Offshore Litigation

Blog

Offshore Litigation

Contributors

Jonathan Addo
Jonathan Addo
  • Jonathan Addo

  • Partner
  • British Virgin Islands
Jeremy Child
Jeremy Child
  • Jeremy Child

  • Partner
  • London
Julie Engwirda
Julie Engwirda
  • Julie Engwirda

  • Partner
  • Hong Kong
Peter Ferrer
Peter Ferrer
  • Peter Ferrer

  • Partner
  • British Virgin Islands
Claire Goldstein
Claire Goldstein
  • Claire Goldstein

  • Partner
  • British Virgin Islands
Hazel-Ann Hannaway
Hazel-Ann Hannaway
  • Hazel-Ann Hannaway

  • Partner
  • British Virgin Islands
Nick Hoffman
Nick Hoffman
  • Nick Hoffman

  • Partner
  • Cayman Islands
Andrew Johnstone
Andrew Johnstone
  • Andrew Johnstone

  • Partner
  • Hong Kong
Paula Kay
Paula Kay
  • Paula Kay

  • Partner
  • Hong Kong
Phillip Kite
Phillip Kite
  • Phillip Kite

  • Partner
  • British Virgin Islands
Vicky Lord
Vicky Lord
  • Vicky Lord

  • Partner
  • Shanghai
Paul Madden
Paul Madden
  • Paul Madden

  • Partner
  • Cayman Islands
Henry Mander
Henry Mander
  • Henry Mander

  • Partner
  • Cayman Islands
Ian Mann
Ian Mann
  • Ian Mann

  • Partner
  • Hong Kong
William Peake
William Peake
  • William Peake

  • Partner
  • London
Lorinda Peasland
Lorinda Peasland
  • Lorinda Peasland

  • Consultant
  • Hong Kong
Chai Ridgers
Chai Ridgers
  • Chai Ridgers

  • Partner
  • Hong Kong
Nicola Roberts
Nicola Roberts
  • Nicola Roberts

  • Partner
  • Hong Kong
  • Singapore
Paul Smith
Paul Smith
  • Paul Smith

  • Partner
  • Cayman Islands
Andrew Thorp
Andrew Thorp
  • Andrew Thorp

  • Partner
  • British Virgin Islands
Jessica Williams
Jessica Williams
  • Jessica Williams

  • Partner
  • Cayman Islands
Jayson Wood
Jayson Wood
  • Jayson Wood

  • Partner
  • Cayman Islands

Just and equitable principles considered in Samoan winder

In a recent decision of the Supreme Court of Samoa, Justice Tuala-Warren held that Business Intelligence Investment Limited, an international company in Samoa, should be wound up on the just and equitable grounds.

The petition resulted from a bitter shareholders’ dispute between two brothers over the management of the company and its subsidiaries in the Cayman Islands, Hong Kong and the PRC, resulting in management deadlock across the group and parallel proceedings to wind up in the Cayman Islands, which was stayed pending the result of the Samoan proceedings.

In granting the winding up under s.159(1)(f) of the International Companies Act 1988, the Court adopted a pragmatic approach. The Court held that the “balance of convenience” favours a winding up. The dispute between the brothers caused a breakdown in their relationship, resulting in the loss of trust and confidence and a deadlock within the company. Unless this stalemate is resolved, litigation will continue. It was guided by the case of Mooney v Adventures in Paradise Ltd, whereby the leading authority of Ebrahimi v Westbourne Galleries Ltd and Ors was cited. Mooney held that:

In other words, resort to the just and equitable ground is not limited to the above conventional criteria but has been expanded to cases of mismanagement or misconduct in the affairs of the company. The case law is clear that the Ebrahimi criteria is not exhaustive, as the principle of just and equitable remains a question of fact dependent on the circumstances of each case.

In reaching its conclusion, the Court took the following factors into account:

  1. The loss of confidence and trust between the parties;
  2. The breakdown in the relationship;
  3. Attempts to break the stalemate have been subject to litigation prolonging the stalemate;
  4. No indication of the relationship being restored to its original state;
  5. Accusations of a breach of agreement and dishonesty suggesting a lack of confidence;
  6. No evidence of any further personal communication between parties.

The Court ordered that the winding up of the company be conducted on the basis of the state of affairs which existed before certain disputed corporate actions occurred, and that all corporate changes made thereafter rendered null and void.

The result of this decision is a great leap forward and development in Samoan law, being the first of its kind. Guided by experienced Queen’s Counsel from both parties, the Samoan Court undertook a thorough and careful judicial exercise in considering and putting into effect the provisions of the International Companies Act 1988, making into reality a remedy that otherwise lay dormant in legislation.

Just and equitable principles considered in Samoan winder

Leave A Comment