Offshore Litigation Blog

On 9 August 2022, the Grand Court of the Cayman Islands dismissed a winding up petition in Seahawk China Dynamic Fund. In giving his judgment, Justice Doyle took the opportunity to urge practitioners to exercise more discipline and focus on making skeleton arguments and written submissions shorter.

In a recent decision of the Grand Court in Seahawk China Dynamic Fund, Justice Doyle considered whether the need for an investigation can be a self-standing ground for winding up a company. In dismissing the petition, Justice Doyle recorded his preliminary view that the need for an investigation may be a sufficient ground for winding up a company by itself, but he left the issue open for determination, suggesting that this position is not settled law in the Cayman Islands, notwithstanding prior cases on the issue. Harneys acted for the successful respondent to the petition.

In a recent decision of the Privy Council in Ennismore Fund Management Ltd v Fenris Consulting Ltd [2022] UKPC 27, on appeal from the Cayman Islands, the key principles for making an award under the cross undertaking in damages following the discharge of an interim injunction were set out.

In the recent English High Court decision of Brake & Anor v Guy & Ors [2022] EWHC 1746 (Ch) (11 July 2022), a judgment creditor successfully obtained an injunction against a judgment debtor requiring him to draw down his pension, and a third party debt order against the pension trustee in respect of the proceeds of that draw down.

Under the English regime, where one or more meetings of creditors or members has not approved a plan of arrangement by the requisite majority, the court is empowered nevertheless to sanction the plan, by using the cross-class cram-down power. English cases are of interest since they are persuasive in the offshore jurisdictions. Harneys believes that cram downs, if implemented by future legislative change, would make a positive contribution to offshore restructuring.

In Houst Limited [2022] EWHC 1941 (Ch) Mr Justice Zacaroli approved a plan of arrangement under Part 26A of the English Companies Act 2006 cramming down the HM Revenue and Customs (HMRC) who objected to the plan. English cases are of interest since they are persuasive in the offshore jurisdictions. Harneys believes that cram downs, if implemented by future legislative change, would make a positive contribution to offshore restructuring.

In the recent Grand Court case of Jian Ying Ourgame High Growth Investment Fund (In Official Liquidation), Justice Doyle considered an application by Powerful Warrior Limited, a BVI company, that the learned judge ought to recuse himself. He acceded to that request.

In a recent decision, Kelly and Anor v Baker and Anor [2022] EWHC 1879 (Comm), the English High Court has considered the circumstances in which a director may owe fiduciary duties directly to a shareholder. This issue is of direct relevance to the Bermuda, British Virgin Islands and Cayman Islands Courts given the heavy amount of case law on directors’ duties in those jurisdictions.

China Shanshui is a part of a long running multijurisdictional legal saga for the control of one of the largest cement companies in China. In these proceedings, a significant shareholder brought a claim against the company challenging the validity of the company’s issuance of convertible bonds and subsequent issuance of shares. The company’s articles of association empowered the company’s board of directors to make such an issuance, and the conversion and issuance of shares have been approved by ordinary resolutions of the shareholders of the company. However the claimant shareholder alleged that the issuance was made for the improper purpose of diluting its shareholding to enable other shareholders to gain control of the company.

The English commercial court has upheld the “strong public interest” position that commercial parties are at liberty to agree to resolve their disputes by arbitration and should be made to keep that agreement. Further, English courts will not lightly conclude that a dispute between commercial parties is incapable, as a matter of public policy, of being submitted to arbitration.