offshore case digest · about the digest the digest attempts to give the reader a high level...
TRANSCRIPT
JURISDICTION UPDATE - ISSUE NO. 2
BERMUDABRITISH VIRGIN ISLANDSCAYMAN ISLANDSDUBAIHONG KONGLONDONMAURITIUSMOSCOWSINGAPORESÃO PAULOconyersdi l l .com
n MAY 2012 – SEPTEMBER 2012
n ISSUE NO. 2
OFFSHORECASEDIGEST:• BERMUDA • BRITISH VIRGIN ISLANDS • CAYMAN ISLANDS
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ABOUTTHEDIGEST
TheDigestattemptstogivethereaderahighlevelsummaryofthemajorcommercialcasesdecidedinBermuda,theBritishVirginIslandsandtheCaymanIslandsinthelastfivemonths.WehopethattheDigestwillbeausefulreferencetoolforclientsandpractitionerswhoareinterestedinthedevelopmentofcaselawineachofthesejurisdictions.
Thecasesaredigestedbyjurisdiction,foryoureaseofreferencewehavealsocreatedacasesubjectmatterindexonpage15.
JURISDICTION PAGE
Bermuda 3CaymanIslands 4BritishVirginIslands 6
Wewouldwelcomeanyfeedbackandsuggestionsfromreadersonthecontent.IfyouwouldliketoobtainfurtherinformationonanyofthecasesfeelfreetocontactanyoftheConyersDill&Pearmanlitigationteam.
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BERMUDA
BERMUDA
SupremeCourt
May
COMPANIES-WINDINGUP–JPLs’APPLICATIONFORALETTEROFREQUEST–STATUTORYBASISOFJURISDICTION
IntheMatterofSeaContainersLtd.[2012]SC(Bda)26Com(10May2012)
Inthiscase,theCompanyinquestionwaswound-upbyGroundCJinJanuary2010.TheCompanyistheparentoffourUKcompaniesundergoingliquidationproceedingsintheEnglishHighCourt.Assuch,thesettlementoftheseclaimsturnsonissuesofEnglishlaw.
TheJPLs’soughtanapplicationforaLetterofRequesttoseekassistancefromanoverseascourt.TheCourttooktheopportunitytomakeclearthestatutorybasisofjurisdictiontodirectthatliquidatorsmayseekassistancefromanoverseascourtundertheCompaniesAct1981andthecommonlawprinciplesgoverningtheexerciseoftheCourt’sdiscretiontosanctionthatassistance.
First,theCourtacknowledgedthatthereisnodirectauthorityrelatingtotheCourt’sjurisdictiontoissueaLetterofRequest.Assuch,thecourtreferredtosection175(1)(a)oftheCompaniesAct1981whichallowsfortheJPLs’toseekthepermissionoftheCourttobring“any action or other legal proceeding in the name
and on behalf of the company”.Further,itwasnotedthatitisknownpracticeforliquidatorstobringproceedingsbothlocallyandabroad,andthatinsolvencyproceedingsoverseasmaybemotivat-edbyamorepracticalapproachofhavingtheappropriateforumdeterminetheissuesathand.
Second,theCourtpointedoutthattheexerciseoftheCourt’sdiscretionwhenpermittingoverseasassistancefromaforeigncourtisbaseduponcommonlaw.TheCourtfurthernotedthatwhilelettersofrequestinrelationtoobtainingforeignevidenceinlocalcourtsisprovidedforunderOrder39Rule3oftheRulesoftheSupremeCourt,thereishowevernostatutoryequivalentunderinsolvencylaw.Whatismore,theCourtexpressedthattheissueshouldalsobedeterminedbypractical“casemanagement”andthattheCourtshouldtakeintoaccountthemostsuitableforumfordeterminingtheissues.Assuch,theCourtgrantedtheapplicationmade.
June
POSSESSIONORDER–STRIKE-OUTAPPLICATION–RESJUDICATA–FRAUDULENTINVASION-ABUSEOFPROCESS
LJunosvHSBC&KTaylor[2012]SC(Bda)33Civ(29June2012)
Thiscaseconcernedanobjectionbyamortgageeinproceed-ingsissuedbytheBankseekingpossessionandsaleagainstthePlaintiffmortagee.ThePlaintiffsoughtastrike-outapplicationforthefollowingreasons:firstthattheSecondDefendantobtainedapossessionorderintheactionbyfraudulentmeans;secondtheBankobtainedthepossessionorderfraudulently;thirdthepossessionorderwasunenforceablebecauseitfailedtospecifyadateofcompliance;andlastlytheWritofPossessionandallstepstakentoenforceitwereunlawfulandanullitybyvirtueofthefailuretospecifyadateofcompliance.Further,thePlaintiffissuedaSummonsforinterimrelieftorestraintheBankfromexercisingitsrightsofpossessionpursuanttothepossessionorder.
InregardstotheSecondDefendant,alawyer,theCourtstruckouttheclaimunderOrder18rule9(1)(b)oftheRulesoftheSupremeCourt1985and/orundertheinherentjurisdictionoftheCourt,theCourtheldthattheallegationthatthepossessionhadbeenob-tainedfraudulentlybytheSecondDefendantwasboundtofail.TheCourtconsideredwhetherthedoctrineofres judicatawouldapplytotheallegationthatthepossessionorderhadbeenobtainedbyfraudandrefusedtostriketheclaimoutonthatbasis.Howev-er,itdidstrikeouttheclaimagainsttheFirstDefendantonthebasisthatitwasboundtofailandrefusedthePlaintiff’sinjunctionapplicationtorefraintheBankfromexercisingitsrights.Thecasecontainsahelpfulstatementoftheprinciplesofthedoctrineofresjudicatawhenthattermisusedinitswidersense.
