Exploring Offshore Litigation

In the recent English High Court decision in Wilden v Person Unknown, DHCJ Guy Vassall-Adams KC continued a proprietary and worldwide freezing order against an unknown cryptocurrency fraudster, reaffirming that crypto assets are property to which rights can attach and that exchanges which refuse to cooperate with fraud victims risk adverse costs orders. The Court also granted a Bankers' Trust disclosure order against the cryptocurrency exchange, HTX, on which the assets were held. While Harneys does not advise on the law of England and Wales, this judgment may be considered in other common law jurisdictions such as the BVI, Cayman Islands, Bermuda and Cyprus, where freezing injunctions and disclosure orders in crypto-fraud cases are increasingly common. Mr Wilden, a German businessman, was the victim of a targeted cryptocurrency fraud. A person unknown, using the alias "Brian Smith", contacted Mr Wilden about Bitcoin he considered lost following the closure of the EuropeFX platform. Smith claimed to be a UK-based investment adviser working for a company called LedgerLock, which he said was working with EuropeFX to recover lost Bitcoin and transfer it to new wallets. The person unknown demonstrated detailed knowledge of Mr Wilden's EuropeFX transactions, including specific dates of purchase, account balances, trades, credits and withdrawals. Mr Wilden's forensic investigators subsequently concluded that this information may have been obtained from publicly available blockchain data or purchased databases. Believing the person unknown to be legitimate, Mr Wilden was persuaded to make a series of Bitcoin payments said to be necessary to satisfy technical and regulatory requirements. Between December 2025 and January 2026, Mr Wilden paid approximately EUR 2.5 million, converted into 32.46 BTC. Person unknown transferred a small amount back before locking Mr Wilden out of the LedgerLock platform and ceasing all contact. Forensic investigators traced the funds to the HTX exchange (owned by Huobi Global SA, a company incorporated in Panama). The judge noted that HTX was on the FCA Warning List for operating in the UK without proper authorisation and is the subject of FCA enforcement proceedings for communicating financial promotions contrary to s21 of the Financial Services and Markets Act 2000. The judge held that HTX responded to Mr Wilden's lawyers in a dismissive and formulaic manner, recommending Mr Wilden contact the police. The judge characterised HTX as "unwilling properly to engage with a legitimate request for the return of stolen cryptocurrency and is thereby providing a safe haven for the proceeds of crime". The applicant for a freezing injunction must persuade the Court that: the claimant has a good arguable case on the merits against the defendant; there is a real risk that a judgment or award will go unsatisfied by reason of the unjustified disposal by the defendant of his assets; and it is just and appropriate for the Court to grant the injunction. The Court did not separately assess the requirements for a proprietary injunction although as is well known such injunctions are governed on a justice and convenience test usually applying the American Cyanamid guidelines and do not require risk of dissipation to be proved. England and Wales, like the BVI, treats crypto assets as property to which rights can attach. The judge was satisfied on the basis of Mr Wilden's expert report that the identity of the crypto assets had been preserved. Importantly, following the principle established in D'Aloia v Persons Unknown, it was held that not only the remedy of tracing but also the remedy of following is available where the identity of the crypto asset is preserved despite mixing – a significant point for practitioners. It was held to be self-evident that there was a risk of dissipation, as Mr Wilden's expert evidence showed that person unknown had already attempted to dissipate the funds through "pooling transactions" in whic...

The consequences of getting it wrong are severe yet the legislation often leaves practitioners without clear answers to commercially significant questions. The recent English High Court decision in Denali Corp – FZCO v Manson considers one of those unanswered questions: when a designated person holds contractual rights whose value is uncertain, do those rights constitute "funds" or an "economic resource" under the UK sanctions regime? The distinction is not academic. It determines the scope of the asset freeze, the range of conduct that could amount to a criminal offence, and as the liquidators in this case discovered, whether administrative acts such as consenting to an assignment can lawfully proceed at all. In Denali Corp, the court had to determine whether the liquidators of Petropavlovsk plc (Petro) could consent to the assignment of contractual rights from Atlas JSC, a designated person, to Denali Corp-FZCO without breaching the UK sanctions regime under the Sanctions and Anti-Money Laundering Act 2018 (SAMLA) and the Russia (Sanctions) (EU Exit) Regulations 2019. The case turned on a seemingly simple question. Were the contractual rights being assigned a "fund" within the meaning of section 60(1) of SAMLA, or an "economic resource" under section 60(2)? The distinction was important with far-reaching implications. Under Regulation 11(4), "dealing with" funds is defined broadly and captures any use, alteration, transfer, or change in ownership, possession, or character. By contrast, "dealing with" an economic resource under Regulation 11(5) is defined more narrowly and is limited to exchanging the resource for funds, goods, or services, or using it in exchange by way of pledge or otherwise. In practical terms, if the contractual rights were classified as an economic resource rather than a fund, then the range of conduct that could give rise to a sanctions breach was significantly reduced. In considering the issue, the court built on the framework established by the English Court of Appeal in PJSC National Bank Trust v Mints, where it was held that a claim or cause of action was not a fund but rather an economic resource. The key distinguishing factor in Mints was uncertainty. The items listed in the statutory definition of "funds" share a common feature of having an intrinsic financial value, typically for a liquidated or definite sum. A claim for damages, being inherently uncertain in outcome, did not fit that mould. HHJ Johns KC applied the same reasoning to the contractual rights. The rights arose under a share sale deed entered into between Petro and Atlas and specifically related to, with the liquidators' consent, the rights to receive liquidation surplus proceeds, residual amounts from a US$20 million administration fund, and a US$6 million contingency fund. The court found that the rights being assigned were, in practice, a right to prove in the liquidation for what was an uncertain sum dependent on the outcome of asset realisations, the level of claims and ongoing costs and expenses of the liquidation. The court acknowledged that while the rights were probably closer to the border between a fund and an economic resource, the uncertainty inherent in the rights was sufficient to bring them within the definition of "economic resource" under section 60(2) of SAMLA. Having classified the rights as an economic resource, the court concluded that the liquidators' consent to the assignment did not constitute "dealing with" those resources. The consent required did not involve any exchange of the rights for funds, nor any use of them by the liquidators in exchange for funds. Importantly for insolvency practitioners, the court held that the words "deals with" were simply not apt to describe the administrative act of giving consent to an assignment between two other parties. Although Denali Corp is an English decision, the court's reasoning will be highly persuasive to the courts, and instructive to insolvency practitioner...

The recent judgment in China Export & Credit Insurance Corporation v Hyalroute Communication Group Limited (No.3) sets out the costs consequences of a dismissed winding-up petition based on a bona fide dispute. It also clarifies the scope of GCR O62, r18, which governs recovery of foreign lawyers' fees, a point Justice Asif described as "of general application within the Cayman Islands". China Export & Credit Insurance Corporation (the Petitioner) petitioned to wind up Hyalroute Communication Group Limited (the Respondent) to recover approximately US$26 million. The Petitioner claimed to be subrogated to guarantees given by the Respondent over its subsidiary's PRC-law loan facilities with China Development Bank. It had indemnified the bank under its insurance policies prior to bringing that claim. The Respondent successfully resisted the petition on the ground that the debt was bona fide disputed on substantial grounds, and the petition was dismissed in May 2026. The costs decision addressed three issues: 1. whether costs should follow the event or whether exceptional circumstances justified no order; 2. the proper treatment of fees incurred by PRC lawyers who had not been temporarily admitted in the Cayman Islands; and 3. whether the Respondent was entitled to interest on its costs. The Respondent's position was that costs should follow the event under GCR O62, r4, relying on the English case of Re Fernforest and the Cayman Islands Court of Appeal's decision in Aramid Entertainment Fund Ltd v KBC Investments Ltd. The Respondent argued that a contrary result would undermine the deterrent effect of the costs regime and encourage unmeritorious petitions. The Petitioner argued this was an exceptional case warranting no order for costs, relying on the English case of In Re Sykes & Sons Ltd. In doing so, it maintained that it had acted reasonably throughout and argued that the principle derived from Re Fernforest Ltd presupposes that the Respondent's dispute had been articulated to the Petitioner, but that Petitioner elected to pursue the petition in any event. Justice Asif rejected the Petitioner's submissions and ordered costs to follow the event. In considering Re Fernforest, Justice Asif held that the Petitioner's reading was "directly contradicted" by the passages he had set out from that case and the Court of Appeal's explanation of them in Re Aramid. The company in Re Fernforest had not detailed its defence until after the petition was presented, yet Mr Justice Warner still ordered costs against the petitioner, stating that it is "no part of the duty" of a respondent to formulate its defence in advance". On reasonableness, Justice Asif held that whether the Petitioner had behaved reasonably in filing and pursuing the petition was "irrelevant to the question of costs". This followed the principle established by Mr Justice Warner in Re Fernforest – and confirmed by the Court of Appeal's confirmation in Re Aramid – that, save in an exceptional case, a petitioner in a known disputed-debt case presents his petition "at his own risk". The Court also held that the facts did not come "anywhere close" to the circumstances in Re Sykes, where the debtor company had produced documents of questionable authenticity and made untruthful statements about its liability. The conclusion from these findings is that a winding-up petition is not a debt-collection shortcut and treating it as one carries real costs risks. Neither the Petitioner's reasonableness nor the Respondent's failure to formulate its defence before the petition was filed will displace the ordinary costs rule. GCR O62, r18(1) allows work done by foreign lawyers to be recovered on taxation on the standard basis, but only if the foreign lawyer has been temporarily admitted in the Cayman Islands. The Court of Appeal recently confirmed in Al Jomaih Power Limited v IGCF SPV 21 Limited that there is no power to grant a dispensation from r18, closing off the route taken at first in...

Boards of offshore companies often have to make difficult commercial decisions where the contractual consequences are not clear-cut. This can be particularly challenging in structures involving SPVs, holding companies and joint venture vehicles, where contractual obligations may sit with one entity while decisions are taken within a wider group. If a decision later gives rise to a breach of contract claim, can the directors who approved it also be pursued personally? For boards and in-house counsel, that question matters. If recovery against the contracting entity becomes difficult, a claimant may look beyond the company and examine the conduct of the individuals involved. The principle in Said v Butt, recently applied in IBM United Kingdom Ltd v LZLABS GmbH [2025] EWHC 532 (TCC) is that a director or other agent who causes a company to breach its contract will not ordinarily be personally liable for inducing that breach, provided they were acting bona fide in the course of their duties and within the scope of their authority. In IBM, the Court summarised the rule as: quote start The effect of the rule in Said v Butt is that a director of a company who caused his company to act in breach of contract cannot be found to have committed the tort of inducing a breach of a contract to which the company is party, provided that the director acted bona fide in the course of his duties as a director. The Court went on to explain that the good faith enquiry is concerned with the proper performance of the director's duties and functions. The UK Supreme Court also considered the principle in Lifestyle Equities CV v Ahmed [2024] UKSC 17. The Court emphasised that the normal position is that, where an agent causes its principal to break a contract, liability rests with the principal rather than the agent. If a contracting party wants direct recourse against the other party's agent, "it must ordinarily bargain for it". The use of an SPV, holding company or other ring-fenced entity does not, without more, make its directors guarantors of the company's contractual liabilities. However, Said v Butt is not a general immunity from personal liability. As Lifestyle Equities makes clear, the principle is concerned with procuring a company's breach of contract. It does not protect a director from liability for an independent tort which they personally commit or participate in. The limits of the principle were considered in Antuzis v DJ Houghton Catching Services Ltd [2019] EWHC 843 (QB). The Court made clear that the focus of the bona fide enquiry is the director's conduct towards the company, rather than towards the contractual counterparty. The directors in Antuzis had procured systematic breaches of workers' contractual and statutory rights. Their conduct could not properly be characterised as bona fide conduct in the company's interests, and they were held personally liable. The BVI statutory position starts from a similar premise. Section 30 of the BVI Business Companies Act, Revised Edition 2020 provides that a director is not personally liable for the company's debts, obligations or defaults merely because they hold office, although liability may arise from the director's own conduct or under specific statutory provisions. Those duties include acting honestly, in good faith and for a proper purpose, and exercising the required standard of care, diligence and skill. In group structures, directors should also be clear about the particular company whose interests they are considering. A decision that appears sensible at group level will not necessarily be appropriate for the individual contracting entity. Where a company is in financial difficulty, directors also need to keep creditor interests in mind. Separate insolvency-related liabilities, including misfeasance and insolvent trading, may also come into play. Falling within the Said v Butt principle does not, however, resolve every question of personal liability. Separate exposure may arise ...

The British Virgin Islands (BVI) offers two principal routes for enforcing foreign judgments: (A) statutory registration under the Reciprocal Enforcement of Judgments Act 1922; and (B) common law enforcement by fresh action, each backed by a robust suite of interim remedies and post-judgment enforcement tools that make the jurisdiction a critical venue for cross-border creditors. The right route depends mainly on the jurisdiction of origin, the status of the judgment and the assets available in or through the BVI. Early classification is critical. A creditor should identify the judgment's originating jurisdiction, confirm that the judgment is final and map the debtor's BVI assets before choosing the procedure. That avoids avoidable delay and preserves the option of seeking protective relief before the debtor can move or restructure assets. Registration is available for judgments from scheduled territories. The territories are England and Wales, Northern Ireland, Scotland, the Bahamas, Barbados, Bermuda, Belize, Trinidad and Tobago, Guyana, St Lucia, St Vincent, Grenada, Jamaica, New South Wales and Nigeria. This route is usually more direct because the creditor does not need to start a new claim on the underlying debt. An application must be made within 12 months of the date of the judgment unless the BVI Court allows a longer period. The application proceeds under Eastern Caribbean Supreme Court Civil Procedure Rules (Revised Edition) 2023 (EC CPR) Part 74 and should be supported by affidavit evidence and a verified or certified copy of the judgment. The judgment must be final and must order payment of a definite sum. The BVI Court must also consider it just and convenient to enforce the judgment. For statutory registration, the debtor must not be appealing or have the right and intention to appeal. A pending appeal can therefore justify opposition or an application to set aside statutory registration. The BVI Court will not use enforcement proceedings to conduct a general review of the foreign decision, but it will examine whether local enforcement requirements are met. Before filing, the creditor should: Confirm the judgment is final and enforceable in the originating jurisdiction. Check whether any appeal is pending or intended and obtain evidence of the position. Evidence the foreign court's jurisdiction, service and amount outstanding. Arrange a certified English translation where the judgment is not in English. Once registered, the judgment can be enforced as if it were a BVI judgment. Registration is not the end of the process. The order must be served and the debtor may apply to set it aside. A pending appeal can prevent registration and enforcement, so the creditor should obtain clear evidence of whether an appeal has been filed or is intended. For a judgment from a non-scheduled jurisdiction, the creditor normally starts a fresh BVI proceeding to enforce the foreign judgment as a debt. The claim is not a re-trial. It relies on the foreign judgment as the source of the obligation and seeks a BVI judgment that can then be executed against local assets. The creditor must show that the judgment is final and conclusive, is in personam and is for a definite sum. It must also show that the foreign court had jurisdiction under principles recognised by the BVI Court. The usual gateways are submission to the foreign court's jurisdiction or residence or business in that jurisdiction together with due service. Those issues should be addressed directly in the evidence: Finality: Confirm the judgment is not subject to further decision or an unresolved appeal. Personal liability: Show that the judgment binds the debtor personally rather than operating only in rem. Jurisdiction and service: Exhibit the jurisdiction clause, evidence of submission or presence and proof of service. Where the evidence is clear, the creditor can seek summary judgment rather than proceed to a full trial. The BVI Court focuses on the recognised require...

The UK Supreme Court has recently delivered judgment in Skatteforvaltningen v MCML Ltd which has helped focus the parameters of estoppel, together with previous landmark decisions, such as Tinkler v HMRC estoppel by convention (Harneys' article on Tinkler can be viewed here), and Guest v Guest, regarding proprietary estoppel (Harneys' article on Guest can be viewed here). In this article, we analyse the key decisions and consider what they mean for practitioners in the BVI and other offshore jurisdictions. Estoppel is a term used to refer to a collection of legal doctrines, all of which are underpinned by the concepts of equity, unconscionability and the prevention of injustice. The most common estoppels are as follows: Issue estoppel prevents a party from re-litigating an issue of fact or law that has been finally determined in earlier proceedings between the same parties. It promotes finality and efficiency. Estoppel by convention prevents a party from resiling from a common assumption of fact or law on which both parties have conducted their dealings, where it would be unconscionable to permit departure from that assumption. Proprietary estoppel arises where a person has been given an assurance regarding rights in property, has relied on that assurance to their detriment, and it would be unconscionable not to give effect to the expectation created. Estoppel by representation operates to protect against a departure from an assertion of fact or law intending it to be relied on and which was relied on by the other party to their detriment. Whilst issue estoppel can have a 'very powerful effect', the Supreme Court has recently confirmed that it is a narrow doctrine, which has a different role than the abuse of process doctrine (see the rule in Henderson v Henderson). Any unfairness created by a party failing to put some point in issue, when they could have, will be addressed by the Henderson rule. In Skatteforvaltningen, the Supreme Court considered whether SKAT, the Danish Customs and Tax Administration, could bring a fraud claim after an earlier claim for negligent misrepresentation had been brought, and dismissed, against the same financial brokerage business. The Court of Appeal treated the earlier decision as creating an issue estoppel; whereas the Supreme Court disagreed and unanimously allowed the appeal. The case gave the Supreme Court the opportunity to consider issue estoppel in more detail and the court concluded that when carrying out an estoppel analysis, the question to ask is whether the issue was necessary and fundamental to the prior decision; with the pleadings being a critical consideration during this analysis. The court found that the factual and legal bases of the fraud claim were not traversable to the negligent misrepresentation claim. As a result of the court's findings, it was unnecessary for the court to look at ground 1 of the appeal which argued that an issue estoppel could arise from a prior court's formulation of a legal principle or articulation of legal reasoning. From the perspective of a claimant, the case confirms that they can bring a new claim if it arises out of new or different legal or factual circumstances. Defendants will have to grapple with the fact that issue estoppel will only intervene in narrow circumstances where the issue decided in the prior proceedings were necessary and fundamental to the decision; and 'whether an issue arose on the parties' pleadings in the prior civil proceedings is critical in deciding whether its determination was necessary and fundamental'. The message to commercial litigators from this case is clear: ensure your pleadings are precise and properly framed from the outset of the litigation. For offshore practitioners, particularly in fraud and asset-recovery litigation involving overlapping parties or successive causes of action, Skatteforvaltningen is a warning against treating a previous dismissal as a general answer to a subsequent case pleaded diff...

