAC Arbitration Rules (the BVI Rules), which were brought into force in 2016....

The Supreme Court of The Bahamas has recently ruled in Gabriele Volpi v Delanson Services Ltd & ors, providing a clear statement on when a court will refuse to halt an arbitration because of a pending challenge to the tribunal. Background The dispute concerned three Bahamian family trusts - the Winter, Spring and Summer Trusts (the Trusts) - which were settled for the benefit of the Volpi family b...

The Cayman Islands Court of Appeal has refused a renewed application for leave to appeal in Frye-Chaikin v Bradley, affirming a Grand Court summary judgment grounded in foreign issue estoppel arising from prior Michigan proceedings. The decision underscores the high threshold for leave to appeal, the potency of foreign issue estoppel, and the litigation risk of attempting to revisit merits argumen...

There is increasing demand in the PRC for obtaining grants from the BVI Probate Court. A grant of probate is typically required in order to validly deal with BVI assets held by a deceased person. In this update, we share some key points from our significant experience in handling probate applications originating from the PRC. The most common probate applications we deal with at Harneys in Shanghai...

In the follow up to their article on recent guidance from the Cayman Islands' courts on fraudulent trading claims, Harneys partner James Eggleton and counsel Anya Allen unpack the UK Supreme Court's decision and its relevance for the Cayman Islands. This is the second article in a two-part series on recent decisions concerning fraudulent trading claims under Section 147 of the Cayman Islands Compa...

Recent guidance on Section 147 fraudulent trading claims in Conway v Air Arabia Harneys partner James Eggleton and counsel Anya Allen in the Cayman Islands examine two recent authorities on fraudulent trading claims in complex cases, from the Grand Court of Cayman Islands in the first instalment of a two-part series and from the UK Supreme Court in the second instalment. There is, perhaps surprisi...

In 2017, Singapore incorporated the UNCITRAL Model Law on Cross-Border Insolvency (the 'Model Law') into its domestic legislation,1 providing a comprehensive and structured framework for the recognition and assistance of foreign corporate insolvency proceedings. By contrast, the offshore jurisdictions of the British Virgin Islands, the Cayman Islands, and Bermuda have not adopted the Model Law. Ea...

Section 36(13) of the Exempted Limited Partnership Act (2021 Revision) ('ELPA') gives the Grand Court of the Cayman Islands the power to override a limited partnership agreement and replace the general partner ('GP') of an exempted limited partnership ('ELP') during its winding up, if necessary for a proper dissolution. Recent cases, notably In the matter of One Thousand & One Voices Africa Fund I...

In a recent decision of the Cayman Islands Grand Court, Justice Asif KC granted leave to serve foreign defendants out of the jurisdiction and extended the validity of a writ to accommodate service under the Hague Convention: Linksure Global Ltd v Infinite Solution Ltd. The plaintiff alleges that three defendants conspired to derail its planned IPO. According to the claim, the defendants sought to...

In the recent decision of RCF VII Sponsor LLC v Blue Gold Ltd, the Cayman Islands Grand Court granted an interim injunction restraining the Defendant company from holding an extraordinary general meeting, demonstrating the Court's flexible approach to injunctions and cross-undertakings where the balance of convenience favours early judicial intervention. The Plaintiffs sold some of their shares in...

Harneys secured a significant recovery of approximately €9 million for our client through garnishee (attachment of debt) proceedings against two major banks in Cyprus. Under Cyprus law, a payment order in garnishee proceedings can be issued when: the claimant is a judgment creditor and can demonstrate that the judgment debt remains unsatisfied; there is a creditor-debtor relationship between the j...