July
COMPANIES–WINDINGUPPETITION–INSOLVENCY-NON-AS-SIGNMENTCLAUSE–COLLATERALPURPOSE
IntheMatterofGerovaFinancialGroup[2012]SC(Bda)35Com(6July2012)
Thiscaseconcernedthewinding-uppetitionofthenamedCompany,whichwassoughtbyoneofitscreditors(Maxim).InMarchofthisyeartheSupremeCourthadheldthatMaximhadstandingtopeti-tion.TheCompanyarguedthatMaxim’sproceedingswere“tainted
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byimpropermotives”.FurthermuchoftheCompany’sargumentwasdependentuponthefactthattheothercreditorssupportedtheirmotion;thattheapplicationforwinding-upshouldbere-fused.ThePetitionersoughtawinding-uporderonthebasisthattheCompanyisinsolventonacash-flowandbalance-sheetbasisandthatasanunpaidcreditorisentitledtoawinding-uporderasofright.
ItwasheldthatthePetitionerwasentitledtoanorderthattheCompanybewound-up,butsolelyonthebasisthattheCompanywasunabletopayMaxim’sdebtwhichwasdueandpayableanditgavetheCompanythecompanytimetosecurethepetitiondebt.
TheCourtfirstlyconsideredthethreereasonswhythepetitionshouldbedismissed,asarguedbytheCompany:1)becausetheCompanyhasacross-claimbasedonbreachbyMaximofanon-as-signmentclause;2)becauseMaximlackedsufficientinterestintheproceedinghavingassigneditsclaimtoanotherentity;and3)becausetheproceedingsarebeingpursuedforacollateralpur-pose.Withregardtothebreachofthenon-assignmentagreement,theCourtdidnotfindtheargumentextensiveenoughtodismissthepetition.InrelationtotheargumentofsufficientinteresttheCourtfoundthatMaximdidinfacthavesufficientinterestintheproceedingsastheywereanunpaidcreditorwithapresentlyduedebt.Additionally,onthecollateralpurposeargument,theCourtconcludedthattherewascircumstantialevidencewhichsug-gestedthatthePetitionerwasactingforanimproperpurpose.WhendealingwithsuchallegationstheCourtadoptedananalogywiththeapplicationofthe“cleanhandsdoctrine”incaseswhereinjunctivereliefissought.ItheldthatthePetitionershouldnotbeaffordedreliefwhichgoesbeyondthescopeofthepetitionand“theovertstandinguponwhichthePetitionerrelies”whichwasthenonpaymentofadebtduetothepetitioner.
Furthertotheabove,theCourtdeclinedtomakefindingsastobalancesheetinsolvencywithoutanyexpertevidence.Italsodeclinedtomakeanorderonthebasisofthelossofsubstratumissuesraisedbythecreditorsindicatingthatitwasusuallytheshareholderswhoraisesuchcomplaintsandnotcreditors.TheCourttookintoaccountthefactthatsomeofthecreditorsopposedthepetition.TheCourtfurtherheldthatapaymentunderpressureoflegalproceedingsbytheCompanytoMaximwouldnotconsti-tuteafraudulentpreference.
CAYMANISLANDS
July
COMPANIES–INVESTMENTFUNDS–CONSTITUTIONALDOCUMENTS-SIDELETTERS–PRIVITYOFCONTRACT
IntheMatterofMedleyOpportunityFundLtd.GrandCourtoftheCaymanIslands(FinancialServicesDivision),CauseNo.FSD23of2012,QuinJ.,June21,2012
FintanMasterFund(“Fintan”)investedinMedleyOpportunityFund(the“Fund”)throughitsnominee,NauticalNominees(“Nautical”).Nauticalwastheregisteredshareholder.Fintanhad,initsownrightandname,enteredintoanagreement(the“SideLetter”)withtheFund.TheSideLetterprovidedthatalldistributionstoFintanuponredemption,liquidationorotherwiseshallbepaidincashand,ifcashisnotimmediatelyavailable,throughsecuritiesheldinaseparateliquidationaccountonFintan’sbehalf,theproceedsofwhichwillbedistributedtoFintanincashassuchsecuritiesareliquidated.
DuringthefinancialcrisistheFundfacedarunonredemptionsandpresenteditsinvestorswithtwosuccessiverestructuringplans.Inbothcases,Nautical,onbehalfofFintan,electedtostayinitsshareclass,rescindallpreviousredemptionrequests,andbenefitfromorderlypayoutsthroughquarterlydistributions.
FintanbecamedissatisfiedwiththepaceofthewindingdownoftheFundandNauticalsubmittedaredemptionrequestonbehalfofFintanrequestingtheredemptionofallitsshares.FintantookthepositionthattherestructuringshadnotmodifieditsredemptionrightsundertheSideLetter.TheFundarguedthatNauticalwasnotapartytotheSideLetterandthuscouldnotrelyonit.TheFundfurtherarguedthattheeffectofenteringintotherestructuringagreementswastoreplaceanypre-existingredemptionrights.
TheCourtdeterminedthatwhileNauticalwasthenomineeforFintanandFintanwastheultimatebeneficiary,Nauticalwastheshareholder.TheSideLetter,towhichNauticalwasnotaparty,didnotprovideNauticalwithanyenhancedrightsorfavouredstatusasaregisteredmemberoftheFund.NauticalhadthesamerightsandobligationsasanyotherregisteredshareholderundertheArticles.
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TheunderlyingcommercialpurposeoftherestructuringwastorequireNauticaltoexchangeitsexistingredemptionrightsforperiodiccashdistributionseffectedproratawithallotherinves-torsacceptingthisoption.ThisallowedtheFundtominimizealiquiditysqueezeandavoidedafiresaleofassetsandallowedthememberstobenefitfromtheexpectedrecoveryinassetpricesandavoidadisorderlyscrambleforassetsunderliquidation.Nauticalunderstoodthesetermsandoptedtoacceptthemandisthereforeboundbythem.Theredemptionrequestwasdeclaredinvalidandofnoeffect.