The recent decision of the Grand Court of the Cayman Islands in In the Matter of Logan Group Company Limited provides a useful reminder of the principles governing the sanctioning of schemes of arrangement under section 86 of the Cayman Islands' Companies Act. The Court's clear articulation of the hurdles a company must overcome, together with clarification of the Court's approach to exercising its discretion at a sanction hearing, will serve as useful practical guidance to insolvency practitioners advising distressed companies in relation to a proposed scheme, particularly those with complex cross-border debt structures. Logan Group Company Limited, a company incorporated in the Cayman Islands, sought the court's sanction of a proposed scheme of arrangement in parallel with a related inter-conditional scheme in Hong Kong. A convening hearing took place in May 2026 and the sanction hearing took place on 4 August before Justice Doyle. Drawing on well-established jurisprudence in relation to the requirements of a successful scheme of arrangement, Justice Doyle sanctioned the scheme, applying an "8 hurdle" framework as set out below. In his judgment, Justice Doyle set out the principles the court will apply in determining whether to sanction a scheme, citing Cayman Islands, Hong Kong and English authority. He confirmed that the following eight main hurdles must be cleared in order to satisfy the court that it is appropriate to sanction a scheme: 1. Compliance with the convening order - has the company complied with the terms of the convening order? 2. Statutory majority - has the requisite 75 per cent statutory majority been achieved? 3. Fair and adequate representation - was the class of scheme creditors fairly and adequately represented by those who attended the scheme meeting? 4. No coercion of the minority - was the statutory majority acting bona fide and not coercing the minority in order to promote interests adverse to those of the class whom they purported to represent? 5. Permissible purpose and limited rationality - is the scheme for a permissible purpose that is fair and one which an intelligent and honest person, being a member of the class concerned and acting in respect of their interest, might reasonably approve (the "limited rationality test")? 6. No blot or defect - is there any blot or defect in the scheme which would warrant the court refusing to sanction it? 7. International effectiveness - in the case of a scheme with an international element, would the court be acting in vain if it sanctioned the scheme? This involves consideration of whether the scheme will be recognised and given effect in other jurisdictions. 8. Residual discretion - as a matter of residual discretion, is there any reason the court should refuse to sanction the scheme? The following practical considerations also emerge from the judgment: 1. Deference to commercial judgment - The Court reiterated that it does not impose its own view of the commercial merits of a proposed scheme because members or creditors are generally much better judges of their own interests than the court (reiterating Lord Justice Snowdon's comments in Re AGPS Bondco plc and Justice Smellie's comments in Re SPhinX Group of Companies). The Court emphasised that its role at the sanction stage is not to pass its own subjective judgment on the merits of a scheme but to ensure the jurisdictional requirements are met and that no unfairness taints the process. 2. Sufficiency of explanatory material - The Court remarked on the need for sufficient explanatory statements, the objective of which is to provide sophisticated creditors with sufficient information to assess the scheme and identify any further information they consider necessary to decide whether or not to support it. 3. International effectiveness - on the international dimension, Justice Doyle drew on the remarks of Mr Justice Harris in the Hong Kong courts namely that: "the guiding principle is that the Court sho...

The court upheld the first instance judge's key findings against two former directors but narrowed the company's recovery. It separated the client money shortfall caused by the wrongdoing from losses generated by ordinary trading. The decision also gives a practical reading of the landmark UK Supreme Court decision in BTI 2014 v Sequana regarding "creditor duty" and claims about insolvent or loss-making companies. In 2017, Next Generation bought 58 per cent of AFL Insurance Brokers. Before the sale, the Finches were directors of AFL. They had used client money to fund business expenses and concealed trading losses through false accounting. The High Court found fraudulent misrepresentation, dishonest breach of warranty, breaches of duties owed to AFL and unlawful means conspiracy. Those findings were not reopened on this appeal, which was limited to one question: whether AFL's trading losses were legally caused by the Finches' breaches and unlawful acts. The Court of Appeal allowed the appeal in part. It focused on the scope of the duties that had been breached and on the distinction between a factual opportunity to incur a loss and a legal cause of loss. The fraud explained why AFL's financial position was hidden. It did not, without more, explain why the business later made losses. AFL's trading performance remained a commercial question, not a loss automatically attributable to the fraud. Losses arising from AFL's ordinary operations, including the post-acquisition losses, were not shown to be caused by the Finches' misconduct. That conclusion was reinforced by the fact that when new management took over, further capital was injected and AFL at times traded profitably before the business was wound down. The fraud may have given AFL an opportunity to keep trading, but an opportunity was not the same as a cause. The Court of Appeal held that the law was clear that it does not generally impose upon directors a duty to ensure that their company does not trade while insolvent or at a loss, a conclusion also reached in Sequana. Sequana concerned when directors must take account of creditors' interests as a company approaches insolvency. It confirmed that this is a modification of the directors' duty to the company, rather than a separate duty owed directly to creditors. The modified duty is engaged when the company is insolvent, or when insolvency is imminent (with creditor interests being paramount when an insolvent liquidation or insolvent administration is inevitable). A remote risk of future insolvency is not enough. In this case, the court found that the Finches did not breach their duty to give appropriate considerations to the interests of AFL's creditors in the sense discussed in Sequana; indeed, the essence of the fraud was that the Finches ensured AFL's trade creditors were paid albeit using money belonging to its clients. This case serves as a useful reminder that directors who misuse entrusted money remain liable to restore it, but they are not insurers of the company's commercial performance. The law does not impose on directors a duty to ensure that their company does not trade while insolvent or at a loss. In a breach-of-duty claim, the loss must flow directly from the specific breach. It is not enough to show that the business would have ceased but for the wrongdoing and trading losses arising from the company's ordinary operations are not automatically attributable to misconduct. While Harneys does not practise the law of England and Wales, the decision will be of general interest to practitioners in the BVI and Cayman Islands, where liquidators bringing claims against directors will need to identify the specific duty that was breached and demonstrate that the loss claimed was a direct consequence of that breach, rather than simply showing that the company continued to trade while insolvency was a possibility.

In a recent decision of the English Commercial court, GLAS SAS (London Branch), as trustee of €250 million in tradeable bonds, succeeded in claims against a BVI-incorporated company and related parties for the misappropriation of shares worth approximately €85 million. The judgment is a comprehensive illustration of how English courts deploy section 423 of the Insolvency Act 1986 extraterritorially, and of the tort of unlawful means conspiracy, where assets are stripped through offshore vehicles. GLAS was the trustee of English law bonds with a principal value of €250 million issued by European Topsoho (ETS), a Luxembourg company and indirect subsidiary of the Shandong Ruyi Group, a major Chinese industrial conglomerate. ETS owned approximately 53% of the shares in SMCP, a French fashion company. Some shares were pledged to GLAS as security; the remainder (the Unpledged Shares) had a value of approximately €85 million in October 2021. GLAS's case was that Ms Qiu, a senior Ruyi Group executive and A Manager of ETS, procured the transfer of the Unpledged Shares to Dynamic Treasure Group Limited, a BVI company she personally controlled, under a purported share sale agreement for €1. Dynamic then converted the shares to bearer form and transferred them to its account with JP Morgan in Singapore. ETS was subsequently declared bankrupt in Luxembourg. Its court-appointed bankruptcy administrator investigated the transaction independently and reached similar conclusions to GLAS: the transfer was not a genuine commercial arrangement. The defendants were debarred from defending the claims by reason of persistent non-compliance with court orders, including failures of disclosure across proceedings in England and Singapore. Although debarred, GLAS accepted it had to prove its case on the balance of probabilities. Governing law. The court held that English law governed both the section 423 claim (as the law of the forum) and the economic torts (under Article 4 of Rome II). The damage occurred in England because GLAS was entitled to call for payment in England under the Trust Deed, and the bonds and trust deed were governed by English law. The court dismissed Xinbo's contention that PRC law applied. The 2018 Agreement. The court concluded that a purported 2018 pledge agreement (under which Xinbo claimed security over all SMCP Shares) was not genuine and had been created after the event and backdated. Among the numerous difficulties: no contemporaneous documents existed; the B Managers had no knowledge of it; ETS's own managers certified in 2021 that no security existed over the shares other than the bond security; and the arrangement was commercially implausible given the shares were worth €960 million at the purported date versus Shandong Ruyi's supposed debt of €177 million. The SSA and the Disposal. The purported share sale agreement was held to be invalid. There was evidence that Grandall, Dynamic's corporate director, did not sign the SSA. The transfer lacked the required consent of Sino Power under ETS's Articles, no B Manager co-signed as required, and the €1 consideration was plainly a transaction at a substantial undervalue. The Beihai Award. A Chinese arbitration award relied upon by the defendants was dismissed as collusive. The arbitral process took place between parties under common control who agreed all substantial points without argument. Xinbo's attempts to enforce it had been dismissed in Singapore and it had abandoned English recognition proceedings. Section 423 relief. The court granted relief under section 423, holding that the Disposal was a transaction at an undervalue entered into for the purpose of putting assets beyond the reach of GLAS and the bondholders. The court confirmed that section 423 contains no territorial limit and exercised its discretion given the substantial connection with England: the bonds, trust deed, and enforcement mechanisms were all English law instruments. Unlawful means conspiracy. The c...

In Smithers and another v Persons Unknown Category 1 and others, the English Commercial Court granted summary judgment in favour of two victims of a crypto asset fraud, ordering the return of Bitcoin and awarding compensatory damages for fungible tokens. The decision, handed down by Mr Justice Bright, offers an insight into the practical realities of crypto asset recovery. The two claimants, Ms Nancy Smithers, a Canadian national, and Ms Angelina Usanova, a Maltese national, were induced to invest the equivalent of approximately £10.5 million with what they believed to be a genuine cryptoasset trading platform operating under the name "Raliplen" and later "Servelius". In May 2025, Ms Smithers was contacted by a man who claimed to be an expert trader and persuaded her to open an account and transfer both fiat currency and cryptoassets over a period of months to Servelius for trading. Ms Smithers introduced Ms Usanova to the fraudster, and Ms Usanova likewise transferred cryptoassets to Servelius. By October 2025, the fraudsters, known only by aliases, had removed all the cryptoassets from the accounts and disappeared. Specialist investigators were able to trace the stolen assets to exchange deposit addresses and final destination private addresses. In some cases, the individuals behind those addresses could be identified; in most, they could not. The claimants brought proceedings against "persons unknown" and effected service by transferring either a non-fungible token containing a link to the proceedings, or an OP_RETURN message, directly to the relevant receiving addresses. Our previous article Jurisdictional issues in crypto currency disputes (Part 2): service on "persons unknown" and service by alternative means identified authorities, including D'Aloia and Osborne, which recognised NFT airdrop as a legitimate mode of service. Smithers confirms that this technique is now firmly embedded in mainstream Commercial Court practice and not merely a novel workaround. The court accepted expert evidence that Bitcoin transaction outputs do not commingle into a single homogenous balance. Each unspent output remains discrete and uniquely identifiable until it is spent. In this sense Bitcoin differs from many other types of commonly traded cryptocurrencies which are fungible. The fact that the Bitcoin that was misappropriated by way of the fraud could be identified as the very same property in the receiving wallets meant that the victims were able to follow their proprietary interest into that particular property and it was ultimately ordered to be returned in specie. By contrast, the court found that USD Coin and Ethereum, being fungible, had lost their identity upon transfer to and receipt by the receiving addresses, such that it was not possible to identify precisely the same assets as were taken from the claimants. The claimants therefore elected a compensatory remedy in fiat for those tokens, rather than pursuing a proprietary restitutionary claim. This distinction is instructional for practitioners structuring proprietary injunctions and tracing claims, and echoes the tracing and constructive trust principles discussed in the first article in Harneys' cryptocurrency publication series: Jurisdictional issues in crypto currency disputes (Part 1): service out of the jurisdiction. With no defendants appearing, the court proceeded on the R v Jones line of authority and granted summary judgment for deceit against the receiving defendants, together with indemnity costs of £230,000. The underlying asset-tracing exercise in Smithers, which identified exchange deposit addresses and the individuals who ultimately control them, is a good example of the investigative groundwork that will often need to be undertaken before pursuing legal action, such as Norwich Pharmacal and Bankers Trust applications against exchanges in the Cayman Islands and BVI, as explained in our article: Identifying wrongdoers in the crypto space: the Norwich Pharmaca...

A handwritten note, a single sentence long, with no witness, no signature block, and no mention of how property should be divided. Can such a document constitute a valid declaration of trust? The Guernsey Court of Appeal has confirmed that it can. In Ashdown v Fraser, the Court of Appeal dismissed an appeal against a Royal Court decision upholding the validity of a handwritten document by which a settlor declared the shares in a family company to be held for two trusts, without specifying the proportions in which each trust was to benefit. The decision offers useful clarification on the doctrine of certainty of subject matter, as well as guidance on how informal trust instruments ought to be construed, and how the venerable equitable maxim that equality is equity continues to do meaningful work in modern trust litigation. Victor Ashdown (the Settlor) was a successful businessman who held the entire issued share capital of Sylvan Holdings Limited, comprising 100 shares. He had two children, Mark and Jane. During his lifetime he established a number of professionally drafted family trusts, including the Victor Ashdown Trust for Mark (established in 1989) and the Victor Ashdown Guernsey Settlement for Jane (established in March 1994). On 9 August 1994, the Settlor wrote the following by hand: "TO WHOM IT MAY CONCERN THE SHARES IN SYLVAN HOLDINGS LTD ARE NOW TO BE HELD IN MARKS AND JANES TRUST [sic]" (the 1994 Document). A contemporaneous trustees' meeting minute recorded the settlement of shares into trust on the same date, though the minute did not itself identify which trust or trusts were intended nor any proportionate division between them. The Settlor never transferred legal title to the shares. In 2015, he executed a stock transfer form transferring them into Mark's name. The 1994 Document was not discovered until April 2022, shortly before the Settlor's death. What followed was a dispute between Mark (executor and personal beneficiary of Mark's Trust) and Jane (supported by the trustees of Jane's Trust) as to the effect, if any, of the 1994 Document. Mark (the Appellant) argued that the document was not a valid declaration of trust; at best it was an aide-mémoire or statement of future intention. In the alternative, he argued that it was void for uncertainty of subject matter: the document said nothing about how the shares were to be divided between the two trusts, and that silence was fatal. Jane (the First Respondent) resisted, contending that the 1994 Document constituted a valid declaration of trust over all 100 Sylvan shares in favour of both trusts, in equal proportions. At first instance in the Royal Court, the Deputy Bailiff at first instance upheld the declaration, finding that a "reasonable person would infer" equal division. The Royal Court granted leave to appeal on three grounds: the methodology used (the "reasonable person" formulation); certainty of subject matter; and the construction of the 1994 Document as a present declaration for two trusts in equal shares. The Court of Appeal dismissed the appeal on all three grounds. The Court rejected the argument that the 1994 Document was merely a note to self or a statement of possible future intention. The critical words, "ARE NOW TO BE HELD", were found to be strongly indicative of present intention, not aspiration. Relying on the Privy Council's decision in Choithram (T) International SA v Pagarini, the Court emphasised that informality does not negate legal effect where the intention to declare a trust is sufficiently clear: equity "will not strive officiously to defeat a gift." The contemporaneous trustees' minute further reinforced the conclusion that the Settlor intended a present settlement. The Court also dealt squarely with the argument that the Settlor's subsequent conduct, including his failure to act on the document and his later transfer of the shares to Mark in 2015, undermined the declaration. It held that this was of "questionable relevance, an...

The English High Court has held that a Djiboutian container terminal operator (DCT) held over US$41 million in shipping profits on trust for the Republic of Djibouti (the Republic) in bank accounts in London[FG1.1]. This finding enabled a contractor (Soprim) with unsatisfied arbitral awards against the Republic to obtain a charging order in respect of the entire sum, despite the fact that Soprim had no judgment against DCT directly. Djibouti occupies a strategic position at the entrance to the Red Sea and the Gulf of Aden, astride one of the world's busiest shipping lanes. The Doraleh Container Terminal was constructed to capture revenue from that traffic pursuant to a 2006 concession agreement governed by English law. Soprim, a construction sub-contractor closely involved in the terminal's construction, fell into dispute with the Djiboutian government after its general manager declined to support the president's bid for a third term. An arbitral tribunal subsequently found in Soprim's favour, that the Republic had waged a campaign of "persecution" against Soprim, awarding it US$56 million for the destruction of its business in May 2018, together with a further c.US$28 million in interest and costs in July 2018. None of those awards were satisfied. The Republic had moved against the terminal itself, seizing it, expelling staff, and transferring its assets by decree. It subsequently procured the appointment, by Djiboutian courts, of an administrator and then a liquidator, both closely aligned with the government, in each instance without notice to the other shareholder. Meanwhile, the terminal's profits of c.US$41.6 million held across six accounts at Standard Chartered Bank in London remained frozen pursuant to a 2017 worldwide freezing order obtained by Soprim after it learned that the funds might be diverted to the Republic. Soprim subsequently sought a charging order, contending that DCT secretly held those accounts on trust for the Republic. The central issue was whether the administrator or liquidator had agreed, on the company's behalf, to hold the funds on trust for the Republic. Soprim submitted that such an agreement should be inferred from the Republic's control; the objecting parties maintained that no evidence of any such arrangement existed. Lacking direct proof, Soprim relied on circumstantial evidence and invited the court to infer an agreement, adopting the approach to drawing inferences endorsed in the English case of Invest Bank v El-Husseini . English law permits a trust to be inferred from conduct alone: as the English Court of Appeal held in Paul v Constance, a trust may arise from words or conduct even where the parties are unfamiliar with the underlying legal concept, and need not be formally declared. The judge found the inference compelling, citing the president's demonstrated total control over the Djiboutian state, the administrator's pattern of favouring the Republic over the company they were appointed to serve (echoing the reasoning in Kazakhstan Kagazy v Zhunus that true ownership may be inferred where a person exercises control over assets ostensibly owned by another) and the fact that the accounts had consistently been used to channel profits toward the Republic. No witness for the Republic gave evidence to rebut the arrangement, notwithstanding the opportunity to do so, and the judge treated that silence as significant. He rejected the argument, drawn from Williams v Central Bank of Nigeria, that merely acting on presidential instruction could not amount to an intention to create a trust, reasoning instead that the president's wish for the arrangement was itself evidence of the requisite intention. The trust was accordingly established. The court granted Soprim, among other orders, a final charging order over the entire London accounts. Harneys does not practise the law of England and Wales, but the decision offers commonwealth practitioners a useful illustration of how the English courts a...