COMPANIES–INVALIDISSUEOFSHARES–MISTAKE–RECTIFICATONOFREGISTER
IntheMatterofS.46oftheCompaniesLaw(2011Revision)andintheMatterofFulcrumUtilityInvestmentsLimited,GrandCourtoftheCaymanIslands(FinancialServicesDivision),CauseNo.FSD82of2012,QuinJ.30July2012
Fulcrumestablishedashareincentiveschemetomotivateitsmanagementteamtoachievecertaintargets.However,anadministrativeerroroccurredwhentheincentiveshareswereissued.Fulcruminadvertentlypurportedtoissuecertainsharesatlessthanparvalue,anddidnotfollowtheproceduresetoutinsection35oftheCompaniesLawtolawfullyissuethesharesatadiscount.Sometimepassedbeforetheerrorwasdiscovered.Inordertoensurethatitsstaffcouldnotbeconsideredliableforanyperceivedunpaidbalanceontheincentiveschemeshares,Fulcrumsoughtadeclarationthattheissueoftheshareswasvoidforillegalityaswellasunderthedoctrineofmistake.Fulcrumwassolventatthetimeoftheapplicationanditscreditorsconsentedto
theapplication.
Section46oftheCompaniesLawpermitsacompanytoapplytotheCourtforanorderthattheregisterofmembersberectifiedandtheCourtmaymakesuchanorderifsatisfiedofthejusticeofthecase.Inthisinstance,theCourtfoundthatthesubscriptionletterswerevoidcontracts,astheyamountedtotheunlawfulissueofsharesatadiscount.Further,QuinJconfirmedthatunderCaymanIslandslawthereisnodistinctiontobemadebetween‘mistakeoflaw’and‘mistakeoffact’.Theshareswereissuedunderamistakethatrenderedthecontractimpossibletoperform.Inthiscase,themutualmistakeofFulcrumanditsmanagementteamresultedinsomethingsubstantiallydifferentfromwhatthepartiesintendedandthoughttheyhadachieved.Accordingly,theapplicationwassuccessfulonbothgroundsandanorderwasmadetorectifytheregister.
August
COMPANIES–INVESTMENTFUNDS–CONSTITUTIONALDOCU-MENTS–SIDELETTERS–PRIVITY–MANNEROFREDEMPTIONOFSHARES–COMPANIESLAWSECTION37
LandsdowneLimitedandSilexTrustCompanyLimitedv.Mata-dorInvestments,EnglefieldHoldingsCorp.andMaritimeGuer-rand-Hermès,GrandCourtoftheCaymanIslandsFinancialSer-vicesDivision,CauseNo.FSD103of2011,Quin,J.23August2012
ThePetitionerswereinvestorsinMatadorInvestmentsLimited,aCaymanIslandsinvestmentfund(the“Fund”).TheFundwasincorporatedwithatypicalformofmemorandumandarticlesofassociation.Thearticlesreferencedaprivateplacementmemo-
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randum(“PPM”)thatcontainedanumberofdetailedprovisions,includingthepowertoimposeagateonredemptionsincertaincircumstances.
TheultimatebeneficialownerofthesharesheldbythePetitioners,Ms.Waters,andtheprincipaloftheFund,Ms.Guerrand-Hermès,wereclosepersonalfriends.Ms.Guerrand-Hermèswasallegedtohavemadecertainrepresentationstoherfriendtotheeffectthatthegatingprovisionsandotherrestrictionsonredemptionsintheconstitutionaldocumentswouldnotapplytoherinvestment:sheshouldbeabletowithdrawasmuchmoneyfromtheFundassheneededeachquarter.Ashareholder’sagreementwascontemplated,butnevercompleted.FollowingabreakdowninthefriendshipandtheretentionofanewfinancialadvisorforMs.Waters,thePetitionersmadearedemptionrequestforalltheirsharesintheFund.TheFundresolvedtoimposea10%gate.TheFundenteredwindingup,andthePetitionerspresentedproofsofdebtforthefullredemptionvalueofalltheirshares.Theproofswererejectedbytheliquidator,whoreliedonthegateprovisions.
TheCourtexpressedsympathyforMs.Waters,acknowledgingthatshewasinducedbyherfriendtoplacehermoneywiththeFundanddescribingherasaverynaïveandunsophisticatedinvestor.However,thePetitionersweretheshareholdersintheFund,andassuchanyagreementbetweenMs.WatersandMs.Guerrand-HermèswouldnotbindtheFundortheliquidatorinrelationtotheredemptionrequestsofthePetitioners.EvenifoneweretoacceptthecontentionthattherepresentationsmadebyMs.Guerrand-Hermèsamountedtoa‘sideletter’,itcouldnotoperatetoachievetheveryoppositeofwhatwasexpresslycontainedintheArticlesandsubscriptiondocuments.TheCourtacceptedthesubmissionthatsection37oftheCompaniesLawprovidesacompleteanswertothePetitioners’submissions.ThissectionrequiresthatthemannerinwhichanyredemptionmaybeeffectedmustbeauthorisedbyorpursuanttotheArticlesandfurtherthetermsandmannerofredemptionmustbesetout(orsufficientlysetout)intheArticles.TheagreementrelieduponbythePetitionersplainlyfallfouloftheseentrenchedrightsandforthatreasoncouldnotbindtheFundortheliquidator.Anypur-portedagreementwasunlawfulandofnoeffect.
BVI
CourtofAppeal
May
INSOLVENCY–BVIAPPEALS–LIQUIDATOR’SREMUNERATION
Pacific China Holdings Limited (the Company) v Grand Pacific
Holdings Limited HCVAO2010/039 (BVI) (Court of Appeal)
Theissueinthiscasewaswhoshouldbeartheultimateliabilityforthejointliquidators’remuneration,costs,feesandexpenses(the“Liquidators’Remuneration”)wheretheirappointmenthadbeensubsequentlysetasidebytheCourtofAppeal.TheappealwastheCompany’sfromthedecisionoftheCommercialJudgewhofoundthathedidnothavejurisdictiontoorderthatape-titioningcreditorbemadeultimatelyliablefortheliquidators’remuneration.TheCompanyarguedonappealthatjurisdictionexistedundereithers.233(4)oftheInsolvencyAct(thestatutoryjurisdictionpoint)oralternatively,intheexerciseoftheCourt’scostsjurisdictionunderCPR64.3(thecostsjurisdictionpoint).Further,itacceptedthattherewasnogoodreasoninprincipleorpolicywhyapetitioningcreditorshouldnotbeorderedtopaytheliquidatorsremunerationespeciallywheretheappointmenthadbeensubsequentlysetasidebecauseithadbeenwronglyobtainedandwasconsequentlyanabuseofprocess.
TheCourtofAppealdidnotagreethattherewasstatutoryjurisdictionascontendedforbytheCompany.Initsviewasuccessfulappealagainstthemakingofawindinguporderresultinginthesettingasideofthatorderdidnotandcouldnotequatetoaterminationoftheliquidationundersection233oftheInsolvencyAct.Whollydifferentconsiderationsareengagedonasection233terminationwhichspecificallystatesthatthecourtmayordertheterminationofliquidationifitissatisfiedthatitisjustandequitabletodoso.
TheCourtofAppealhoweverdidallowtheappealonthecostsjurisdictionpoint.ItheldthattheCourtbyvirtueofrule64.3oftheCivilProcedureRules2000hadthepowertoawardcostsarisingoutoforrelatedtoanyproceedingstoapersonwhoisnotnecessarilyapartytotheproceedings.CruciallyitheldthattheCourthadawidediscretioninallmattersrelatingtoexpenses
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includingthepowerwhennecessarytodirectwhichofthepartiesistobearthecostsoftheremunerationandexpensesofanyprofessionalmanorotherofficerappointedbythecourttoactintheproceedingswhichhavecometoanend.
Theimportanceofthisresultcannotbeoverstated.Untilthisdecisiontherewerenoreportedcasesinthejurisdictionwhichdealtcomprehensivelywiththequestionofliabilityforliquidator’sremunerationinsuchcircumstances,andverylittleinthewayofEnglishorotherCommonwealthauthorityonpoint.ThisisperhapsattributabletothefactthatnotmanyappointmentsofliquidatorsoverBVIcompaniesareultimatelysetasideandsotheissuedoesnotarise.Itmeansthatwhereofficeholdersareappointedbythecourtandtheappointmentorderisunderappeal,partiesseekingtheappointmentareatriskofpayingtheofficeholderscosts.
TheRespondentshaveissuedamotionforleavetoappealthisdecisiontoHerMajestyinCouncil.
June
SHAREREDEMPTION–BVIAPPEAL–MISTAKEOFFACT–CERTIFICATEOFVALUE–RESTITUTION
Quilvest Finance Limited & others v Fairfield Sentry Limited (in Liquidation)HCVAP2011/041-062BVI(CourtofAppeal)June2012
Between1997and2008,FairfieldSentryLimitedhadinvestedalargeportionofitsfundsintoBernardLMadoffInvestmentSecuritiesLLC(“BLMIS”)onbehalfofitsshareholders.ThecollapseofBLMISresultedintheliquidationofFairfieldSentryLimited(“Fairfield”).Fairfield’sliquidatorsbroughtproceedingsintheBritishVirginIslands(andelsewhere)againstformershareholderswhohadredeemedtheirsharesinFairfieldpriortoitscollapse(“theShareholders”).ThearticlesofassociationofFairfieldprovidedthatthepriceatwhichsharesweretoberedeemedwastobecalculatedbyreferencetoFairfield’snetassetvalue(“NAV”)andthatvaluewouldneedtobecertified.Fairfield’sarticlesalsoprovidedthatacertificateofNAV“giveningoodfaithbyoronbehalfoftheDirectors”wastobebindingonallparties.
TheliquidatorsarguedthattheNAVcalculatedforthepurposeoftheredemptionsinquestionhadbeencalculatedunderamistakeoffactsinceBLMISwasinfactoperatingaPonzischemeandFairfield’sinvestmentswerelost,andthereforevalueless,fromthepointatwhichtheywereinvested.ItfollowedthattherelevantNAVwasnilornominalandtheredemptionpriceoughtsimilarlytohavebeennilornominal.TheliquidatorscontendedthattheShareholdershadbeenunjustlyenrichedbytheredemptionatFairfield’sexpenseandwereliabletomakerestitutionofthesumspaidtothemonredemption.
TheShareholdersarguedthatthecertificateastotheNAVinaccordancewiththeprovisionsofthearticleswasconclusiveandbindingonFairfield(the“Articlespoint”).Theyalsoarguedthat,insurrenderingtheirsharesforredemption,theyhadgivengoodconsiderationforthepaymentofthepriceandthatthisconstitutedacompletedefencetotheliquidators’claim(the“Considerationpoint”).
ThesetwoargumentsweretriedasapreliminaryissuebyBannisterJwhofoundinfavouroftheliquidatorsonthearticlespointbutinfavouroftheShareholdersontheConsiderationpoint.OntheapplicationofoneoftheShareholdersforsummaryjudgmentonthebasisoftheJudge’sdeterminationoftheConsiderationpoint,BannisterJthendismissedtheliquidators’claims.
TheliquidatorsappealedtheJudge’sfindingsontheConsiderationpointandonsummaryjudgment.TheShareholdersappealedontheArticlespoint.
TheCourtofAppeal(Pereira,BaptisteJJAandMitchellJA(Ag))dismissedboththeliquidators’appeals.SofarastheArticlespointwasconcerned,theCourtofAppealagreedwithBannisterJ’sconclusion.Itfoundtherehad,asamatteroffact,beenno“certificate”.TheShareholdershadarguedthata“certificate”couldbespelledoutfromvariouscontractnotesissuedbytheFundadministratorsbutBannisterJdismissedthesearguments.Thecontractnotesandotherdocumentswerenotdescribedascertificates,theywerenotsignedandtheirpurposewastoevidencethetermsuponwhichFairfieldwaspurchasingsharesnottocertifyadeterminationofNAVbythedirectors.
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MitchellJA(Ag),givingthejudgmentoftheCourtofAppealonthisissue,agreedwiththeJudgethattherewasnocertificate:thecontractnoteswerenotcertificationsofadeterminationofNAVgivenbythedirectors.