Harneys has successfully acted for the joint liquidators of Phoenix Commodities Pvt Ltd (Phoenix), Ryan Jarvis of Deloitte and Rachelle Frisby at Interpath (formerly Deloitte), in an important BVI Court of Appeal decision clarifying when a person has agreed in writing to become a shareholder. In ICM SPC v Jarvis, the Court held that section 49 of the Business Companies Act 2004 does not require a formal, signed subscription agreement for a share issue to be valid. A contemporaneous exchange of emails, read together with their attachments, may be enough. The decision is commercially significant for funds, companies, boards and insolvency practitioners: informal correspondence exchanged while a share issue is being progressed can have binding consequences, even where formal subscription documents have not yet been signed. The appeal arose out of the liquidation of Phoenix. We covered the first instance decision in a previous blog post, and a related stay application in another. ICM SPC, acting on behalf of Ancile Special Opportunity and Recovery Fund Segregated Portfolio (ASOR), had been entered on Phoenix's register of members as holder of 440,935 shares, valued at around US$40 million. When Phoenix was put into liquidation the following year, the joint liquidators settled a list of members that included ASOR. ASOR objected, arguing that the share issue was void under section 49 because it had never agreed in writing to become a shareholder, and applied under section 193(3) of the Insolvency Act 2003 to be removed from the list. If ASOR remained on the list, it could be liable to contribute to the company's assets in the liquidation. The judge dismissed ASOR's application at first instance. ASOR appealed to the Court of Appeal, which ultimately upheld the first instance decision. Section 49 provides that a share issue which increases or imposes a liability on a person is void unless that person "agrees in writing to becoming the holder of the share". ASOR argued this provision required a single, formal, bilateral subscription agreement setting out the number of shares, the consideration and the effective date. The Court disagreed with this interpretation of the provision. Instead, it held that section 49 does not require an executed agreement or even a signature: all it requires is a written record, whether in one document or several contemporaneous documents read together, sufficient to identify the person becoming the holder of the share(s), the company, the shareholding in question, and the fact of assent to it. Applying that test, the Court found that an exchange of emails between Phoenix and ASOR's representative, together with an attachment setting out the proposed shareholding, was sufficient to show ASOR's assent to becoming the holder of the shares. It did not matter that one email, in which ASOR's representative confirmed "good receipt of the revised Shareholder structure and adequacy of the same", was not itself "a model of legal drafting", and "did not use the words 'subscribe', 'allot', 'issue', or 'agree to be bound"'. The surrounding correspondence showed that (i) the shares were about to be issued, (ii) the proposed shareholding had been circulated, and (iii) ASOR's representative had confirmed that the revised structure was correct. Read together, the emails and attachment were sufficient to establish that ASOR had agreed in writing to become the holder of the shares. The Court of Appeal also confirmed – dismissing the respondent liquidators' counter-notice on this point – that the written assent required by section 49 must exist before or at the time the shares are issued. Documents created afterwards cannot cure a defective issue, but they remain admissible as evidence corroborating that assent was given earlier. A certificate ASOR later signed, describing itself as holder of the shares, could not retrospectively validate the issue – but it did support the conclusion that ASOR had agreed to the shareholdin...

On 31 March, the Grand Court of the Cayman Islands delivered its judgment in the Matter of New Ruipeng Pet Group Inc, making orders concerning the appointment of restructuring officers (ROs) over the company. The judgment holds significance as it is the first to address the jurisdictional threshold that must be satisfied to make such an RO continuation order. The requirements are straightforward: the ROs must demonstrate that the conditions for a de novo appointment continue to exist. However, the effect of the judgment has wider practical implications for ROs, creditors and companies alike. There are two statutory preconditions for the appointment of ROs set out under section 91B of the Cayman Companies Act (2025 Revision): that the company is or is likely to become unable to pay its debts within the meaning of section 93; and the company intends to present a compromise or arrangement to its creditors either pursuant to the Act, the foreign law of any country, or by way of a consensual restructuring. In 2022, Justice Ian Kawaley issued the first judgment under the RO regime, In the Matter of Oriente Group Ltd, holding that the jurisdiction to appoint ROs is a broad one to be exercised where: (a) the statutory preconditions are met; and (b) the proposal has or will potentially attract the support of a majority of creditors as a more favourable commercial alternative to a winding up of the company. The following year, Justice David Doyle dismissed a petition for the appointment of ROs in In the Matter of Aubit International and set out a detailed list of 25 matters the court should consider when determining whether to make an appointment order building on the principles detailed in Re Oriente and earlier restructuring cases that predated the RO regime. Five of those points addressing the threshold are summarised as follows. First, Doyle J observed that the jurisdiction may only be exercised where the court is satisfied the statutory precondition of an intention to present a restructuring proposal to creditors is met by credible evidence of a rational proposal with reasonable prospects of success. Second, he said the court will need to be satisfied that management genuinely require and deserve a "breathing space" to finalise a restructuring plan with creditors that has a reasonable chance of success and would be in the best interests of creditors and enable the company to continue as a going concern. The judge said the court needs to guard against placing any emphasis on any unrealistic "wishful thinking" by management. Third, Doyle J said it is important that petitioners seeking the appointment of ROs should have all their ducks in a row before filing the petition and they should not assume that if their evidence is inadequate, the court will grant them an adjournment. Finally, the judge observed that even if the company and all creditors agree to the appointment of ROs, the court must, nevertheless, of course, be satisfied that it has jurisdiction to make the order and that making the order would, in its discretion, be a proper exercise of such jurisdiction. Companies and creditors cannot confer jurisdiction on the court to appoint ROs simply by consent. As noted, the effect of the judgment in Ruipeng is that now the ROs must show that their continued appointment is justified and must do so by demonstrating afresh that the criteria for making an appointment order are satisfied. Justice Jalil Asif held that if the criteria are not met: "then it seems to me that the court is under a duty to terminate the appointment at that stage because the statutory purposes set out in section 91B and the statutory criteria for the appointment are no longer satisfied." Onerous obligations? As demonstrated in Re Aubit, the threshold for the appointment of ROs in the first instance is high and must be properly evidenced. By imposing these requirements on the ROs at each case management conference, they must come to court prepared. To that end...

The BVI has established a reputation for maintaining an independent and highly respected court system for the resolution of high-value commercial disputes. The courts benefit from adherence to common law principles and the appointment of experienced judges, whose expertise ensures that proceedings are conducted in accordance with internationally recognised standards of fairness and legal rigour. This, combined with a well-developed body of commercial case law, guided by English and Commonwealth authority, has made the BVI a trusted jurisdiction for resolving complex cross-border disputes. The BVI court system has established itself as a global hub for commercial and insolvency-related matters and trust litigation. With over 355,000 active business companies registered in the jurisdiction, the sheer volume of BVI-incorporated entities used in international corporate and fund structures means cross-border commercial disputes and insolvencies frequently have a BVI nexus. The BVI Insolvency Act, Revised Edition 2020 provides a robust framework for recognising foreign proceedings and assisting foreign representatives from prescribed jurisdictions. The BVI courts form part of the Eastern Caribbean Supreme Court (ECSC) system. The civil court hierarchy comprises: (a) the High Court (Civil Division); (b) the High Court (Commercial Division); (c) the ECSC Court of Appeal; and (d) the Judicial Committee of the Privy Council in London, which sits as the final appellate tribunal. Procedure is governed by the Eastern Caribbean Supreme Court Civil Procedure Rules (Revised Edition) 2023 (EC CPR) and associated practice directions, which are based on, but not identical to, the England & Wales Civil Procedure Rules. Whereas the BVI Court does not have the extensive system of Pre-Action Protocols found in England & Wales, Practice Direction 8 (No 2 of 2023) introduced protocols requiring parties to share relevant information prior to commencing a claim. The objective is to facilitate early exchange of details, promote settlement, and ensure any subsequent litigation is managed efficiently. A claimant is expected to write to the defendant outlining the claim, and the defendant must reply within an agreed period either accepting or contesting liability. Failure to comply may attract adverse costs consequences, save where urgency applies or a limitation period is about to expire. The court nonetheless expects parties to act reasonably and promptly in exchanging documents and information and in attempting to avoid litigation. The method depends on the nature of the dispute: Part 8 Claims. Part 8 of the EC CPR governs the commencement of proceedings in the BVI and applies to all claims as the default procedure — the claimant files a Part 8 Claim Form together with a Statement of Claim, setting out a short description of the claim, the remedy sought, and an address for service. There is no monetary threshold for commencing a Part 8 claim as such, although claims proceeding in the BVI Commercial Division must have a minimum value of US$500,000. Once the claim form is served the defendant has 14 days to file an acknowledgment of service and 28 days to file a defence; the case then progresses through a case management conference, disclosure, witness statements and expert evidence (typically spanning six to eighteen months), with complex commercial trials usually listed within 18 to 24 months of filing. Fixed Date Claims. A fixed date claim form is designed so that a hearing date is allocated at the point of issue. If the claim is undefended or the court considers it suitable for summary determination, this initial hearing may be treated as the trial itself. The claim is supported by affidavit evidence rather than pleadings. Examples of matters requiring a fixed date claim form include: recognition and enforcement of foreign arbitral awards; restoration of a company; rectification of a register of members; Beddoe and Public Trustee v Cooper applicatio...

The BVI has established a reputation for maintaining an independent and highly respected court system for the resolution of high-value commercial disputes. The courts benefit from adherence to common law principles and the appointment of experienced judges, whose expertise ensures that proceedings are conducted in accordance with internationally recognised standards of fairness and legal rigour. This, combined with a well-developed body of commercial case law, guided by English and Commonwealth authority, has made the BVI a trusted jurisdiction for resolving complex cross-border disputes. The BVI court system has established itself as a global hub for commercial and insolvency-related matters and trust litigation. With over 355,000 active business companies registered in the jurisdiction, the sheer volume of BVI-incorporated entities used in international corporate and fund structures means cross-border commercial disputes and insolvencies frequently have a BVI nexus. The BVI Insolvency Act, Revised Edition 2020 provides a robust framework for recognising foreign proceedings and assisting foreign representatives from prescribed jurisdictions. The BVI courts form part of the Eastern Caribbean Supreme Court (ECSC) system. The civil court hierarchy comprises: (a) the High Court (Civil Division); (b) the High Court (Commercial Division); (c) the ECSC Court of Appeal; and (d) the Judicial Committee of the Privy Council in London, which sits as the final appellate tribunal. Procedure is governed by the Eastern Caribbean Supreme Court Civil Procedure Rules (Revised Edition) 2023 (EC CPR) and associated practice directions, which are based on, but not identical to, the England & Wales Civil Procedure Rules. Whereas the BVI Court does not have the extensive system of Pre-Action Protocols found in England & Wales, Practice Direction 8 (No 2 of 2023) introduced protocols requiring parties to share relevant information prior to commencing a claim. The objective is to facilitate early exchange of details, promote settlement, and ensure any subsequent litigation is managed efficiently. A claimant is expected to write to the defendant outlining the claim, and the defendant must reply within an agreed period either accepting or contesting liability. Failure to comply may attract adverse costs consequences, save where urgency applies or a limitation period is about to expire. The court nonetheless expects parties to act reasonably and promptly in exchanging documents and information and in attempting to avoid litigation. The method depends on the nature of the dispute: Part 8 Claims. Part 8 of the EC CPR governs the commencement of proceedings in the BVI and applies to all claims as the default procedure — the claimant files a Part 8 Claim Form together with a Statement of Claim, setting out a short description of the claim, the remedy sought, and an address for service. There is no monetary threshold for commencing a Part 8 claim as such, although claims proceeding in the BVI Commercial Division must have a minimum value of US$500,000. Once the claim form is served the defendant has 14 days to file an acknowledgment of service and 28 days to file a defence; the case then progresses through a case management conference, disclosure, witness statements and expert evidence (typically spanning six to eighteen months), with complex commercial trials usually listed within 18 to 24 months of filing. Fixed Date Claims. A fixed date claim form is designed so that a hearing date is allocated at the point of issue. If the claim is undefended or the court considers it suitable for summary determination, this initial hearing may be treated as the trial itself. The claim is supported by affidavit evidence rather than pleadings. Examples of matters requiring a fixed date claim form include: recognition and enforcement of foreign arbitral awards; restoration of a company; rectification of a register of members; Beddoe and Public Trustee v Cooper applicatio...

In the recent decision of the BVI Commercial Court in Transcience Investments Limited v Greentown Holdings (BVI) Inc, the Court dismissed a jurisdiction challenge and related stay application by the Third Defendant, confirming that minority shareholder remedies under the BVI Business Companies Act, Revised Edition 2020 are to be tried in the BVI, while also clarifying how the ECSC CPR 2023 transitional provisions operate. The case will be of particular interest to those bringing or defending minority shareholder and director-duty claims involving BVI companies with foreign operations, and to practitioners navigating the ECSC CPR 2023 transitional provisions. Harneys acts for Transcience, a BVI company and minority shareholder of a BVI holding company, Greentown BVI, brought claims alleging that the affairs of Greentown BVI had been conducted in a manner that was oppressive, unfairly discriminatory and/or unfairly prejudicial to it as a minority shareholder. The causes of action were: (i) unfair prejudice under section 184I of the BCA; (ii) breach of directors' duties under section 184B of the BCA; and (iii) unlawful means conspiracy. The Third Defendant, a resident of Pakistani with dual Pakistani and Swiss nationality, is a director of Greentown BVI and the ultimate beneficial owner of its majority shareholder. His notice of application sought: (a) a declaration that the claim was not a proper one for the BVI Court to try; or alternatively (b) a stay on forum non conveniens grounds in favour of Pakistan. A preliminary issue was whether the old ECSC CPR 2000 or the revised ECSC CPR 2023 governed service on the Third Defendant. The claim was issued in February 2023, before the Revised Rules came into effect on 31 July 2023. Under the old rules, Transcience would have required permission to serve the Third Defendant out of the jurisdiction. The Revised Rules, however, permit service out of the jurisdiction without a prior application, subject to filing a certificate of service out. The Third Defendant argued that, by virtue of the transitional provisions in Part 75 of the Revised Rules, the old rules continued to apply and that Transcience's failure to obtain permission to serve out rendered service irregular. The Court held that it was not open to raise a freestanding service irregularity point because it had not been properly made in the notice of application. In any event, applying a purposive construction consistent with the Overriding Objective of the CPR, Justice Mangatal held that service under the Revised Rules was not precluded by Part 75. She emphasised that, save in proceedings where a trial date had been fixed, the clear intention behind the transitional provisions is that the Revised Rules and their principles should apply as soon as possible, including to pre-commencement proceedings without a trial date. On the substance of the jurisdiction challenge, the Court treated the application as one under CPR 9.7 and/or 9.7A of the old rules (unchanged as CPR 9.7 and 9.8 under the Revised Rules). In that context, the burden rested on the Third Defendant, as the party seeking the declaration and stay, to establish that Pakistan was clearly or distinctly more appropriate forum. Applying the principles in Spiliada Maritime Corporation v Cansulex Ltd and Livingston Properties Equities Inc v JSC MCC Eurochem, the Court held that the Third Defendant had not discharged that burden. Key findings included: Pakistan was not an available forum. Two of the three claims – those under sections 184I and 184B of the BCA – are statutory remedies conferred by the BVI legislature on members of BVI companies. They can only be brought in the BVI and are not available in Pakistan. The Court also noted that the prior Lahore proceedings, which concerned different rights and were brought by Transcience's UBO in his own name, had been discontinued, and that Pakistan was not an available forum for Transcience's BCA claims. Separate legal persona...

In Liao v Liao [2026] NZCA 250, the New Zealand Court of Appeal has confirmed that the presumption of advancement continues to apply to transfers from parents to adult children in New Zealand, regardless of the child's age or financial independence. The Court dismissed the appeal on the evidence, holding that the evidence of the parties' intentions clearly displaced the presumption of a resulting trust without recourse to the presumption of advancement. The decision follows several recent New Zealand decisions drifting from the traditional English common law position, which the Court of Appeal has now reaffirmed. In reaching that conclusion, the Court weighed the orthodox English common law position against the diverging Canadian approach in Pecore v Pecore, which it considered but declined to follow. The resulting trust principles are well settled. Where a person makes a voluntary payment to another, or advances the purchase price of property registered in another's name, equity presumes the transferor intended to retain the beneficial interest: Westdeutsche Landesbank Girozentrale v Islington London Borough Council. That presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of an intention to make an outright transfer (see the New Zealand authority of Potter v Potter [2003]). The presumption of advancement operates as a counter-presumption. In certain relationships, historically husband and wife, or parent and child, it is presumed that the transferor intended to make a gift, displacing the resulting trust. Historically, the presumption rested on two notions: the obligation to support the other person, and the natural love and affection presumed to arise from the relationship. Over time it was extended to anyone standing in the position of a parent. In England and Australia, the presumption of advancement between parent and child remains part of the law, even if its strength has been questioned. In Laskar v Laskar, the English Court of Appeal confirmed that the presumption still exists between parent and child, though it described it as relatively weak, and weaker still where the child was over 18 and managed their own affairs. The Privy Council reaffirmed its relevance in Enal v Singh, holding that, although much criticised as based on outdated assumptions, the presumption continues to form a relevant part of the Court's inquiry into what the parties intended. The High Court of Australia took a similar line in Nelson v Nelson (1995), accepting that the presumption applies to adult children, though its practical importance may be limited where the evidence allows a positive finding of actual intention. The Canadian Supreme Court took a different approach in Pecore v Pecore. The majority held the presumption should not apply to transfers from parents to adult children, for three reasons(per Rothestein J): 1. the parental obligation to support does not extend to independent adults; 2. the common Canadian practice of ageing parents placing assets in adult children's names for financial management warranted a rebuttable presumption that the child holds the property on trust; and 3. making dependency the threshold would create unacceptable uncertainty, given the variety of circumstances in which an adult child might be viewed as dependent. The majority also rejected parental affection as a basis, observing that affection arises in other familial relationships, such as between siblings, where the presumption has never been applied. Abella J, in dissent, took a fundamentally different view. Her Honour's examination of the historical authorities demonstrated that resting the presumption on obligation alone narrowed and somewhat contradicted the historical rationale. Parental affection, no less than parental obligation, had always grounded the presumption. What distinguishes the parent-child relationship from other bonds of affection is not financial dependency, stated Abella J, but ...