TheCourtofAppealalsoagreedwiththeJudge’sconclusionontheConsiderationpoint.PereiraJA,whogavethejudgmentoftheCourtonthisissue,concludedthattheeffectofthearticlesofassociationwastocreateacontractualobligationonthepartofFairfieldtoredeemthesharesandtopaytheredemptionprice,calculatedasprovided,whichwastriggeredbyasubmissionoftheshareholderofarequestforredemption.Themistake,whichwentonlytotheNAV,thereforepost-datedtheformationofthecontractatapointatwhichthetenderingshareholderhaddoneeverythingwhichitwasrequiredtodoundertheprovisionsofthearticles.This,theCourtheld,gaverisetoadebtatthepointatwhichtherequestforredemptionwastenderedinrespectofwhich,theshareholdershavingfullyperformedtheirpartofthecontract,gavegoodconsideration.
ThisJudgmentisofrelevanceforliquidatorsoffundsseekingtorecoverfrominvestorswhohaveredeemedtheirinvestment.ItisclearthatthefactthattheFundmayhaveinvestedinafraudulentschemewillnot,withoutmore,meanthatredemptionpaymentscalculatedinignoranceofthefraudwillbeforfeited.Itisalsoofwiderinterestbecauseitprovidesanalysisofhowandwhenacompanybecomescontractuallyboundtoaredeemingshareholderandwhatdoesandwhatdoesnotconstitutea“certificate”forthepurposeofabindingcalculationofNAVwherethevalueofsharesistobedetermined.
July
INSOLVENCYACT–BVIAPPEALS–WHETHERASSIGNEEOFREDEMPTIONPROCEEDSCANATTAINTHECHARACTEROFACREDITORWITHLOCUSSTANDITOSEEKLIQUIDATIONOFACOMPANY
Spectrum Galaxy Fund Ltd v Xena Investments Ltd HCVAP2011/40(BVI)(CourtofAppeal)
XenaInvestmentLimited(“Xena”)appliedforandwasgrantedanorderappointingjointliquidatorsoverSpectrumGalaxyFundLtd(“Spectrum”)onthebasisthatXena,asanassigneeofredemptionproceedshadlocusstanditoseektheliquidationofSpectrum.Spectrumappealed.Thesolequestionarisingontheappealwaswhetheranassigneeofredemptionproceedsstoodinabetterpositionthantheredeemingshareholderandbyvirtueoftheassignmentattainedthecharacterofacreditorwithlocusstanditoseektheliquidationofacompany.
ThecourtfolloweditspreviousdecisioninWestford Special
Situations Fund Limited v Barfield Nominees Limited et alandallowedtheappeal.Itheldthataclaimforredemptionproceedsisprecludedbyvirtueofsection197oftheInsolvencyAct(the“Act”)frombeinganadmissibleclaimandcaughtbytheprescriptioncontainedinsection12(c)oftheAct.Section197providesthata“ … member and a past member, of a company may not claim in the
liquidation of a company for a sum due to him in his character as a
member, whether by way of dividends, profits, redemption proceeds
or otherwise….”
WhilsttheCourtacceptedthatXenawasnotamemberoftheSpectrumFund,itwasoftheviewthatallthatsection197soughttodowastocapturethosetypeofclaimswhichapersonmaymakeandwhichwouldonlyarisebyvirtueofthatperson’smembershiporshareholdinginacompanyandthatitwasdescriptiveofthecharacteristicoftheclaim.TheCourtfurtherheldthattheassignmentofaclaimhavingthatcharacteristic(andthereforeanon-admissibleclaim)doesnottherebyconvertitsimplybyvirtueofhavingbeenassigned,intoaclaimofadifferentcharacter.Asaresult,Xena’sclaimasanassigneeoftheredemptionproceedswasfoundtobeanon-admissibleclaimintheliquidationandnotcapablethereforeofconferringonXenathecharacterofacreditorwithlocusstanditoapplyfortheappointmentofliquidatorsoverSpectrum.
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JUDGMENTINDEFAULT–JUDGMENTNOTSERVED–MASTERDISMISSINGAPPLICATIONTOSETASIDEDEFAULTJUDGMENTONTHEBASISTHATTHEAPPLICATIONWASNOTTIMELYNORWASADRAFTDEFENCEEXHIBIT–WHETHERMASTERRIGHTTOAPPLYCPR13.3AND13.4
Anison Rabess and Joyce Rabess v National Bank of Dominica HCVAP2011/30(BVI)(CourtofAppeal)
InthiscasetheAppellant,AnisonRabessandJoyceRabesssoughttoappealtheMaster’srefusaltosetasideJudgmentinDefault.TheJudgmentinDefaultwasneverservedontheAppellantsandinanyeventwasforthewrongamount.InallowingtheappealMitchellJA(AG)heldthatifadefaultjudgmentistobecapableofbeingenforceditmustbepersonallyservedonthedefendants:CPR42.6applies.Furtherthatifitisallegedbyadefendantthatadefaultjudgmenthasbeenenteredagainsthimforanexcessiveamountandthatthejudgmentoughttobesetaside,CPR13.3and13.4donotapplytolimitthediscretionofthemaster.TheLearnedJusticeofAppealfoundthatCPR13.3merelylimitedadefendant’srighttosetasideadefaultjudgmentwhenitisintendedtofileadefence.ApplyingthereasoninginAnthony Eugene v Joseph Jn
Pierre and Joseph Jn Pierre(No.1)et al v The Attorney General et al
Saint Lucia High Court Claim Nos.SLUHCV2004/0097andSLUHCV2006/0708(delivered21stFebruary2007),theJudgeheldthataclaimantwhoobservesthathehasobtainedadefaultjudgmentinanexcessiveamounthasthedutytoapplytosetitasideandtoenterinitsplaceacorrectedjudgment.Adefendantwhohasnothadthedefaultjudgmentservedonhimisentitledex debito
justitiaetoapplyatanytimeuptoandincludinganapplicationfortheenforcementofthejudgment,tohavethejudgmentsetasideonthesamebasis.