In Liao v Liao [2026] NZCA 250, the New Zealand Court of Appeal has confirmed that the presumption of advancement continues to apply to transfers from parents to adult children in New Zealand, regardless of the child's age or financial independence. The Court dismissed the appeal on the evidence, holding that the evidence of the parties' intentions clearly displaced the presumption of a resulting trust without recourse to the presumption of advancement. The decision follows several recent New Zealand decisions drifting from the traditional English common law position, which the Court of Appeal has now reaffirmed. In reaching that conclusion, the Court weighed the orthodox English common law position against the diverging Canadian approach in Pecore v Pecore, which it considered but declined to follow. The resulting trust principles are well settled. Where a person makes a voluntary payment to another, or advances the purchase price of property registered in another's name, equity presumes the transferor intended to retain the beneficial interest: Westdeutsche Landesbank Girozentrale v Islington London Borough Council. That presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of an intention to make an outright transfer (see the New Zealand authority of Potter v Potter [2003]). The presumption of advancement operates as a counter-presumption. In certain relationships, historically husband and wife, or parent and child, it is presumed that the transferor intended to make a gift, displacing the resulting trust. Historically, the presumption rested on two notions: the obligation to support the other person, and the natural love and affection presumed to arise from the relationship. Over time it was extended to anyone standing in the position of a parent. In England and Australia, the presumption of advancement between parent and child remains part of the law, even if its strength has been questioned. In Laskar v Laskar, the English Court of Appeal confirmed that the presumption still exists between parent and child, though it described it as relatively weak, and weaker still where the child was over 18 and managed their own affairs. The Privy Council reaffirmed its relevance in Enal v Singh, holding that, although much criticised as based on outdated assumptions, the presumption continues to form a relevant part of the Court's inquiry into what the parties intended. The High Court of Australia took a similar line in Nelson v Nelson (1995), accepting that the presumption applies to adult children, though its practical importance may be limited where the evidence allows a positive finding of actual intention. The Canadian Supreme Court took a different approach in Pecore v Pecore. The majority held the presumption should not apply to transfers from parents to adult children, for three reasons(per Rothestein J): 1. the parental obligation to support does not extend to independent adults; 2. the common Canadian practice of ageing parents placing assets in adult children's names for financial management warranted a rebuttable presumption that the child holds the property on trust; and 3. making dependency the threshold would create unacceptable uncertainty, given the variety of circumstances in which an adult child might be viewed as dependent. The majority also rejected parental affection as a basis, observing that affection arises in other familial relationships, such as between siblings, where the presumption has never been applied. Abella J, in dissent, took a fundamentally different view. Her Honour's examination of the historical authorities demonstrated that resting the presumption on obligation alone narrowed and somewhat contradicted the historical rationale. Parental affection, no less than parental obligation, had always grounded the presumption. What distinguishes the parent-child relationship from other bonds of affection is not financial dependency, stated Abella J, but ...

While some may think it odd to pursue an "innocent" counterparty for losses caused by fraud, Logix Aero Ireland Limited v Siam Aero Repair Company Limited demonstrates that such an approach is not doomed to fail, but the contract terms must do the heavy lifting in advance. As we observed in our Offshore Litigation Blog post on the Logix Aero decision, a breach that merely provides the setting for a third-party fraud will not ground a claim in damages. Online fraud is not going away. For any defrauded party considering seeking damages from a contractual counterparty, the key lessons from Logix Aero are clear: secure the right protections before signing and ensure internal protocols and conduct match those commitments. As Phillips LJ confirmed in Logix Aero, a confidentiality clause protecting commercial information from competitors will not support a damages claim where loss is caused by payment fraud. The clause must target the risk. To obtain protection against payment fraud, parties may wish to consider the following contractual protections: Payment verification protocols: A clause requiring each party to verify bank account details and payment timing through a separate, pre-agreed channel (eg telephone confirmation to a known number) before making any payment. The clause should also stipulate that no change to bank details will be effective unless confirmed in writing by an authorised signatory and verified by call. These simple mechanisms would have prevented Logix Aero's loss entirely. Indemnity for fraud losses: A mutual indemnity providing that, if one party's failure to comply with agreed security protocols results in the other suffering loss through third-party fraud, the non-compliant party will indemnify. A well-drafted indemnity sidesteps causation difficulties by creating a primary payment obligation. Liability cap carve-out: Where a contract contains a limitation of liability, ensure losses arising from failure to comply with anti-fraud obligations are carved out from any cap if you want all losses to be recoverable. IT security obligations: An express obligation to maintain reasonable IT security measures (such as multi-factor authentication and encrypted communications) to prevent unauthorised interception. Notification obligations: A requirement to notify the other party immediately upon becoming aware of suspicious communications or a potential security breach, and to cooperate in any investigation or recovery efforts. Securing robust contractual protections is only half the battle. Logix Aero makes it clear that a company whose team fails to follow reasonable anti-fraud protocols may find any claim against a counterparty undermined. Logix Aero's automated email system flagged the unfamiliar sender address with a warning, but the subtle change went unnoticed, and Logix Aero paid without independently verifying the bank details. Phillips LJ observed that, had the matter proceeded to trial, Siam Aero might have raised a defence of circuity of action, given that Logix Aero was itself in breach of the confidentiality clause (committing the first breach). As Heather Williams J observed at first instance, "both parties unwittingly enabled the fraud to take place". Companies must ensure their internal procedures at least match their contractual commitments, and should do their utmost to ensure their staff are aware of, and know how to protect against, the latest operational risks: Act on system warnings: If your email platform flags an unfamiliar sender or domain change, investigate before proceeding. Verify bank details independently: Particularly if a contractual requirement, confirm account details through a separate channel before making any significant payment. Train staff regularly: Ensure employees understand email interception risks, mitigation strategies and any specific contractual requirements. Document compliance: Keep records showing verification protocols have been followed. Contemporaneous evidence...

In a recent decision of the BVI Court, a connected group company was ordered to repay US$125.9 million after a last-minute intra-group loan repayment was found to be an unfair preference. In Almond v Linxens, the Court held that a payment by Tsinghua Unigroup International Co., Ltd (TUI) to Linxens, made two days before announcing a bond default, was designed to prefer an insider over the external bondholders. The decision confirms that intra-group treasury movements in the twilight zone will be judged by their commercial reality, not their characterisation as ordinary financing activity. TUI was a BVI-incorporated finance vehicle within a large PRC conglomerate, established to raise debt and make investments as directed by the group. On 7 December 2020, it paid US$125.9 million to French group company Linxens as a partial repayment of a loan that was not due for another nine months and had not been demanded. Two days later, TUI announced to the Hong Kong Stock Exchange that neither it nor its subsidiary bond issuer could meet bond repayments of around US$463 million. TUI also faced a significant liability to another Hong Kong group entity, Tsinghua Unic Limited, with the first tranche of US$1.05 billion falling due less than two months later. TUI's liquidators applied to set aside the payment as an unfair preference. Because Linxens was a connected person, the BVI Insolvency Act presumed that the payment was an insolvency transaction not made in the ordinary course of business. It was for Linxens to prove otherwise. Linxens argued that TUI was solvent when the payment was made and that the payment was ordinary-course treasury activity. On solvency, the Court adopted the "building blocks" approach from Bucci v Carman (Re Casa Estates): it is not necessary to reconstruct a company's exact solvency position. If the respondent cannot establish the necessary building blocks for its solvency case, the statutory presumption prevails. Several building blocks were absent. There were no bank statements to substantiate Linxens' claims that TUI had received US$523 million in cash - despite Linxens having been granted an adjournment specifically to obtain this evidence. Even if the funds had been received, there was no evidence they were freely available to TUI rather than earmarked for onward payment to the group parent. Corrections and concessions by Linxens' own expert at trial further undermined the viability of the solvency arguments. The ordinary-course defence also failed. While the Court accepted that loan repayments were within the type of business TUI ordinarily conducted, applying Lord Mansfield's distinction in Rust v Cooper, the Court held that it is not enough to ask whether the type of transaction fell within the company's ordinary business. If that were the test, no routine transaction type could ever amount to an unfair preference. The real question is whether the design behind the specific transaction was to confer a preference. A preference obtained "consequentially", as a by-product of continuing trade, is on one side of the line; a preference obtained "by design" is on the other. The repayment was not demanded, was not due, and was rushed through within 48 hours. The contemporaneous documents showed that the group was pushing cash back to operating entities to reduce the impact of the impending bond default. Linxens' own CFO described TUI's conduct as "weird" and "very strange", and a colleague suggested freezing Linxens' cash "for safety['s] sake" - reactions inconsistent with an ordinary-course transaction. Linxens' own employees understood that the payment was being made because the group was "pushing back all the cash to the operating units to ensure that there is as little impact as possible of [the] likely December 10 default on those bonds." Linxens argued that the loan had originally been made to purchase bonds trading at a discount and was simply being repaid when TUI had sufficient funds. The Court reject...

The Grand Court has delivered its judgment in Re 58. com, Inc., a long running and highly contested section 238 fair appraisal dispute in the Cayman Islands. Following a six-week trial before the Honourable Chief Justice Ramsay-Hale in 2024, the Court ultimately rejected the dissenters' contended fair value of $105.56 per American Depository share (ADS) (89 per cent higher than the merger consideration) based on a discounted cash flow (DCF) analysis. Recognising the Privy Council's decision in Maso Capital Investments Ltd v Trina Solar Ltd (Trina Solar), the Court determined that the merger consideration of US$56 per ADS represented the fair value of the dissenters' shares, noting that "a flawed [merger] process does not automatically disqualify the merger price". Prior to the merger, 58.com was a NYSE-listed, Cayman Islands-incorporated company which operated an online classifieds platform in the People's Republic of China. In 2020, its founder and CEO, Mr Jinbo "Michael" Yao, led a management-backed take-private by a consortium including Ocean Link Capital, Warburg Pincus and General Atlantic, at a price of US$56 per ADS. The merger, valued at US$8.7 billion, was the largest take-private of a PRC company at the time. Following completion, the dissenters (comprising professional appraisal arbitrage investors) exercised their statutory right under section 238 of the Cayman Islands' Companies Act to have the Court determine the fair value of their shares. At trial, the Company argued that fair value represented an average of the merger price blended with a mid-point of Adjusted Market Trading Price (AMTP), so that merger price operated not as a primary indicator of fair value but as a ceiling that should not be exceeded. The dissenters, on the other hand, relied exclusively on a DCF analysis, arguing that no weight could be placed on merger price due to flaws in the merger process. They also challenged the reliability of an AMTP valuation on the basis that the market for the Company's shares was inefficient and that material non-public information (MNPI) was available to insiders – both of which they argued rendered fair value unreliable. The Court acknowledged that the "decision in Trina Solar makes it clear that the reliability of the transaction price forms part of the Court's assessment of the appropriate valuation methodology and must be evaluated before determining the weight to be given to competing indicators of value". The Court upheld the Privy Council's determination that reliability of the merger price is not a binary concept but a qualitative assessment on a sliding scale and there is no presumption in favour of, or against, the merger price. The Court further noted that deficiencies in the deal process do not automatically disqualify it and that factors identified in the relevant Delaware authorities (on which the Cayman Islands courts have relied in section 238 appraisal matters) can be persuasive and are useful guides, but they are not a checklist that must be satisfied before any reliance may be placed on a merger price. While the Court acknowledged certain imperfections during the merger process in 58.com, including informal communications between a Special Committee member and the buyer group, and the absence of a go-shop/market check, it was not persuaded that those features distorted the merger price ultimately agreed or deprived the Special Committee of its ability to act independently. The Court also concluded that AMTP was not a reliable indicator of fair value in this case and should be accorded no material weight given certain MNPI (comprising revised management projections and operational updates that were available to insiders of the Company) and concerns regarding the roll-forward carried out by the Company's expert, undermined the premise that the market price reflected intrinsic value. The Court also rejected the dissenters' DCF valuation on the basis that that their chosen cash flow inputs wer...

The Grand Court has delivered its judgment in Re 58.com, Inc., a long running and highly contested section 238 fair appraisal dispute in the Cayman Islands. Following a six-week trial before the Honourable Chief Justice Ramsay-Hale in 2024, the Court ultimately rejected the dissenters' contended fair value of $105.56 per American Depository share (ADS) (89 per cent higher than the merger consideration) based on a discounted cash flow (DCF) analysis. Recognising the Privy Council's decision in Maso Capital Investments Ltd v Trina Solar Ltd (Trina Solar), the Court determined that the merger consideration of US$56 per ADS represented the fair value of the dissenters' shares, noting that "a flawed [merger] process does not automatically disqualify the merger price". Prior to the merger, 58.com was a NYSE-listed, Cayman Islands-incorporated company which operated an online classifieds platform in the People's Republic of China. In 2020, its founder and CEO, Mr Jinbo "Michael" Yao, led a management-backed take-private by a consortium including Ocean Link Capital, Warburg Pincus and General Atlantic, at a price of US$56 per ADS. The merger, valued at US$8.7 billion, was the largest take-private of a PRC company at the time. Following completion, the dissenters (comprising professional appraisal arbitrage investors) exercised their statutory right under section 238 of the Cayman Islands' Companies Act to have the Court determine the fair value of their shares. At trial, the Company argued that fair value represented an average of the merger price blended with a mid-point of Adjusted Market Trading Price (AMTP), so that merger price operated not as a primary indicator of fair value but as a ceiling that should not be exceeded. The dissenters, on the other hand, relied exclusively on a DCF analysis, arguing that no weight could be placed on merger price due to flaws in the merger process. They also challenged the reliability of an AMTP valuation on the basis that the market for the Company's shares was inefficient and that material non-public information (MNPI) was available to insiders – both of which they argued rendered fair value unreliable. The Court acknowledged that the "decision in Trina Solar makes it clear that the reliability of the transaction price forms part of the Court's assessment of the appropriate valuation methodology and must be evaluated before determining the weight to be given to competing indicators of value". The Court upheld the Privy Council's determination that reliability of the merger price is not a binary concept but a qualitative assessment on a sliding scale and there is no presumption in favour of, or against, the merger price. The Court further noted that deficiencies in the deal process do not automatically disqualify it and that factors identified in the relevant Delaware authorities (on which the Cayman Islands courts have relied in section 238 appraisal matters) can be persuasive and are useful guides, but they are not a checklist that must be satisfied before any reliance may be placed on a merger price. While the Court acknowledged certain imperfections during the merger process in 58.com, including informal communications between a Special Committee member and the buyer group, and the absence of a go-shop/market check, it was not persuaded that those features distorted the merger price ultimately agreed or deprived the Special Committee of its ability to act independently. The Court also concluded that AMTP was not a reliable indicator of fair value in this case and should be accorded no material weight given certain MNPI (comprising revised management projections and operational updates that were available to insiders of the Company) and concerns regarding the roll-forward carried out by the Company's expert, undermined the premise that the market price reflected intrinsic value. The Court also rejected the dissenters' DCF valuation on the basis that that their chosen cash flow inputs were...

The recent decision in In the Matter of the D, E, F, G and H Trusts serves as an important reminder on the nature of the confidentiality framework in trust proceedings for parties in the Cayman Islands. In a clear and helpful judgment, the Grand Court has restated the principles governing when, and how, confidentiality orders will be granted in private trust cases. Between 2007 and 2009, a former trustee accepted additions to the trust fund from an individual without appreciating that, under the terms of the trust instrument, the act of making those additions rendered the contributor a "settlor" and, by operation of the definitional machinery, an "excluded person" who could no longer benefit from the trust. Distributions were subsequently made to or for the benefit of that individual, and assets were transferred to related trusts established for his children in which he also held an interest. On the trustee's analysis, each of these steps had been taken in breach of trust. Seeking to rectify the position, the current trustee turned to a remedy that will be familiar to trust practitioners: an application under section 64A of the Trusts Act (2021 Revision), the statutory codification of the Hastings-Bass jurisdiction in Cayman law, for declarations that the relevant deeds of addition were void. Before filing the substantive proceedings, the trustee adopted what has become the established two-stage approach: by first making an ex parte on notice application for confidentiality and anonymisation orders designed to shield the trusts, the family, and the proceedings from the public; followed by the substantive section 64A proceedings. The Chief Justice identified the constitutional starting point in determining whether to grant a confidentiality order: the principle of open justice. Sections 7(1) and 7(9) of the Constitution require that proceedings be conducted in public and, as Newman JA observed in AHAB, "the administration of justice in Cayman must comply with the principle of open justice". That principle, however, is not absolute. The Chief Justice noted how section 7(10) of the Constitution expressly permits derogation where it is "necessary or expedient in the interests of justice", including where publicity would prejudice the interests of justice, involve the welfare of minors, or compromise the private lives of the persons concerned. Drawing on a rich line of authority, the Chief Justice distilled the applicable test into three clear questions: 1. Gateway: Does the case fall within a recognised category permitting derogation from open justice? 2. Proportionality: Is the confidentiality sought necessary and proportionate? 3. Countervailing interest: Is there any public interest that outweighs the privacy interests engaged? Applying the three-stage test to the present case, the Chief Justice found this to be "a paradigm case for the grant of confidentiality orders". The Court found that: the proceedings were properly characterised as internal trust administration matters; that there was no suggestion of public misconduct, regulatory concern, or wider public interest engaged; and that the information at stake (encompassing financial affairs, family relationships, and the identity and status of beneficiaries, including minors) was described as "inherently private". The Court accordingly granted the relief sought: anonymisation of the parties by initials, the filing of an anonymised originating summons only, sealing of the court file, private hearings, and anonymised publication of any resulting judgments or orders. This judgment serves as a welcome restatement of the principles governing confidentiality in Cayman Islands trust proceedings. For parties to trust applications and proceedings, the Chief Justice's three-stage test provides a clear framework that must be squarely addressed in every application: 1. Identify the gateway: establish that the matter falls within a recognised category permitting derogation from open j...

On 13 May 2026, the Supreme Court of New Zealand granted leave to appeal in RH & JY Trust v WorkSafe New Zealand, and considered whether a trust and/or the trustees of a trust acting collectively constitutes a "person" for statutory purposes. Although the case arises under New Zealand's Health and Safety at Work Act 2015, the underlying question, whether a trust can bear obligations and liabilities as if it were a distinct legal entity, raises interesting questions about the nature of trusts and trustee liability that are likely to resonate across common law jurisdictions. A tragic accident took place in September 2020, where a young child lost their life as a result of injuries sustained on a farm owned and operated by the RH & JY Trust. At the time, the Trust had three trustees: two individual trustees (once since deceased), and Perpetual Trust Limited, a corporate trustee appointed only five weeks before the accident. WorkSafe New Zealand, the workplace health and safety regulator, brought criminal charges under sections 37(1) and 48(1) of New Zealand's Health and Safety at Work Act 2015 against both the Trust itself and, in the alternative, the trustees collectively. The trustees challenged whether charges could validly be brought against the Trust or against them as a collective, as distinct from charges against each trustee individually. The case has produced a striking divergence of judicial opinion at each level. The District Court In the District Court, Judge Bidois held that no charges could be brought against the trust or the trustees collectively, reasoning that "a trust is not a person and cannot be held liable for the actions or failures of the trustees of the trust". On this view, only the trustees in their individual capacities could be defendants, and the charges against the Trust were dismissed. The High Court Harvey J allowed WorkSafe's appeal in part. He accepted that "notwithstanding the orthodox position that a trust is not a separate legal entity, the position can be displaced by specific legislation" and that "the orthodox position that a trust is not a separate legal entity is relevant but not determinative". He found that it would be a "perverse outcome" if three loosely associated persons carrying out business with an informal structure could collectively be a 'person conducting a business or undertaking' (PCBU), but three trustees holding business assets in trust could not be. However, Harvey J concluded that the correct defendant was the trustees collectively, not the Trust itself, preferring an interpretation that "accords more closely to civil law and to reality". The Court of Appeal The Court of Appeal's decision was a 2-1 split. The majority (Cooke and Palmer JJ) held that a trust, or its trustees acting collectively, can be a "person" for the purposes of the Act; Whata J dissented. Cooke J, delivering the majority judgment, acknowledged the force of the argument that "concluding that a trust is a person who can be charged with an offence is apparently inconsistent with well-established principles of trust law". A trust is not a legal person; it is essentially a set of equitable obligations that the trustees have. Nevertheless, the majority held that "whilst trust law creates a very strong starting point for addressing the issues of interpretation that arise, it is not determinative". The majority's reasoning rested on several pillars: The definition of "person" in section 16 of the Act "includes the Crown, a corporation sole, and a body of persons, whether corporate or unincorporate". The majority reasoned that these definitions "extend who can be a PCBU to unincorporated bodies of persons" and that "questions of legal form are not determinative. It depends on who is conducting the business or undertaking as a matter of substance". The majority also relied heavily on Discount Brands Ltd v Westfield (New Zealand) Ltd [2005] NZSC 17, where Tipping J observed that "by making unincorporate bodi...

The Perpetuities Act (2025 Revision) marks an important moment for Cayman Islands trust law. For settlors of new trusts, the legislation offers the power to opt out of any perpetuity limitation at inception. For those who administer existing structures, it creates a streamlined, court-supervised route to convert a fixed-term trust into one of unlimited duration. In March 2026, in what is understood to be the first successful application of its kind under the new statutory jurisdiction conferred by section 20 of the Perpetuities Act (2025 Revision), Harneys successfully obtained an order from the Grand Court, disapplying the rule against perpetuities for a discretionary family trust. The order empowered the trustee to execute a deed of variation replacing the trust's fixed-term period with an indefinite duration. Prior to the amendment effected by Act 7 of 2024 (which came into force on 22 August 2024), Cayman Islands discretionary trusts were subject to a statutory perpetuity period of 150 years from the effective date of the relevant instrument. Part 3 of the 2025 Revision, which consolidates the 2024 amendment, changes the landscape in three material ways. First, for new trusts created on or after 22 August 2024, the instrument itself may simply provide that the rule against perpetuities does not apply (provided the trust does not hold Cayman land or any interest in Cayman land). The land carve-out is narrow in that it does not extend to income from Cayman land or to the proceeds of sale of Cayman land, and a trust that has opted out of the rule may still hold an interest in an entity that owns Cayman land for the purposes of its business. Second, for existing trusts (whenever created), section 20 permits a trustee, settlor, enforcer, power-holder, or beneficiary to apply to the Grand Court for an order declaring that the rule does not apply. The Court may grant the order where it is satisfied that doing so would not be to the detriment of the beneficiaries. Third, trusts of unlimited duration governed by a foreign law that has no perpetuity rule may change their governing law to Cayman without re-introducing any duration limit. Harneys acted for a professional trustee of a discretionary family trust seeking to give effect to the dynastic objectives of the settlor through the grant of a court order. In the absence of Cayman authority on the exercise of the section 20 jurisdiction, the Court was invited to approach its discretion by reference to persuasive Bermudian case law under section 4 of Bermuda's Perpetuities and Accumulations Act 2009, a materially analogous provision to section 20 of the Perpetuities Act (2025 Revision). The application before the Grand Court drew on judicial guidance from the Supreme Court of Bermuda that establish clear principles guiding the exercise of the statutory power to disapply the rule against perpetuities. The Bermudian authorities establish that: The Court must not function as a "rubber stamp": disapplication will only be granted where it facilitates the continued efficient administration of a family trust, where no beneficiary is materially prejudiced, and where the relief accords with the best interests of the trust as a whole. A forced distribution at the end of a perpetuity period could give rise to significant tax liabilities and premature dissipation of assets to the detriment of future generations—this is a strong justification for disapplication. The potential dilution of existing beneficiaries' economic interests as a result of extending the duration of a trust will ordinarily be an irrelevant consideration. Distilling and drawing from these Bermudian principles, the Cayman Islands Grand Court will therefore likely exercise its discretion in favour of granting relief where disapplication would: (a) accord with the settlor's wishes and the objectives of the trusts; (b) serve the best interests of those beneficially interested as a whole; (c) avoid an unwanted obligation to mak...

The Court of Appeal of England and Wales has dismissed an appeal in Logix Aero Ireland Limited v Siam Aero Repair Company Limited, holding that the voluntary acts of fraudsters broke the chain of causation between an assumed breach of a confidentiality clause and the claimant's loss. The decision restates the principles of legal causation in contract and clarifies the limited reach of London Joint Stock Bank v Macmillan. Although the decision is one of English law, the causation principles applied are common law principles regularly cited in the Cayman Islands and other International Financial Centres (IFCs). Logix agreed to purchase two aircraft engines from Siam Aero under a Letter of Understanding (LOI). The LOI was predominantly non-binding. However, certain clauses – including a confidentiality provision – were expressly stated to be legally binding. Unknown fraudsters intercepted email correspondence between the parties. They registered domain names differing from the genuine addresses by a single character and began altering emails before forwarding them on. Among the changes, they substituted their own Vietnamese bank account details for Siam Aero's Thai account in draft Purchase Agreements and invoices. Logix paid the balance of the purchase price to the fraudsters' account believing it was paying Siam Aero. Logix took no independent step to verify the bank details. The fraud came to light days later when Siam Aero informed Logix by telephone and WhatsApp that it had not received payment, by which point the funds had already left the fraudsters' account. Logix commenced proceedings in England. It initially alleged Siam Aero's complicity in the fraud but dropped that allegation after forensic investigation. The claim was narrowed to a single ground: that Siam Aero's four emails to the fraudsters breached the confidentiality clause and caused Logix's loss. At first instance, Mrs Justice Williams struck out the proceedings under CPR 3.4(2)(a), holding that the claim was "bound to fail". She accepted it was arguable that Siam Aero breached the confidentiality clause by unwittingly "disclosing" documents and information to the fraudsters. She held, however, that it was not arguable that any such breach caused Logix's loss. Lord Justice Males granted permission to appeal solely on causation. On appeal, Logix argued that the Judge wrongly failed to follow Macmillan. In that case, a firm had drawn the cheque negligently, leaving gaps in the figures and words that the clerk exploited to increase the amount from £2 to £120. The House of Lords held that, notwithstanding the intervening fraud, the firm's negligence in drawing the cheque facilitated the forgery and was the effective cause of the loss. As such, the firm was precluded from recovering its loss from the bank on the basis that "forgery is not a remote but a very natural consequence of negligence of this description". Siam Aero opposed the appeal on the ground it was not arguable that its actions breached the confidentiality clause at all. Lord Justice Phillips (Lord Justice Peter Jackson and Lady Justice Cockerill agreeing) dismissed the appeal. It was common ground that the "but for" test of factual causation was satisfied. The question was whether Siam Aero could be held liable despite the intervention of the fraudsters. The Court identified three principles by which the chain of causation may be broken: 1. First, the breach may not be the "effective" or "dominant" cause of loss but merely the opportunity or occasion for it (Galoo v Bright Grahame Murray; Armstead v Royal & Sun Alliance). The same distinction has been applied in the Cayman Islands. In Omni Securities v Deloitte & Touche, the Court of Appeal considered the Galoo test in the context of auditors' negligence and held that whether a breach was the "effective cause" of loss, or merely the "occasion" for it, was to be resolved by "the application of the court's common sense". 2. Second, the loss may not ...

In the recent decision of The Trustees v AB and Ors (Re the D Trust) the Cayman Grand Court granted relief under section 64A of the Trusts Act (2021 Revision) (the Act) to set aside a deed of exclusion (Deed of Exclusion) executed by previous trustees in reliance on erroneous UK tax advice. The decision adds to the growing body of authority on the statutory Hastings-Bass jurisdiction in the Cayman Islands, and includes guidance on the good faith requirement, standing by successor trustees, notification to tax authorities, and whether section 64A applications should be dealt with on the papers. The D Trust is a Cayman Islands discretionary trust with a broad class of beneficiaries. It was originally governed by New Zealand law, but its proper law and forum were changed to the Cayman Islands in November 2019. The trust formed part of a wider estate planning structure. When the D Trust was settled in 2011, the Settlor transferred non-UK situs property into it. A connected trust (the H Trust, governed by Guernsey law) borrowed those funds to purchase a residential property in England. The arrangement was designed to ensure the loan owed by the H Trust to the D Trust remained "excluded property" for UK inheritance tax (IHT) purposes, shielding the value of the UK property from any charge on the Settlor's death. In early 2017, proposed changes to the IHT regime threatened to undermine that planning. The previous trustees instructed a specialist London firm, which recommended (among other options) executing a deed of exclusion to declare the Settlor an "Excluded Person" under the trust deed. The Deed of Exclusion was executed on 30 March 2017, shortly before the new rules took effect on 6 April 2017. In January 2025, a different London firm reviewed the arrangements and concluded that the original advice had been incomplete and in places erroneous. It had failed to consider: (i) the risk that section 102 of the UK Finance Act 1986 would treat the Settlor as having incurred the H Trust's liabilities; (ii) whether the charge over the UK property was an "incumbrance created by a disposition made by [the Settlor]" within section 103 of that Act; and (iii) how the General Anti-Abuse Rule might apply to the 2017 arrangements. The D Trust faced the very IHT exposure the Deed of Exclusion was supposed to prevent. The current trustee applied by originating summons for a declaration that the Deed of Exclusion was void ab initio under section 64A of the Act. The application was dealt with on the papers. The principal issues were: (i) whether the current trustee had standing; (ii) whether the statutory conditions in section 64A(2) were satisfied; (iii) the scope of the court's residual discretion (including the good faith requirement and notification of HMRC); and (iv) whether it was appropriate to determine a section 64A application without an oral hearing. The applicable law Justice Segal adopted the analysis of Justice Kawaley in Maples Trustee Services v AB (In Re Settlements), describing it as "a clear and authoritative summary of the applicable law". Justice Kawaley had identified three strands of the statutory language: 1. the power must be a fiduciary power; 2. but for the mistake the power would not have been exercised in the same way, at the same time, or at all; and 3. the person exercising the power must have failed to take into account relevant considerations, or taken into account irrelevant ones. Justice Segal adopted Justice Kawaley's tentative view (that section 64A contains an implied good faith requirement), reasoning that such a qualification is necessary to keep the jurisdiction within proper bounds and avoid what Lord Neuberger extrajudicially described as giving trustees a "get out of jail free card". He disagreed, however, with Justice Kawaley's observation that the circumstances required for section 64A relief are "likely in many (if not most) cases to be indistinguishable (legal labelling apart) from having to establ...

In the recent decision of Lim Yew Cheng v Guanghua SS Holdings Limited, the BVI Court of Appeal dismissed an appeal against a first instance refusal to stay BVI recognition and enforcement proceedings pending the outcome of litigation in Hong Kong. The judgment is a useful restatement of the demanding test that an applicant must satisfy where it asks the court to put its own proceedings on hold to await the resolution of foreign litigation. In April 2022, Guanghua SS Holdings Limited (Guanghua) obtained a Hong Kong High Court Judgment arising out of two US$80 million loan facilities personally guaranteed by Mr Lim and his son, Lin Minghan. In June 2024, Guanghua commenced recognition and enforcement proceedings in the BVI, which Mr Lim sought to stay, first relying on pending separate Hong Kong proceedings (the Hong Kong Proceedings) and, subsequently a further claim issued in Hong Kong and derivative proceedings brought in the BVI. Mithani J (Ag.) refused both the stay and a related adjournment application, and Mr Lim appealed. The central question on appeal was whether Mithani J, when considering whether it was appropriate to grant stay of the enforcement proceedings on case management grounds, had applied the wrong test by failing to follow Athena Capital Fund SICAV-FIS SCA v Secretariat of State for the Holy See. Ward JA accepted that the single test is whether, in the particular circumstances, it is in the interests of justice to grant a stay. However, drawing on the analysis of Males LJ in Athena Capital, the Court emphasised that the presence of "rare and compelling circumstances" remains a highly relevant factor where the stay sought is to await foreign proceedings. The Court held that, while the "rare and compelling circumstances" formulation is not itself the legal test, "it is only in rare and compelling circumstances that it will be in the interests of justice to grant a stay on case management grounds to await the outcome of foreign proceedings", describing this as a "high threshold" and noting that the usual function of the court is to decide cases, not decline to do so. The Court observed that while the first instance judge did not expressly articulate the test he applied, the factors he relied upon were "plainly relevant" to the interests of justice question under the applicable test. These included the facts that (a) the Hong Kong Judgment had not been appealed, (b) no application had been made to stay the Hong Kong Judgment in Hong Kong, which would have been an obvious and effective way to bring a halt to the BVI enforcement proceedings, and (c) the relief sought in the Hong Kong Proceedings did not seek to set aside the Hong Kong Judgment. In those circumstances, there was no reason to regard the Hong Kong judgment as not final and no reason why the judge could not proceed with the recognition and enforcement claim. The appellant, Mr Lim, also sought to make much of the judge's statement that he had not considered his late evidence in great detail. The Court noted, however, that the judge had been deluged at the eleventh hour with over 100 pages of evidence and more than 2,000 pages of exhibits, comprising allegations yet to be proven at trial in support of the appellant's stay application. The Court found nothing to suggest that the judge had failed to appreciate the appellant's case for a stay; to the contrary, the judge's recital of the background showed that he was well acquainted with the case. Accordingly, nothing before the judge amounted to "rare and compelling circumstances", and his decision sat comfortably within the generous ambit of his case management discretion. The decision is a clear signal that BVI courts will not lightly stay recognition and enforcement of a final foreign judgment to await collateral foreign proceedings, particularly where no stay has been sought in the originating jurisdiction and the foreign challenge does not directly seek to set the judgment aside. Litigants seekin...

In the recent decision of State House Trust v Friend Media Technology Systems the Jersey Royal Court allowed an appeal against the Master's refusal to exclude an opinion from English counsel filed in support of a summary judgment application. Commissioner Sir Michael Birt (who is also a Justice of Appeal of the Cayman Islands Court of Appeal) held that there was no requirement to obtain the leave of the court to obtain evidence from a single expert witness, but that in this instance the opinion was inadmissible, and used the occasion to call for the introduction of a rule equivalent to English CPR 35.4. His analysis of the absence of a requirement for leave raises questions that Cayman Islands attorneys will recognise, because it is not clear that the position under the Grand Court Rules is materially different. Background The proceedings arise out of a shareholder dispute in which three Defendants applied for summary judgment and filed an opinion from English counsel (the Opinion) in support. The Plaintiffs sought to exclude the Opinion – the Master refused, and the Plaintiffs appealed. The judgment Commissioner Sir Michael Birt, hearing the appeal afresh, addressed three issues: 1. whether leave was required; 2. whether summary judgment must be decided on admissible evidence; and 3. whether the Opinion was admissible. He answered yes to the second and no to the first and third issues. It is the first issue – the requirement for leave – that has the most significance for the Cayman Islands. The Plaintiffs argued that Royal Court Rule 6/20(2)(d), which allows the court to "order that not more than a specified number of expert witnesses may be called", read with Practice Direction 17/09, created a leave requirement. The Commissioner rejected that submission. The rule merely empowers the court to limit the number of experts; it does not require leave. The wording is similar to, and Commissioner Birt decided has the same meaning as, the former English Supreme Court Rules Order 38, rule 4, which the English Court of Appeal in Sullivan v West Yorkshire Passenger Transport Executive held gives jurisdiction only to limit numbers, not to exclude expert evidence entirely. The absence of language equivalent to the English CPR 35.4(1), which expressly requires leave, confirmed the position. Commissioner Birt added that he had not reached the conclusion on leave with "any great enthusiasm". He recommended the introduction of a provision equivalent to CPR 35.4, which would impose a simple requirement to obtain the court's leave to submit expert evidence, and this would allow the court to consider admissibility and case management at an early stage. The Cayman position GCR O38, r4 is the Cayman analogue, in materially similar terms to Jersey's RCR 6/20(2)(d): it empowers the court to limit expert numbers rather than imposing a leave requirement. On a strict reading of the GCR, no express leave requirement appears to exist. O38, r36(1) restricts expert evidence unless one of four conditions is satisfied: (i) leave of the court; (ii) agreement of all parties; (iii) an application for a disclosure direction under r37 or r41; or (iv) compliance with automatic directions under O25, r8(1)(b). The third and fourth routes are procedural steps concerning the form and timing of disclosure; they are not applications for permission to call an expert. The party-agreement route is, in particular, difficult to reconcile with a blanket leave requirement. FSD Guide B5.1(a) provides that "[a]ny application for leave to call an expert witness or to serve an expert's report should be made at a case management conference or on a summons for directions". The use of "any" rather than "an" is conditional: it addresses what should happen if such an application is made, not that one must be made. The Guide also uses "should" rather than "must", and as a practice guide issued under the inherent jurisdiction of the court (not a statutory instrument or rule of court...