CONTRACT–BVIAPPEALS–CONSTRUCTIONOFCONTRACTS–ESTOPPEL–UNJUSTENRICHMENT–TRIALJUDGE’SPRIMARYFINDINGSOFFACT–FUNCTIONOFAPPELLATECOURT
Ocean Conversion (BVI) Limited v Attorney General, Attorney General
v Ocean Conversion (BVI) Limited HCVAP2009/19and2009/20(BVI)(CourtofAppeal)
ThecaseconcernedanagreementbetweentheBVIGovernmentandOceanConversion(BVI)Limited(“Ocean”)forOceantoproducepotablewateruptoamaximumquantityforpublicconsumption.
TheGovernmenthadanoptiontopurchasetheplantforanagreedsumattheendofthefirstseven-yearterm.Iftheagreementwasrenewedforanothersevenyears,attheendofthatperiodtheplantwouldbelongtotheGovernmentwithoutfurtherpayment.Attheendofthefirstsevenyearterm,theGovernmentpurportedtoexercisetheoptiontopurchasetheplant.EventstranspiredthatledOceantobelievethatthecontracthadbeenrenewedforafurthersevenyears.Overthecourseofthefirstandsecondseven-yeartermsandattherequestoftheGovernment,Oceanspentanadditional$4.765millionexpandingtheplantinordertoincreaseOcean’scapacitytoprovidemorepotablewaterforpublicconsumption.TheplantthatwaseventuallyturnedovertoGovernment,morethansevenyearsaftertheexerciseoftheoption,wasnottheoriginalplantsubjecttotheagreement.TheoldplantforwhichGovernmenthadagreedtopaythesumof$1.42millionwasentirelyreplaced.TheGovernmentrefusedtopaytheadditionalsumandclaimeditwasentitledtopossessionoftheplantwithoutcompensationtoOcean.Oceanclaimedtobeentitledtotheadditionalsumof$4.765million.
TheCourtdismissedOcean’schallengetoanorderofthetrialjudgegivingimmediatepossessionoftheplantandallowedOcean’sappealagainstthetrialjudge’sdismissalofitscounterclaimforcompensationforthemoniesspentinreplacingtheoldplantbyanewoneanddirectedaninquiryastothevalueoftheplantasatthedatewhentheOceangaveupdeliverytoGovernmentandfurtherdirectingthattheinitialpurchasepriceof$1.42millionbeoffsetagainstthatvalueasfound.TheGovernment’sappealagainstvariousfindingsoffactbytheCourtbelowwasalsodismissed.
TheCourtheldthatOcean’sexpectationforanextendedtenureorforanallowancefortheexpenditurehadbeencreatedorencouragedbyGovernmentandthatitcouldnothavebeenthecommonintentionofthepartiesthatGovernmentcoulddemandimmediateposses-sionofthenewlyexpandedplantwithoutcompensation.TheCourtapplyingPlimmer and Another v The Mayor, Councillors and Citizens of
the City of Wellington[1884]9App.Cas.699(P.C.)foundthatitwouldbeinequitablefortheGovernmenttoexpectownershipofthenewplanttobetransferredtoitwithoutcompensation.
TheCourtalsofoundthattheconstructionofadisputedcontractwasamatterfortheCourtanddoesnotdependontheunderstandingoftheparties.ThetestappliedbytheCourtinconstruingthedisputedcontractisthatsetoutinBahamas International Trust Company Limited
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and Another v Threadgold[1974]3AllE.R.881andInvestors Compensa-
tion Scheme Ltd. v West Bromwich Building Society[1998]1AllE.R.98wasapplied.
TheCourtcommentedonthefunctionoftheappellatecourtfollowingJanice Reynolds-Greene v Community First Co-operative Credit Union
Antigua and BarbudaHCVAP2008/027(delivered25thOctober2010,unreported),holdingthatitwillnoteasilyinterferewithatrialjudge’sprimaryfindingsoffact,especiallywheresuchfindingsderivedfromseeingandhearingthewitnesses.However,whereafindingwasaninferencedrawnfromprimaryfactsanddependedonthevaluetobegiventotheevidence,theappellatecourtisaswellplacedtodeterminetheproperinferencestobedrawn.
September
PROCEDURE–BVIAPPEALS–STRIKEOUT
Tawney Assets Limited v East Pine Management Limited et al HCVAP2012/07217.(BVI)CourtofAppeal
On17September2012,theCourtofAppealtooktheopportunitytoreassertthewellestablishedprinciplesinthetesttobeappliedforstrikingout,andthebreadthofpowerundercasemanagementpowersinthediscretionofthetrialjudge.TheAppellantbasedaclaimonbreachofcontract,tortforunlawfulconspiracyandunfairprejudiceunders184(i)oftheBVIBusinessCompaniesAct2004.Havingfoundnoarguablecaseforbreachofashareholdersagreementonconstructionofthatagreement,noranyargumentjustifyingafindingofimpliedtermsthetrialjudgeproceededtostrikeoutthemajorityofthestatementofclaim.Indoingsothetrialjudgeresistedthesubmissionthatdespitetherebeingsomeagreementthatthefactspleadedinaidofthebreachoverlappedwithrelevantfactsinsupportoftheunfairprejudiceclaim,thosefactswouldhavetobere-pleadedinsupportoftheonlysurvivingcauseofactionforunfairprejudice.
TheCourtofAppealheldthatthestrikingoutofaparty’sstatementofcase,ormostofit,isadrasticstepwhichshouldonlybeusedinclearandobviouscases,whenitcanclearlybeseen,onthefaceofit,thattheclaimisobviouslyunsustainable,cannotsucceedorinsomeotherwayisanabuseoftheprocessofthecourt.Thecourtmustthereforebepersuadedeitherthatapartyisunabletoprovetheallegationsmadeagainsttheotherparty;orthatthestatement
ofcaseisincurablybad;orthatitdisclosesnoreasonablegroundforbringingordefendingthecase;orthatithasnorealprospectofsucceedingattrial.
Baldwin Spencer v The Attorney General of Antigua and Barbuda
Antigua and Barbuda
High Court Civil AppealNo.20Aof1997followedinrespectofthestrikeouttest.
ThetestastowhentheCourtofAppealwillinterferewiththeexerciseofdiscretionbythejudgebelowwasalsore-stated.TheCourtofAppealwilldosowhenthejudgefailstotakeintoaccountorgivestoolittleortoomuchweighttorelevantfactorsandconsider-ationsortakesintoaccountorisinfluencedbyirrelevantfactorsandconsiderationsandthatasaresultoftheerrororthedegreeoftheerrorinprinciple,thetrialjudge’sdecisionexceededthegenerousambitwithinwhichreasonabledisagreementispossibleandmaythereforebesaidtobeclearlyorblatantlywrong.Inthepresentcasethecasemanagementdecisiontostrikeoutandforcere-pleadingwasdiscretionaryandforthetrialjudgetobestdecide.
Michel Dufour et al v Helenair Corporation Ltd. et al(1996)52WIR188followed.
INSOLVENCYACT–BVIAPPEALS–SUBMITTINGACLAIMINLIQUIDATIONISSUBMITTINGTOTHEJURISDICTIONOFTHEBVICOURT–INSOLVENCYRECOGNITION
Kenneth M. Krys and Johanna Lau (as Joint Liquidators of Fairfield
Sentry Limited, in liquidation) v Stichting Shell Pension Funds HCVAP2011/36(BVI)CourtofAppeal
Inanimportantdecisionreflectingontheuniversalityprincipleofoneliquidationhavingeffectivecrossborderimpactonthegatheringofassets,theCourtofAppealallowedanappealbytheliquidatorsofFairfieldSentry(thelargestfundinvestorintoMadoff,andaBVIcompany)grantingananti-suitinjunctionagainsttheDutchrespondentrestrainingitfromcontinuingDutchproceedingsbasedonpre-judgmentgarnisheeordersobtainedinHollandforthepurposeofelevatingStichtingPensionFunds(“Shell”)toapreferredcreditorpositionoverthegeneralbodyofcreditors.
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BRITISHVIRGINISLANDS
Thisdecisionhastwoparticularfindingsofinterest.Thefirst,apointoflaw,isthatbysubmittingaclaimintheBVIliquidationprocess,ShellhadinfactsubmittedtothejurisdictionoftheBVIinsolvencyprocess.SuchindicatedShell’sacceptanceofthestatutoryschemeundertheInsolvencylawsoftheVirginIslandsforthebenefitofallunsecuredcreditors(foreignandlocal)tobetreatedequally.Second,insupportoftheprinciplesofuniversalityandcrossborderinsolvencyrecognition,theCourtheldthattheendsofjusticeinthecircumstancesofthiscaserequirethattheintegrityoftheCourt’sprocessinthesupervisionandadministrationofthestatutoryschemeundertheInsolvencylawsbeprotected:
“Itisimportantfortheliquidationtobeacollectiveproceedinghavinguniversalapplication,suchthatnoadvantageshouldbegiventoacreditorbecausehehappenstolivein(orinShell’scase,happentohaveaccesstothecourtsof)anotherjurisdiction.”ChiefJusticePeriera,para22.
Ofequalimportancewasthejudicialdiscussionontheprinciplesofanti-suitinjunctiverelief.FollowingwellestablishedprinciplesofAirbus Industrie GIE v Patel & Ors[1998]CLC702andapplyingananalogytostatutoryequivalenttosection183oftheEnglishInsolvencyAct,theCourtofAppealconcluded“thatonaproperapplicationoftheprinciplesandhavingdueregardforcomity,thecircumstancesofthiscasewarranttheexerciseofthejurisdiction.Thiscourtshouldnotflinchfromsodoinginachievingtheendsofjustice.
DISCOVERY–BVIAPPEALS–DOCUMENTSPASSINGBETWEENPARTYANDLEGALADVISERS–WHETHERDOCUMENTSAREPRIVILEDGED–CASEMANAGEMENTDISCRETIONOFTHETRIALJUDGE–BASISONWHICHANAPPEALLATECOURTWILLINTERFERE
Sheikh Mohamed Ali M Alhamrani et al v Sheikh Abdullah Ali Alhamrani
HCVAP2012/26(BVI)CourtofAppeal
SevenbrothersownedaBVIcompany.AdisputearosebetweenthesixappellantsandtheotherbrotherwhichwassettledbythesinglebrotherbuyingallsharesintheCompany.Inthebuy/sellprocesstheAppellantsreceivedadvicefromalawyerengagedbytheCompany.TheRespondentfoundthesedocumentsontheCompany’scomputerequipmentnowownedbyhim.Hewishedtorelyonsuchdocumentsinthesubsequentdisputeastoownership
oftheCompany.TheAppellantsarguedthetermsofengagementwiththelawyeradaptedovertimetobehisadvicetothemasshare-holdersandnottheCompany,andthatsuchvariationtothetermswereauthorisedbythemasdirectors.ThetrialjudgedisagreedandfoundnoprivilegeorconfidentialityandorderedattheCaseManagementhearingthatdisclosurebemade.
OnadecisionofthesingleJusticeofAppealdeliveredon10September2012,theCourtofAppealdismissedanappealfromtheCommercialJudge’sdecision.JusticeMitchellruledthatthedirectorswereunderadutytoactbonafideandintheinterestsoftheCompany,andthatwasnotthecasewheretheytookstepstohavetheCompanyhirealawyertoadviseonegroupofshare-holdersalone.Thiswasnecessarilysowhentherewascompleteoverlapofidentitybetweentheshareholdersanddirectors.Further,thatprivilegecanonlyattachtoaconfidentialdocumentandthattherewasnoconfidentialitybecausethelawyerknewtheadvicewasbeingprovidedtoaCompanynowownedbytheRespondent,andthatthelawyeralsoknewtheRespondentobjectedtotheadvicebeingprovidedtotheAppellantswhenhewaspayingforthatprocess.