The Grand Court of the Cayman Islands recently delivered its judgment in In the Matter of New Ruipeng Pet Group Inc, concerning the continuation of the appointment of restructuring officers (ROs) over New Ruipeng Pet Group Inc (the Company). While the outcome was relatively straightforward on the facts, the judgment provides much-needed guidance concerning the grounds that the Court will consider when determining whether to continue the appointment of ROs given it is the first judgment to consider the issue. On 5 December 2025, ROs were appointed to develop and implement a restructuring plan for the Company and its wider corporate group to avoid a potentially insolvent liquidation. Upon appointing the ROs, the Court also directed that a case management conference be scheduled to assess progress with the restructuring plan. By the hearing on 3 March 2026, the ROs had made some progress developing a restructuring plan but had not yet obtained agreement from key stakeholders. Given liquidity pressures faced by the Company, the ROs advised the Court that they intended to pursue interim financing to stabilise the Company while continuing to pursue a longer-term restructuring of its debt. In this context, Justice Asif KC considered whether it was appropriate for the ROs' appointment to continue. As noted by Justice Asif KC, the judgment addresses interesting jurisdictional questions about the nature of the enquiry the Court must undertake when reviewing the continuation of RO appointments as there was previously no authority that directly addressed the Court's supervisory jurisdiction. The Court first considered the judgment of Kawaley J in Re Holt Fund SPC which dealt with an application to discharge ROs and records that where a consensual restructuring is no longer viable, the ROs will have grounds for their removal. Conversely, the potential for a viable restructuring must exist for the appointment of ROs to continue as detailed below. The Court accepted that the dicta of Cresswell J in Re Trident Microsystems (Far East) Ltd, decided in the context of light-touch provisional liquidations, were relevant by analogy. Cresswell J stated that when the Court is asked to adjourn a winding up petition and permit the continuation of a provisional liquidation, the Court is "in effect exercising its discretion to appoint provisional liquidators afresh" and must give due consideration to all relevant factors. Justice Asif KC determined that this approach should also be applied when considering the continuation of RO appointments. In other words, on each occasion the matter comes back before the Court, the Court must be satisfied that the statutory criteria in section 91B of the Companies Act for the appointment of ROs continue to be met. If they are not, the Court is under a duty to discharge the appointment. After establishing the applicable test, the Court approved the continuation of the ROs' appointment for the following reasons: The Company was, or was likely to become, unable to pay its debts.The Company and the ROs intended to present a compromise to creditors.The restructuring remained feasible and continued to be supported by significant stakeholders.The alternative to restructuring, being a winding up of the Company, was highly likely to result in a significantly worse outcome for stakeholders.Importantly, both the ROs and the Company itself supported the continuation of the ROs' appointment. The Court also bore in mind the warning in Re Aubit that the Court must be astute to ensure that a hopelessly insolvent company is not allowed to continue trading to the detriment of creditors and stakeholders simply by seeking the appointment of ROs. However, there was no suggestion by any party that this concern applied to the Company. Justice Asif KC's judgment is significant given the RO regime in the Cayman Islands remains relatively new. The decision serves as an important pronouncement of the obligations that ROs will be required to ...

Litigants and prospective litigants are now armed with two new tools for discovery in the Cayman Islands, thanks to the newly-introduced Rule 7A of GCR Order 24. The new rule, which came into force on 30 March 2026 in the Cayman Islands, provides a structured mechanism to obtain discovery of documents before proceedings are commenced and from a non-party to existing proceedings. Rule 7(A) establishes two distinct categories of application. Under Rule 7(A)(1), a prospective litigant may apply to the Grand Court for discovery prior to proceedings being initiated. This application is made by way of originating summons, and the person against whom the order is sought is named as the defendant to the summons. Meanwhile, Rule 7(A)(2) allows a party to existing proceedings to apply for an order for discovery by a person who is not a party to the proceedings. This application is made by summons and must be served on that person personally and on every party to the proceedings. Both types of application must be supported by affidavit evidence. In the case of pre-action discovery, the supporting affidavit must state the grounds on which it is alleged that the applicant and the named person are likely to be parties to subsequent proceedings before the court. In both cases, the affidavit must specify or describe the documents sought and demonstrate, if practicable by reference to any pleading served or intended to be served, that the documents are relevant to an issue arising or likely to arise in the proceedings and that the respondent is likely to have or have had them in their possession, custody, or power. The court retains wide discretion under Rule 7(A)(5) to make the order for discovery conditional on the applicant providing security for the costs of the respondent, or on such other terms as the court thinks just. The discovery order must also require the respondent to make an affidavit stating whether any documents sought are, or have at any time been, in their possession, custody or power, and if not, when they parted with them and what has become of them. Rule 7(A)(6) contains an important limitation: no person shall be compelled by a discovery order under Rule 7(A) to produce any documents he otherwise could not be compelled to produce: in the case of pre-action discovery, if the subsequent proceedings had already begun; orin the case of non-party discovery, if he had already been served with a writ of subpoena duces tecum to produce the documents at trial. The new Rule 7(A) closely mirrors the language of Hong Kong's Order 24, Rule 7A of the Rules of the High Court, which is modelled on the former English Rules of the Supreme Court that also forms the basis of the Cayman Islands provision. There are however noteworthy differences between Rule 7(A) and the equivalent rules in England and Wales, which are set out in UK CPR 31.16 and 31.17. In the case of pre-action discovery, CPR 31.16(1)(d) additionally requires that the disclosure sought must be "desirable in order to dispose fairly of the anticipated proceedings; assist the dispute to be resulted without proceedings; or save costs." For non-party discovery, CPR 31.17(3) requires that the documents sought "are likely to support the case of the applicant or adversely affect the case of one of the other parties to the proceedings; and disclosure is necessary in order to dispose fairly of the claim or to save costs." Coined as the "cards on the table" approach to litigation by the court, the new discovery measures introduced through Rule 7(A) could reduce time and costs of litigation by allowing the prospects of success of disputes to be assessed earlier. This development represents a significant step in Cayman Islands civil procedure rules and brings the Cayman Islands procedural framework into closer alignment with the position in England and Wales and Hong Kong, where pre-action and non-party disclosure rules are well established. If you are contemplating commencing proceed...

The British Virgin Islands (BVI) has long occupied a pre-eminent position among the world's offshore jurisdictions for corporate formation. Hundreds of thousands of entities are registered under the BVI Business Companies Act, Revised Edition 2020 (BCA), and the territory's appeal as a domicile for holding companies, investment vehicles, and international trading structures shows no sign of diminishing. Yet with such a vast population of registered entities comes an inevitable corollary: a great many companies fall into administrative neglect, are struck off the Register of Companies (the Register), and are dissolved—sometimes without their beneficial owners, creditors, or counterparties appreciating the gravity of what has occurred. A central feature of BVI company law, therefore, is the mechanism by which a struck-off and dissolved company may be restored to the Register and brought back to legal life. Among the various grounds upon which restoration may be sought, one of the most practically significant—and frequently litigated—is restoration at the instance of a creditor. Creditor-led restorations sit at the intersection of corporate law, insolvency practice, and asset recovery, and they raise distinctive procedural, evidential, and strategic questions that reward careful analysis. This article examines the legal framework governing creditor restorations in the BVI, the procedural requirements that must be satisfied, the practical obstacles that creditors routinely encounter, and the emerging judicial solutions that have reshaped this area of practice. A BVI company may be struck off the Register for a number of reasons, but the most common is the prosaic failure to pay annual government fees by the due date. Other triggering events include the absence of a registered agent, the failure to file statutory returns, or the conducting of business without a required licence. The amendments to the BCA that came into force on 1 January 2023 effected a fundamental change to the consequences of a strike off. Under the previous regime, a struck-off company continued to exist in a form of corporate purgatory—suspended but not yet dead—for up to seven years before it was automatically dissolved. That grace period has now been abolished. Under the current regime, a company that is struck off the Register is simultaneously dissolved on the same date. It ceases to exist as a legal entity from that moment. The conflation of these two previously distinct events means that companies no longer enjoy a prolonged window during which restoration is a straightforward administrative matter; instead, the consequences of administrative neglect are immediate and severe. One of the most serious consequences of dissolution is that any property of the company that was not disposed of at the time of strike off and dissolution vests in the Crown as bona vacantia pursuant to section 220(1) of the BCA. Nevertheless, and critically for the creditor, the dissolution of a company does not extinguish its liabilities. Section 215(3)(b) of the BCA expressly preserves the right of any creditor to make a claim against the dissolved company and to pursue that claim through to judgment or execution. Equally, the company and each of its shareholders, directors, officers, and agents remain responsible for any liability that existed before the strike off. The BCA provides two mechanisms by which a struck-off and dissolved company may be restored to the Register. Section 217 provides for administrative restoration by the Registrar of Corporate Affairs (the Registrar), while section 218 provides for restoration by order of the court. Both routes are available to creditors, although their respective requirements and the circumstances in which each is appropriate differ materially. The administrative route does not require a court application and is therefore, in principle, the quicker and less costly option. A creditor seeking administrative restoration must satisfy th...

For a creditor to place a dissolved BVI company into insolvent liquidation, the creditor must first restore the company. Good news to all creditors – AS PNB Banka (in liquidation) v Registrar of Corporate Affairs now confirms that the appointment of a registered agent is not required as a precondition to restoration where the creditor seeks restoration solely for the purpose of placing a dissolved company immediately into insolvent liquidation. Pursuant to section 91 of the BVI Business Companies Act, Revised Edition 2020 (BCA), a company shall at all times have a registered agent, except if it is in liquidation. Section 218A(1) of the BCA provides that: quote start Subject to sub-section (2), on an application under section 218, the Court may – (a) make an order to restore the company to the Register if: (i) the Court is satisfied that a licensed person has agreed to act as registered agent of the company… As such, the practice has been to engage a registered agent for the company, for the purpose of seeking the restoration which is immediately followed by the insolvent liquidation. Unfortunately, as happened to the Claimant in AS PNB Banka (in liquidation) v Registrar of Corporate Affairs, the engagement of a registered agent is often difficult for creditors because creditors will invariably not have all the KYC documents and information that registered agents are statutorily required to obtain. No registered agents were willing to act for the Claimant , leading the Claimant to apply to the Court for restoration without the appointment of a registered agent. Upon considering the parties' arguments, Justice Mangatal accepted the Claimant's submission that a creditor's ability to exercise its rights to seek restoration cannot depend upon the "discretionary commercial risk appetite of private licensed entities". She also noted that the appointment of a registered agent would cause delay and incur unnecessary costs, especially since section 91 of the BCA clearly states that no registered agent is required for a company in liquidation, being what the dissolved company will immediately enter into upon restoration. Justice Mangatal considered what the Claimant was seeking as a "single composite judicial act": restoration of the dissolved company and the appointment of liquidators. The company therefore never exists in a state requiring a registered agent pursuant to the BCA, and hence no registered agent need be appointed for applications of this nature. Conversely, the two-stage approach creates a "circular barrier to enforcement": restoration is required to appoint liquidators, yet the appointment of a registered agent, which may itself depend upon cooperation from those whose conduct may warrant investigation, would become an indispensable threshold condition. Restoration would become impossible "precisely in those cases where corporate management has disappeared or is unwilling to cooperate – circumstances which most strongly justify investigation through insolvency proceedings". Importantly, the judge was satisfied that the Claimant's construction does not dilute the AML objectives underpinning section 218A of the BCA. In the insolvency context, regulatory and investigative oversight is provided by court-appointed liquidators operating under the supervision of the court and within the statutory framework of the Insolvency Act, rather than by a registered agent. In permitting the Claimant's composite solution, the judge interpreted the permissive language in section 218A of the BCA as providing a guide for the exercise of judicial discretion rather than an inflexible jurisdictional precondition incapable of contextual interpretation. While Justice Mangatal considered leave to appeal unnecessary, she nonetheless granted leave to the Registrar of Corporate affairs on the basis "it concerns important issues that are likely to arise again, and the point is not free from difficulty". For now, this judgment removes a very common o...

On 24 March 2026, Justice Segal handed down his long-awaited trial judgment in Laggner v Uphold, dismissing a petition to wind up a Cayman Islands digital money platform on just and equitable grounds. The Petition was filed on 14 June 2022. In the four years since, the matter has been before the Court on three interlocutory occasions, proceeded to a three-week trial, and culminated in a 349-page ruling. It is one of the most substantial contested winding-up petitions to have reached a full trial in the Cayman Islands. The trial judgment is, subject to any appeal, a conclusive determination of the dispute. Uphold Ltd is a Cayman Islands exempted company operating a digital money platform (formerly known as 'BitReserve'). The Company was founded in 2013 and has over 800 shareholders, including significant institutional and individual investors. The dispute at the heart of this case arose from a funding arrangement entered into in mid-2016 (the 2016 Transaction) involving Adrian Steckel, a director and (through his entities, Uphold Holdings LLC and ASP Capital Sub I Inc) a major shareholder. The Petitioners were six minority shareholders, led by William Laggner, a former director of the Company. They alleged that Mr Steckel had, through the 2016 Transaction and a series of subsequent actions, gained de facto control of the Company and caused a dilution of independent shareholders' interests without their knowledge, consent, or any opportunity to participate. The Petitioners' complaints fell into three broad categories. The first was that the 2016 Transaction itself was designed to hand control to Mr Steckel at the expense of other shareholders. The transaction took the form of a revolving credit facility accompanied by a warrant which, upon exercise, gave Mr Steckel's entity approximately 50 per cent of the Company's issued shares on a fully diluted basis. The second concerned subsequent amendments to the revolving credit agreement, in particular the Third Amendment dated May 2017, which permitted the Company to pay interest on the loan by issuing shares to Mr Steckel and Mr James Chen at a fixed (and allegedly artificially low) valuation of US$48 million. This resulted in vast numbers of shares being issued as "PIK interest" without independent shareholders being informed, consulted, or offered the opportunity to participate. The third was that a valuable corporate opportunity, namely the Company's UK banking licence application (which ultimately became TBOL plc), was improperly diverted to Mr Anthony Watson, then a director and the Company's former CEO, in September 2017. Discovery had revealed an undisclosed side agreement pursuant to which Mr Steckel, Mr Thieriot, and Mr Dennings were each to receive personal shareholdings in TBOL. This was the second winding-up petition brought against the Company. A first petition was filed in February 2021 and settled in June 2021, leading to the establishment of a Litigation Committee chaired by Mr Jim Hilton, an independent director appointed in January 2021. When the current Petition was filed on 14 June 2022, the Petitioners sought either a winding-up order under section 92(e) of the Companies Act (the Act) or, as their primary relief, a buy-out order under section 95(3) of the Act. Before the matter reached trial, Justice Segal delivered three interlocutory judgments addressing service, the Company's participation in the proceedings (discussed further in our recent post 'Defanged: Curtailing company participation in winding up proceedings'), and a strike-out application. On the strike-out, Justice Segal dismissed the Respondents' applications, holding that the Petitioners' case was not bound to fail and that the disputed factual and credibility issues required a full trial. The trial took place over three weeks in April and May 2025 and judgment was delivered on 24 March 2026. By the time of closing submissions at trial, the Petitioners' case had narrowed significantly from the wid...

Since the launch of ChatGPT in November 2022, the use of generative AI has proliferated across every domain and litigation is no exception. Courts in various jurisdictions have grappled with the challenges posed by the revolutionary technology and provided important guidance. In March 2026, the Irish Court of Appeal provided its first guidance to lawyers and litigants on the use of generative AI in litigation in Guerin v O'Doherty [2026] IECA 48. The decision concerned an appeal by the defendant, Gemma O'Doherty against the dismissal of her application to strike out a defamation claim. The Court dismissed Ms O'Doherty's appeal. In rejecting all eight grounds of appeal, the Court observed that much of Ms O'Doherty's submissions and complaints addressed matters that either did not arise on the appeal, or were irrelevant to the question whether the court below had erred in refusing to strike out the proceedings (at paragraph 27). Acting in person, Ms O'Doherty used AI to prepare her written submissions for the appeal. However, she did not notify the plaintiff's solicitors in advance that she had done so. The Court found that Ms O'Doherty's submissions contained a number of "hallucinated authorities" which did not exist, or which did not support the propositions they purported to establish. This caused the plaintiff's solicitors to spend time and costs attempting to locate non-existent authorities. The Court emphasised that all parties, whether represented or not, have an obligation not to mislead the court. This includes the obligation not to rely on or advance submissions based on authorities that have no basis in law. The Court also noted that lawyers are subject to professional and ethical obligations which do not apply to litigants in person, but did not address those obligations as they did not arise in the case. To assist parties, the Irish Court of Appeal set out the following general guidance for parties, whether acting through counsel or in person: 1. Parties are entitled to use AI to assist in carrying out research in respect of their case provided they do so responsibly and do not, even inadvertently, mislead the court by advancing propositions or relying upon supposed authorities which have no foundation. 2. In all cases where they do so, they should expressly inform both the other parties and the court of their use of AI. 3. A self-represented party is as equally responsible for the ultimate written or oral work as lawyers. 4. It is important, therefore, that any party who uses AI as part of their research independently verifies the accuracy of their submissions and the authorities cited as supposedly establishing the propositions advanced. 5. No authority should be cited by a party who has not verified that it is a genuine judgment of the court and that it is, or at least arguably is, authority for the proposition contended for. The Court had strong words of caution against the improper use of AI, noting that it could lead to wasted time and costs, cast an unfair burden on the opposing party, potentially bring the administration of justice into disrepute, and mislead the court. The Court emphasised that it had a variety of sanctions at its disposal in cases where parties use AI in breach of these guidelines and where such improper use has the potential to mislead the court. Fortunately for Ms O'Doherty, the Court declined to draw any adverse conclusions against her on that occasion, reasoning that at the time submissions were filed, no guidance was available to litigants in relation to their obligations to the other parties and to the court as regards the use of AI-generated material in proceedings. What it does mean is that going forward, all litigants and lawyers appearing before the Irish courts will have to ensure that they abide by the guidance set out above, or risk adverse inferences and sanctions. Closer to home, at least two published decisions of the Cayman Islands courts have addressed the improper use...

Koa Capital LP and 507 Summit LLC (together, the Petitioners) presented a winding up petition on 16 January 2024 in respect of Fang Holdings Limited (the Company), a Cayman-incorporated entity. The petition was directed principally at the conduct of Tianquan Mo (Mr Mo), listed as the First Respondent, who the Petitioners alleged had engaged in wrongdoing that benefited him personally at the expense of the Company. The Company itself was named as the Second Respondent. Progress was slow. The Petitioners had difficulty effecting service on Mr Mo, and the matter did not come on for a directions hearing until 25 November 2025. By that stage, the Company had engaged separate counsel and wished to participate in the proceedings beyond simply providing discovery. The hearing concerned three questions: 1. Should the proceedings be treated as inter partes between the Petitioners and Mr Mo in his capacity as a member of the Company? 2. To what extent should the Company be permitted to participate? 3. What procedural directions should be given for the future conduct of the petition, including timetabling for defences, reply, discovery, and evidence? The Petitioners argued that the dispute was properly between them and Mr Mo, and that the Company's role should therefore be confined to giving discovery. The Company, on the other hand, contended that the serious allegations against its board necessitated its separate and independent representation, and that its wider shareholder base would be prejudiced if it could not defend the proceedings. The Company invited the Court to permit it to participate and indicated (without supporting evidence) that it would establish a litigation committee for that purpose, to be comprised of independent directors. Mr Mo did not appear. The Court applied Order 3, rule 12(1) of the Companies Winding Up Rules and the established authorities, including the decisions of Justice Foster in Freerider Ltd, Justice Segal in China Shanshui, Justice Richards in Madera Technology Fund CI Ltd, and Justice Segal in Uphold Ltd. Those authorities recognise a "rebuttable distaste" for company participation in shareholder petitions brought on just and equitable grounds, the underlying rationale being that such disputes are typically between shareholders, and the company's involvement risks one faction using corporate funds to fight what is essentially a private battle. The Court characterised the real dispute as one between the Petitioners and Mr Mo. The allegations were that Mr Mo had acted in his own interests at the Company's expense. The Company had not demonstrated that it held a separate and independent position requiring protection. The Company's offer to establish a litigation committee was found to be insufficient. In Uphold, Justice Segal had set out in some detail what the Court expects where a company seeks to participate through a litigation committee: the committee must be able to act independently and without improper interference from the respondent shareholders; the committee members must confirm that they are not conflicted; and the committee must not overstep its remit, leaving the accused shareholders to take the lead in (and bear the cost of) defending the allegations against them. Even in Uphold, where the company had already established a litigation committee and put evidence before the Court going "a long way towards providing the court with the assurances that it needs", Justice Segal still required further evidence of independence. In the present case, by contrast, the Company had provided no evidence at all: no evidence of proposed committee members, no safeguards, and no articulated defence strategy. The Company had also failed to provide a draft order setting out the directions it actually sought, which the Court noted was unhelpful. On the question of Mr Mo's membership, the Court considered section 48 of the Companies Act (2025 Revision), which provides that the register of members constitute...

A long-standing question in offshore trust practice concerns the role of the protector and the nature of their power. When a trust instrument requires a protector's consent before trustees can act, does the protector simply check that the trustees' decision is lawful and rational, or can the protector form its own independent view on whether the proposed course of action serves the beneficiaries' interests? These two competing positions have become known as the "Narrow Role" and the "Wider Role." Under the Narrow Role, the protector satisfies itself only that a reasonable and properly informed body of trustees could lawfully take the decision in question and, if so, must consent. Under the Wider Role, the protector may decide for itself whether to consent by reference to its own assessment of the beneficiaries' interests and the merits of the proposal, even where the trustees' decision is perfectly rational. This debate, which has divided courts and commentators across trust jurisdictions, has now been squarely addressed by the Privy Council in A and 6 Others v C and 13 Others (Bermuda) [2026] UKPC 11. The case arose from a group of family settlements, many of which had been amended in the early to mid-1990s. Those amendments introduced common-form protector provisions requiring the protector's prior written consent for two categories of high-impact decision: capital appointments and dealings with (including the voting of) what were called "Specified Securities" (primarily a large, coordinated shareholding in a family operating company). The trustees proposed a substantial reorganisation that would allocate the trusts' aggregate assets between two family branches in a broadly two-thirds to one-third split. The protectors, having been consulted, indicated they were minded not to approve the proposal. Their objection was not that the trustees' proposal was unlawful or irrational, but rather that, in their own independent assessment, the proposal did not best serve the beneficiaries' interests. This distinction went to the heart of the dispute: under the narrow view, if the protectors could only withhold consent on the basis of the legality and rationality of the trustee's proposed action, and there were no legality or rationality concerns in this proposed split, then the protector's objection had no proper basis; whereas, under the wider view, if the Protector's could bring their own judgment to bear on the merits, it did have proper basis. The trustees responded by seeking the Bermuda court's blessing under Public Trustee v Cooper jurisdiction and, subsequently, a declaration on the proper scope of the protector's role. At first instance, Justice Kawaley held that the protector possessed only the Narrow Role. The reasoning emphasised the trustees' paramount substantive powers, the ancillary character of the consent requirement, the unanimity requirement among joint protectors, and concerns that a Wider Role would create duplication and deadlock. The Court of Appeal for Bermuda affirmed, describing the protector as a "watchdog" whose function was to supervise trustee legality and rationality rather than to substitute its own independent judgment. The appeal to the Privy Council squarely presented the same binary choice. One branch of the family contended for the Wider Role; the other urged the Narrow Role. The trustees and protectors remained neutral. The Board's reasoning proceeded in two stages. First, it addressed the correct analytical framework. Second, it applied that framework to the particular trust instruments before it. The Board's starting point was to reject the premise that courts must choose a single, universal "default role" for protectors in the abstract. Instead, the proper question is always one of construction: what constraints, if any, does the particular trust instrument impose on the protector when exercising a power of consent, bearing in mind any constraints imported by the general law? On that footing...

In THG Plc v Zedra Trust Company, the UK Supreme Court, by 4-1, overturned the Court of Appeal and held that no statutory limitation period applies to unfair prejudice petitions under section 994 of the Companies Act 2006 (the CA). Section 994 of the CA allows a shareholder in a company to petition to the court for a remedy on grounds that the company's affairs are being or have been conducted in a manner that is unfairly prejudicial to the interests of members generally or some of its members, or that an actual or proposed act or omission of the company is or would be unfairly prejudicial. If unfairly prejudicial conduct is established, the court may grant a variety of relief that it thinks fit pursuant to section 996 of the CA, including the payment of compensation. Meanwhile, the Limitation Act of 1980 (the 1980 Act) governs time limits for bringing proceedings in a court of law. Section 8 of the 1980 Act provides that unless an action for which a shorter period of limitation is prescribed elsewhere in the Act, "[a]n action upon a speciality shall not be brought after the expiration of twelve years from the date on which the cause of action accrued." Under Section 9 of the 1980 Act, "An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued." Finally, Section 36 of the 1980 Act disapplies the limitation periods in sections 8 and 9 for "any claim for specific performance of a contract or for an injunction or for other equitable relief", except where the court applies such time limit by analogy in limited circumstances. Zedra acquired a 13.2% stake in THG plc in 2011 when it was a private company under the name of The Hut Group Ltd. In 2019, Zadra filed a petition to the court under section 994 of the CA, alleging that the conduct of THG's affairs was unfairly prejudicial to it in a number of respects. In 2022, Zadra sought to amend its petition to include an allegation that it was unfairly prejudiced by being excluded from a bonus issue of shares made more than six years earlier to some shareholders, seeking equitable compensation for its alleged loss. THG opposed the amendment, arguing that it was "an action to recover any sum recoverable by virtue of any enactment" and therefore time-barred by section 9 of the 1980 Act. The High Court held that the 1980 Act does not impose any limitation period to petitions under section 994 of the CA and as such, the amendment was not time-barred and should be allowed. On appeal, the Court of Appeal ruled that all petitions under section 994 of the CA are subject to a 12-year limitation period under section 8 of the 1980 Act and that claims for monetary relief under section 994 are subject to a six-year limitation period under section 9. As the only remedy Zedra sought was compensation, its claim fell within section 9 and was therefore time-barred. Zedra appealed to the Supreme Court, arguing that neither section 8 nor 9 of the 1980 Act applied to an unfair prejudice petition. In a 4-1 majority decision, the Supreme Court allowed Zedra's appeal, holding that a claim under section 994 is neither an "action upon a speciality" under section 8 of the Limitation Act, nor an "action to recover any sum recoverable by virtue of any enactment" under section 9 of the Act. The central issue in this case on appeal is whether any limitation period applies to unfair prejudice petitions under section 994 of the CA. The Supreme Court decided that: Under section 8 of the 1980 Act, "an action upon a speciality" is, in essence, an action to enforce an obligation which is created by a deed or a statute. Section 994 of the CA, however, does not create any obligations but merely provides for remedies and rights of petition if there is or has been unfair prejudice in the conduct of a company's affairs. Hence, a claim under section 994 is not an action upon a specialty and section 8 does not app...

The trustee was the trustee of two related trusts, the A Trust and the B Trust. As part of a restructuring, the trustee, acting in its capacity as trustee of the B Trust, entered into a phased transaction which entailed the distribution of all the assets of the B Trust to a beneficiary. Thereafter, the beneficiary made a gift of those assets to the trustee in its capacity as trustee of the A Trust. The final step of the transaction was the amendment of the A Trust to reflect the terms of the restructuring. However, the trustee had not taken appropriate UK tax advice before exercising its power to make the distribution to the beneficiary. Had the trustee done so, it would have realised that the distribution would attract unnecessary additional tax liabilities, and it would not have exercised its power in the way that it did. As a result, the trustee applied to the court under section 47A of the Trustee Act 1975 for an order to set aside its exercise of its power and consequential declaratory relief that the distribution from the B Trust to the beneficiary be treated as never having occurred. In order to engage the court's jurisdiction under section 47A, the trustee was required to satisfy the court that (i) when exercising the fiduciary power it did not take into account a consideration of fact or law that was relevant to the exercise of the power and (ii) but for the failure to take that consideration into account the trustee would not have exercised the power at all or would have done so on a different occasion or would have exercised the power in a different manner. Where those conditions are met, the court has a broad and unfettered jurisdiction to set aside the exercise of the fiduciary power either wholly or in part without there being any need to demonstrate that the power was exercised in breach of trust. The effect of making such an order is that the exercise of the relevant power is treated as never having occurred. The evidence demonstrated that the trustee did not take into account a relevant consideration, namely the effect of an aspect of UK tax law, before exercising its power to make the distribution. Had the trustee taken such tax advice, the trustee would not have exercised its power in the way that it did. Consequently, the court found that the conditions for relief under section 47A were met and set aside the exercise of the trustee's power and granted a declaration that the distribution from the B Trust to the beneficiary be treated as if it had never occurred. This decision is a useful reminder to trustees of the care that must be taken when exercising their powers. However, where transactions are entered into under a mistaken understanding of their effect, Bermuda's statutory regime (along with similar ones which exist in the British Virgin Islands and the Cayman Islands) is helpful in enabling trustees to seek the court's assistance to unwind those transactions to avoid unintended consequences.

In a previous blog post, we discussed the first instance judgment in the Phoenix BVI litigation, where Justice Mangatal considered the formalities for becoming a shareholder under s49 of the BVI Business Companies Act, Revised Edition 2020 (BCA). That judgment has now been appealed, with an accompanying application for a stay of execution. On 27 February 2026, in ICM SPC v Jarvis, the Court of Appeal refused the stay. The judgment restates the C-Mobile Services Ltd v Huawei Technologies Co Ltd criteria for stay relief and offers guidance on credibility-based appeals, the limits of using stays as leverage in foreign proceedings and impecuniosity arguments. Phoenix Commodities PVT Ltd (Phoenix BVI) was placed into voluntary liquidation in April 2020. The joint liquidators (JLs) settled a list of members which included Ancile Special Opportunity and Recovery Fund Segregated Portfolio (ASOR), a segregated portfolio of ICM SPC (ICM), a Cayman Islands company. ASOR disputed its shareholder status, arguing that neither it nor any authorised agent had agreed in writing to become a shareholder. The judge at first instance dismissed this application, finding that ASOR had so agreed through its representative. The JLs subsequently issued a call to ASOR for over US$40 million (Call). ICM appealed and sought a stay of the first instance judgment, Order and the Call, though it later narrowed its stay application to the judgment and Order only. Meanwhile, the JLs served a statutory demand on ICM in the Cayman Islands and filed a winding-up petition. The Court of Appeal dismissed the stay application with costs. It applied the five settled principles from C-Mobile Services Ltd in determining ICM's application: consider all circumstances;treat stays as exceptional;require cogent evidence of stifling;apply a balance of harm test; andassess prospects only where strong grounds exist. On its appeal prospects, ICM failed to demonstrate a realistic chance of success. While the appeal raised questions about the interpretation and application of s49 of the BCA, the trial judge's findings were heavily influenced by credibility assessments – in particular, her observations that ICM's main witness was "inconsistent, incredible and convoluted" – and appellate courts are traditionally reluctant to disturb such findings absent exceptional circumstances. On stifling, even if ICM were wound up, then the liquidators could pursue the appeal if they considered it meritorious. ICM's evidence regarding its concerns that a winding up order would result in reputational harm and irreparable damage to itself and a second segregated portfolio, fell short of demonstrating that those fears would actually be realised. On balance of harm, Phoenix BVI's creditors had waited nearly six years for the liquidation to complete. Their prejudice from further delay outweighed ICM's. While a winding-up would mean ICM's "death", liquidators could pursue the appeal alongside their other duties. The Court was also critical of ICM's true objective: using the stay to influence the Cayman winding-up proceedings. This had "unflattering optics" and amounted to seeking a "coercive measure in extra-territorial proceedings". In any event, the BVI judgment has no binding force on the Cayman Islands Court; it is merely persuasive, to be treated as a matter of judicial comity. Finally, impecuniosity was not relied upon, but the Court observed that any such argument requires cogent evidence of means, failing which the application would be "irremediably undermined". This case affirms the five C-Mobile Services criteria for stay applications. Three key takeaways: First, appeals challenging credibility-based findings face a steep uphill battle. Absent exceptional circumstances, appellate courts will not disturb them.Second, courts will scrutinise the true purpose behind a stay application. Using stay relief to gain leverage in foreign proceedings will not be tolerated.Third, impecuniosity argument...

In Lakhany v Hasan, the English High Court* discharged a worldwide freezing order (WFO) for an applicant's failure to adequately discharge their "full and frank" disclosure duty. This case is a welcome reminder of the consequences for artificially elevating a general suspicion of dissipation to a "real risk" before the court. The facts concerned a contractual dispute over an alleged debt of approximately GBP1 million. The remaining background is of only tangential interest: the key takeaway for litigators is how the "real risk of dissipation" was presented to the court. Despite the respondent having relocated from the UK to Pakistan in December 2024 (and contemporaneously informing the applicant's solicitors of this), the applicant gave misleading evidence that the relocation took place months later in March 2025. The applicant invited the court to infer that the respondent had fled the UK to avoid the consequences of any adverse judgment; In respect of a London-based property which the applicant wanted to injunct for the purposes of potential future enforcement, the applicant took four weeks to act on a property alert (being a search to protect a pending purchase) but nonetheless described the alleged risk of dissipation as "compelling". No explanation was given for the delay between the search and the filing of the injunction application (or indeed the hearing of said application, which took place a further four weeks later); and The applicant alleged that the respondent (a) had control over the property; and (b) was seeking to "liquidate his only asset within the jurisdiction" in circumstances where a reasonable public search would have revealed this to be inaccurate: the London-based property was neither the respondent's asset, nor under his control (following the appointment of an LPA receiver on 11 August 2020). To compound the misleading presentation of the case, the applicant's skeleton argument stated that no response to the application for injunctive relief had been received when, in fact, the application had not even been served on the respondent. The Judge hearing the application, unconvinced that the facts supported a conclusion that a risk of dissipation existed, adjourned the hearing to hear from the respondent, but the respondent – by then living abroad – only received two days' clear notice of the adjourned hearing. The hearing proceeded in his absence (despite some informal written representations being made) and the WFO was granted. Remarkably, the applicant's procedural inadequacies persisted post-hearing: neither (a) the transcript of the freezing injunction hearing; nor (b) the subsequent judgment itself were provided to the respondent for over 18 weeks. That transcript recorded the fact that the claimant was only seeking a freezing order in respect of the London property, and not a WFO (as had been granted). When the respondent was provided with a copy of the freezing order on 2 July 2025, he was therefore unaware of the basis upon which the WFO was sought and obtained. In these circumstances, the WFO (granted before the inconsistencies became apparent) could not survive the applicant's complete failure to provide "full and frank" disclosure. As an aside, the applicant attracted further criticism by drafting a freezing order which (a) not only failed to set a return date, but (b) also failed to provide any exception for either (i) living; or (ii) legal expenses. Inadequate notice was given for the injunction hearing; The applicant made misleading representations about the respondent's move to Pakistan and failed to disclose that the property in question was under LPA receivers' control since August 2020; and There was no solid evidence establishing a risk of dissipation. In the circumstances, it's difficult to see how the court could have arrived at another conclusion. The test, of course, for a "real risk of dissipation" is whether "unless restrained by injunction, the defendant will dissipate or dis...

In the recent decision of Unicorn Biotech Ventures One Ltd v Unicorn Biotech Ventures Two Ltd the Grand Court has for the first time considered the issue of whether it has jurisdiction to compel parties to participate in alternative dispute resolution (ADR) against their wishes, and if so, what factors should be taken into account. The Grand Court held that it does have the power to do so and the ultimate test will be whether compelling participation in ADR has a real prospect of furthering the overriding objective by bringing about a fair, speedy and cost-effective solution to the dispute. The application arose in the context of two actions commenced by limited partners of an exempted limited partnership in which they sought declarations regarding the conduct of the fund by the general partner, and the winding up of the fund. There had been a complete breakdown in the personal relationships between those behind the corporate entities which are the LPs and GPs. Notwithstanding proximity to trial, the GP sought orders compelling the parties to attend a mediation at the same time that the parties were due to be exchanging witness statement and preparing for trial. The application raised two issues which had not previously been considered by the Grand Court. Does the Grand Court have the power to compel parties to attend mediation or other means of ADR against their wishes? The Grand Court, following the guidance set out by the English Court of Appeal in Churchill v Merthyr Tydfil, held that it does have inherent jurisdiction to compel parties to participate in ADR in a suitable case. The English Court had observed that courts regularly adjourn hearings and trials to allow the parties to discuss settlement and it would be absurd if they could not to do simply because one of the parties resisted the adjournment. In addition, the court has a long-established right to control its own process including by staying or delaying existing proceedings whilst a settlement process is underway. Justice Asif noted that by virtue of section 11 of the Grand Court Act, the Grand Court has the same jurisdiction as the High Court of Justice in England. His Lordship held that the decision in Churchill was of very persuasive value and should be applied in the Cayman Islands, and it is consistent with the overriding objective to assist the parties to a resolution of their dispute which may be quicker and cheaper than a court-based determination. What are the factors that the Court should consider in determining how to exercise its discretion? Examples of potentially relevant criteria (as raised in Churchill) include the form of ADR proposed, whether parties are represented, the urgency of the case and reasonableness of the delay caused by ADR, whether any delay would vitiate the claim or give rise to limitation issues, the costs of ADR in real terms, relative to the claim and parties' resources, whether there is any realistic prospect of resolution through ADR, any imbalance in bargaining power, and the reasons given by a party not wishing to mediate. However, Justice Asif held that the decision whether to order ADR is multifaceted and declined to lay down any particular criteria to be applied. Ultimately, the test is whether compelling participation in ADR has a real prospect of furthering the overriding objective by bringing about a fair, speedy and cost-effective solution to the dispute and the proceedings. It is not a balance of probabilities test but whether ADR would have a "real prospect of a useful outcome". Outcome The Grand Court declined to compel the parties to attend mediation. The Court considered that the positions taken by the parties to date, and the nature of the dispute and relief sought, meant there was no prospect that mediation would be successful. The GP's application was also late in the day and imposing a mediation at the same time that parties were preparing for trial would be a time-consuming distraction. Overall, the Cou...

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 original proprietary justification for the Shareholder Rule no longer exists and the company shareholder relationship is not one that falls into the joint privilege relationship family. The Board also held, pursuant to its Willers v Joyce jurisdiction (where the Privy Council, not being a court of the United Kingdom but comprising the same Justices those who sit in the House of Lords and the UK Supreme Court, may direct that its decision also represents the law of England and Wales), that the domestic courts of England and Wales should treat this decision as binding and part of the law of England and Wales. This decision is significant for common law jurisdictions – it is binding in Bermuda and England and Wales, and likely to be highly persuasive in other common law jurisdictions such as the Cayman Islands. It provides certainty to company directors seeking legal advice and, in the context of shareholder appraisal proceedings under section 106 of the Bermuda Companies Act (and likely also in the Cayman Islands in shareholder appraisal proceedings under section 238 of the Cayman Islands Companies Act), clarifies that companies are not required to produce legal advice obtained when setting fair value offered to dissenting shareholders. This is the second decision of the Privy Council arising out of the amalgamation of two companies within the Jardine Matheson group and section 106 proceedings issued by the dissenting shareholders seeking a fair value appraisal by the Court. In the present matter on appeal, the dissenting shareholders had sought discovery of legal advice that was given to the Jardine Matheson group when it was setting the $33 value which was offered as fair value to dissenting shareholders who had their shares cancelled. The Company asserted that the advice was covered by legal advice privilege. The dissenters asserted that where a party seeking to access the documents is a shareholder, that will override the usual rules on privilege. They submitted that the Shareholder Rule was in reality a sub-set of joint interest privilege, such that it remains justified notwithstanding the fading away of the original proprietary basis for its creation. The primary issue for the Board was whether the Shareholder Rule exists as a matter of Bermudian law. At first instance, Chief Justice Narinder Hargun of the Court of Appeal of Bermuda rejected the Company's claim to privilege on the basis that the Shareholder Rule was a long established and complete answer to any assertion of legal professional privilege by a company against its shareholders. The Company appealed the decision. The Court of Appeal of Bermuda dismissed the appeal. Justice of Appeal Geoffrey Bell who gave the main judgment, recognised that the Shareholder Rule had not been applied in any decision in Bermuda but that the Court of Appeal had clearly operated on the basis that the rule did exist in at least one previous case. Justice of Appeal Bell regarded the rule, if it existed, as based on joint interest privilege and not 19th century case law (from which the rule originated). Justice of Appeal Ian Kawaley reached a more nuanced conclusion. He rejected the traditional view that the company shareholder relationship was enough to establish an exception to privilege. Rather, it would depend upon all the circumstances and was a flexible and context-based rule rather than status-based rule. President Sir Christopher Clarke agreed with both judgments and added that the joint interest principle, applicable to defeat what would otherwise be a successful claim to legal advic...

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 Appellant was pursuing proceedings against the Respondent in Pakistan. The Respondent had sought to appear in Pakistan in order to contest jurisdiction. The Respondents applied for an anti-suit injunction in the Cayman Courts, seeking to restrain the Appellant from pursuing the proceedings in Pakistan. The Appellant's argument was that the Respondent had submitted to the jurisdiction of Pakistan. The Rule in Geoprosco The Appellant relied on what they called the "Rule in Geoprosco" - a 1975 English Court of Appeal case that held that appearing before a foreign Court (Pakistan) simply to contest jurisdiction counted as submission. Since Geoprosco was decided, it had in fact been reversed in England and Wales by a 1982 statute. Without an equivalent Cayman statute, the question arose: what was the Cayman position? The Board concluded at [52] that Geoprosco "should form no part of Cayman law". Put simply, appearing in a foreign Court to contest jurisdiction did not count as submission. What counts as submission? In deciding what counts as submission, the Board held that Cayman law should reflect the current law in England and Wales, namely the seminal case of Rubin v Eurofinance. Key takeaways The Board's approach to a legislative lacuna in Cayman is noteworthy. The Board analysed academic texts and English Hansard Debates, and compared the solutions of other common law jurisdictions. It was also emphasised that the "Cayman courts may decline to follow English court decisions where there is good reason to do so" [47]. Interestingly, the Board noted that some common law jurisdictions had adopted legislation similar to the English statute, and that others without a legislative equivalent had declined to follow Geoprosco. The Board highlighted a first instance case from Bannister J in the BVI to that effect. The Appellants had not been able to point to a single common law jurisdiction which followed the Rule in Geoprosco. Although a Cayman judgment, the case may well have extra territorial influence in years to come in those jurisdictions where common law solutions have so far been found, but only at the first instance level. Finally, and as a mark of the jurisprudential significance of the BVI, this judgment is one of a number of important decisions in which the Board was assisted by the BVI's the Honourable Dame Janice Pereira, who heard the appeal together with four permanent members.

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 Court of Larnaca issued a summary judgment, effectively recognising and localising the Singapore judgment in Cyprus against the judgment debtors. Subsequent enforcement measures were pursued in Cyprus to target assets of the judgment debtors located within the jurisdiction. One such asset was a villa at the Limassol Marina, for which no separate title deed had been issued. This, in turn, necessitated the filing of an application for the appointment of a receiver over the judgment debtor owning the villa and/or the villa itself. Legal background The Cyprus courts may appoint a receiver by way of equitable execution, where there exists a practical or legal hindrance or difficulty, which prevents enforcement through ordinary statutory means. The courts must be satisfied that the receiver is likely to meaningfully assist in executing the judgment. The appointment is discretionary and grounded in equity principles. This type of order is particularly appropriate, as in this case, when the debtor's interest in immovable property cannot be enforced under existing statutory provisions. The case Harneys argued that there was a legal impediment to execution against the property, as no separate title deed had been issued in the name of the judgment debtor. The property, one of the villas at the Limassol Marina, is held by the judgment debtor under a long-term lease agreement with the Ministry of Energy, Commerce and Industry, as well as a sublease agreement with another Cyprus company. Following the issuance of the summary judgment, the judgment creditor attempted to register a memorandum of judgment over the property, with the intention of initiating its sale under the provisions of the Cyprus Civil Procedure Law, Cap. 6. However, this was not possible. The District Lands Office of Limassol confirmed in writing that such registration could not be effected "since [the judgment debtor] is not the registered owner [of the property] as provided by the relevant legislation." Relying on this confirmation, Harneys argued that the absence of registered title deed meant that no other legal mechanism was available to execute the judgment against the property. This constituted a clear impediment to execution against the property, thereby justifying the appointment of a receiver by way of equitable execution. Ruling The District Court of Larnaca held that, indeed, the absence of a separate title deed created a legal difficulty that prevented the property from being sold through the ordinary execution process. Accordingly, the Court found it necessary to appoint a receiver with powers to take control of the property, assess its condition and proceed with a private sale by one of several possible means: assignment of rights; cancellation of the existing lease and sublease agreements and execution of new agreements with a buyer; or even the transfer of rights from the lease and sublease agreements to a company, with the sale ultimately effected through the sale of that company's shares. The Court concluded that this was an appropriate case for the appointment of a receiver, finding that there was a reasonable prospect that the receiver's involvement and the ancillary powers granted would substantially assist in the execution of the judgment. Consequently, the Court appointed the proposed receiver, an experienced lawyer and insolvency practitioner, and issued ancillary orders to facilitate the execution process. Comment This decision is particularly significant in the context of cross-border litigation and judgment enforcement, as it demonstrates the Cyprus 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 2004 (BCA), provides a mortgagee with security over shares in a BVI company a statutory right to appoint receivers over those shares. That right is typically mirrored in the underlying security instrument. The process for appointing receivers in the BVI is set out in the Insolvency Act 2003 (Insolvency Act). Once appointed, out-of-court receivers act as agent for the mortgagor unless the instrument pursuant to which they are appointed provides otherwise. While receivers are generally personally liable for their actions, this agency affords them a degree of protection as they act in the name of and on behalf of the mortgagor. BVI legislation is relatively light-touch on the powers granted to a receiver, generally deferring to what has been agreed and set out within the instrument pursuant to which the receiver is appointed. In the case of security over shares, the receiver will generally have the power to (1) sell the shares, (2) vote the shares, and (3) take such other steps as they consider necessary or desirable to protect, improve or realise the shares. According to the Insolvency Act, receivers are subject to a primary duty to exercise their powers (1) in good faith and for a proper purpose and (2) in a way they believe (on reasonable grounds) to be in the best interests of the person on whose behalf they are appointed. To the extent consistent with these primary duties, a receiver has a secondary duty to have reasonable regard to the interests of certain interested parties, such as creditors and those with an interest in any equity of redemption. As the number of receiverships increase, so does the range of issues being disputed by mortgagors, often seeking to prevent appointed receivers from exercising their powers. The following trends are beginning to emerge: 1. Challenges to appointment A mortgagor seeking to resist having their security enforced will often start by challenging the validity of the receiver's appointment by reference to the security documents. The relevant documents must have been properly executed and valid, the right to appoint receivers must have accrued (usually contingent upon an event of default) and the necessary processes carried out to notify the mortgagor of the default and give effect to the receiver's appointment. 2. Extent to which the Insolvency Act applies to receiverships over shares in BVI companies owned by an individual or entity located elsewhere The Insolvency Act has an entire part governing the appointment of receivers. However, there is ambiguity as to whether several key provisions, such as those setting out the duties of a receiver, apply to all receivers appointed in relation to assets in the BVI. Various provisions apply specifically to a receiver of a 'company', a company being defined as a company in respect of whose assets a receiver is appointed, unless the context requires otherwise. The overarching definition of a 'company' in the Insolvency Act is restricted to BVI registered companies. Arguably, therefore, where a receiver is appointed over shares in a BVI company, but not the assets of a BVI company, these provisions do not apply. This ambiguity can lead to disagreements over what steps should or should not be taken by receivers and provides fertile grounds for legal disputes. 3. Balancing duties The tripartite nature of receiverships (between mortgagee, mortgagor and receiver) has given rise to extensive authority on how receivers ought to balance the various duties that arise. But there is no one-size-fits all solution: a receiver must evaluate the competing interests ...

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 arbitrated in accordance with the BVI Arbitration Act 2013. Their relationship subsequently broke down and on 21 January 2021, TAX initiated arbitration proceedings in the BVI (the 1st Arbitration). The Final Award of the 1st Arbitration was handed down on 21 February 2023. On 23 March 2023, FDQ filed a Fixed Date Claim Form in the BVI High Court, seeking to challenge the Final Award by way of appeal. On the same date FDQ also filed a notice of application in the High Court for leave to appeal several points of law. The leave has been granted but the appeal is yet to be heard. FDQ's Fixed Date Claim Form was heard in December 2023. On 25 June 2024, Mr Justice Wallbank ordered that the Final Award be set aside (the Setting Aside Order). In his judgment, Mr Justice Wallbank indicated that by setting aside the Final Award, this will give the parties opportunity to refer their disputes to a differently constituted tribunal if they so wish. TAX has since obtained leave to appeal the Setting Aside Order. The appeal also remains to be heard. On 21 July 2025, FDQ started a new arbitration in the BVI (the 2nd Arbitration) with identical subject matter, factual background and issues as the 1st Arbitration. On 29 July 2025, TAX applied to the BVI Court of Appeal for an interim injunction to restrain FDQ from pursuing the 2nd Arbitration. Key legal issues At the heart of this appeal is whether it is just and convenient to grant interim injunctive relief to restrain FDQ from pursuing the 2nd Arbitration while two appeals are pending. The Court's starting point is that it may, in the exercise of its equitable jurisdiction and discretion, grant interim injunctive relief where satisfied that it is just and convenient to do so. While acknowledging the policy imperatives in the Act against judicial interference in arbitration proceedings, the Court reiterated well-established case law, that the Court retains the power to prevent abuse of process in the conduct of Court or arbitral proceedings. It would exercise those powers of control only if necessary, and would do so judicially, not to interfere with an arbitration, but rather to restrain a party from abusing the process of a Court or arbitral tribunal or using either forum in an oppressive or unconscionable manner. This principle applies whether the arbitration is domestic or foreign. Applying the above principles, the Court was be satisfied that it was just and proper to grant an interim injunction, subject to an undertaking in damages based on the following findings: 1. There are two pending appeals before the Court in relation to the 1st 2. Parties agree that the issues to be determined on appeal are similar to some of the issues that will arise in the 2nd Arbitration, including construction and meaning of the license agreement and liability. 3. If the 2nd Arbitration advances at the same time as the appeals, those issues would be considered in parallel. 4. By executing the arbitration agreement, the parties have agreed that the BVI is the seat of arbitration and that the Act is applicable, thereby submitting them to all stages of the arbitration process including any appeals that may be pursued under the Act. The 1st Arbitration will only conclude after the determination of the two appeals. 5. By attempting to pursue the 2nd Arbitration while the 1st Arbitration is in train, FDQ will cause duplication of efforts, expenditure and resources, which would run contrary to the overriding objective of the BVI Civil Procedure Rules (Revised Edition) 2023. 6. More fundamentally, such a course is manifestly...

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 to arbitration? Courts of several leading common law jurisdictions have long grappled with the inherent tension between insolvency proceedings and arbitration. In the past decade, this debate intensified following the decision of the English Court of Appeal in Salford Estates (No.2) Ltd vs Altomart Ltd (No.2)) ('Salford Estates'). Following Salford Estates, certain leading common law jurisdictions have diverged in their approach to the interaction between insolvency and arbitration proceedings. In particular, there has been a marked divergence in the approaches taken by the courts of Hong Kong when compared with the approach taken in England (and the leading offshore jurisdictions closely associated with it). Since 2023, this divergence has crystallised in the landmark decisions of the Hong Kong Court of Final Appeal in Re Guy Kwok-Hung Lam ('Re Guy Lam') and the decision of the Judicial Committee of the Privy Council4 in Sian Participation Corp v Halimeda International Ltd ('Sian Participation'). Now, Hong Kong law, as established in Re Guy Lam and subsequently Re Simplicity & Vogue Retailing (HK) Co Ltd [2024] 2 HKLRD 1064 ('Simplicity'), generally gives primacy to upholding arbitration agreements. The Hong Kong courts will stay winding up proceedings in favour of arbitration, unless there is a strong reason not to do so, such as the dispute being deemed frivolous or an abuse of process. In contrast, English law, following Sian Participation, requires a debtor to demonstrate a bona fide dispute on substantial grounds before a creditor's winding up petition will be dismissed or stayed. Against this backdrop of divergent approaches, the recent decision by the Court of First Instance of the High Court of Hong Kong (the 'Hong Kong Court') in Hyalroute Communication Group Limited v Industrial and Commercial Bank of China (Asia) Limited [2025] HKCFI 2417 represents a significant and welcome development. The case marks the first time the Hong Kong Court had to consider whether an anti-suit injunction should be granted to restrain a creditor from presenting a winding up petition in the Cayman Islands (or another similar common law jurisdiction which applies the Sian Participation approach) despite the existence of an arbitration agreement requiring the dispute to be 'finally resolved' through Hong Kong arbitration. It raises an important question as to the relevant law when the Hong Kong courts determine whether to restrain foreign winding up proceedings in jurisdictions that are now bound, or likely, to apply the approach in Sian Participation in favour of a Hong Kong arbitration. Download the PDF to read the full article. This article first appeared in Volume 22, Issue 6 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com

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 extra-territorial effect. The Company is a Class C long-term insurer registered under the Bermuda Insurance Act 1978 ('IA'), and is a segregated accounts company under section 6 of the Segregated Accounts Companies Act 2000 ('SAC Act'). It has been licenced by the Bermuda Monetary Authority ('BMA') since 2013. Download the PDF to read the full article. This article first appeared in Volume 22, Issue 6 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com