TheCourtalsoheldthatthetrialjudgewasperformingacasemanagementfunctioninwhichhewascalledontoexercisediscretioninwhetherornottoallowdiscovery.FollowingthedecisioninDufour and Others v Helenair Corporation Ltd and Others(1996)52WIR188,theCourtheldthatanappealagainstajudgmentofatrialjudgeintheexerciseofajudicialdiscretionwillnotbeallowedunlessthecourtissatisfiedthat(1)inexercisinghisorherjudicialdiscretionthejudgeerredinprinciplebyeitherfailingtotakeintoaccountorbytakingintoaccountorbeinginfluencedbyirrelevantfactorsandconsiderations;and(2)thatasaresultoftheerrororthedegreeoftheerrorinprinciple,hisdecisionexceededthegenerousambitwithinwhichreasonabledisagreementispossibleandmaythereforebesaidtobeclearlywrong.
Theappealwasdetermineddaysbeforethestartofasixweektrialontheunderlyingissuebetweentheparties.TheAppellantshaveaskedforareviewofthedecisionbythefullcourtandthatistobedeterminedonanexpeditedbasis.Itisnotyetclearwhenthathearingwilloccur.
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BRITISHVIRGINISLANDS
BVI
HighCourt
June
PROCEDURE–BVI–STRIKEOUT–PROPERPLEADINGOF“WILLFULDEFAULT”
Appleby Corporate Service (BVI) Limited (as Trustee of the Clef Trust) v
CITCO Trustees (BVI) Limited
TheissueinthiscasewaswhetherCITCOTrusteesBVILimited(CITCO)wasentitledtosummaryjudgmentunderCPR15.2(a)dismissingtheclaimoftheApplebyCorporateServices(BVI)Limited(“Appleby”)onthegroundthatApplebyhadnoreasonableprospectofsucceedingonitsclaimforbreachoftrust;oralternativelyforanorderunderCPR26.3(1)(b)or(c)strikingoutthestatementofclaimonthegroundsthatitdoesnotdiscloseanyreasonablegroundforbringingtheclaimorisanabuseofprocess.TheallegationagainstCITCOwasthatitfailedtomonitortheperformanceofport-folioinrespectofwhichthefundsoverwhichitactedasTrusteeswereadministeredanddeliberatelyorrecklesslyandnegligentlyfailedtoapprisethebeneficiariesofunderperformanceofthein-vestmentswhichresultedinanetreductioninvalueoftheassetsofsomeUS$5.6million.
CITCOsoughttorelyonanindemnityagainstthetrustassetsinrespectofanybreachoftrustwhichitmayhavecommittedinthecourseofitstrusteeship.TheresultitsayswasthatifjudgmentwasgivenagainstCITCOtheamountthatCITCOwouldberequiredtopaywouldbecomeanassetofthetrustandthereforeavailabletosatisfyanyindemnity;sothatanyobligationwouldbeselfcancelling.TheCourtheldthattheindemnityreliedonwassupersededbyamorenarrowindemnitysubsequentlyagreedbetweenthepartiesinadeedofretirementandappointment.ThejudgealsofoundthatbecausetheissueontheapplicationunderCPR15.2(a)iswhetherornottheClaimanthasarealprospectofsucceedingonitsclaim,onceitappearstotheCourtthattheClaimanthasarealprospectofsucceeding,theCourtisnotconcernedwiththepossibilitythattheclaimmightfail.Further,citingLJMillettinArmitage v Nurse[1998]Ch41at252thatthatremainedtruewhethertheriskoffailureisonapointwhichtheCourtconsiderstohavearealprospectofsuccessorsomeotherpoint.
TheCourtalsoacceptedthatwhileaclaimallegingwillfuldefaultmustbeproperlyparticularizedonthosefactsthepleadingwasperfectlyadequatesinceCITCOwastoldincleartermswhatitisallegedtohavedonewrongandthatthatconductamountedtowillfuldefaultonitspart.
UNJUSTENRICHMENT–BVILAW–TOTALFAILUREOFCONSIDERATION–PROPERLAWOFTRANSACTION–WHETHERSUBJECTTOBVILAWORRUSSIANLAW–WHETHERRECOVERYAVAILABLEUNDERBVILAW–WHETHERRECOVERYAVAILABLEUNDERRUSSIANLAW
Fraunteld Management Limited v Featherwood Trading Limited
Thiswasacaseofunjustenrichmentandconflictsoflaw.ThecaseconcernedtwoprominentRussianbusinessmen,aRussiandistilleryandseveraloffshorecompanies.TheClaimantCompanyclaimedthatithadpaidover$13millionintoaCypriotbankaccountbelongingtotheDefendant,aBVIcompany,andreceivednothinginreturn.TheClaimanthadexpectedthatitsaffiliates,inexchangeforthepayment,wouldreceivesharesintheRussiandistillerybuttheshareshadneverbeentransferred.TheClaimantthereforeclaimedthemoneybackundertheprinciplesofunjustenrichment.TheDefendantdidnotclaimanypositiveentitlementtothemoneybutclaimedthat,asamatterofBVIandRussianlaw,itwasnonethelessentitledtokeepthemoney.
Theevidencesurroundingthepaymentofthe$13millionwashighlycontentiousandthe(multiple)witnessesgaveevidenceentirelyviavideolinkfromRussia.
Intheevent,BannisterJwasnottroubledbytheissuespresentedbyRussianlaw,concludingthattheproperlawfordeterminingaclaimofunjustenrichmentwastheplacewheretheenrichmentoccurred.SincetheactualenrichmentoccurredinCyprusandnoevidenceofCypriotlawwasadduced,heconcludedthatBVIlawgovernedthetransactionbydefault.
Further,BannisterJwasabletobasehisconclusions,despitethecomplicatedandcontentiousfactualbackground,onthecoreprinciplesofunjustenrichment,namelythattheClaimantneededonlytoprovethattheDefendanthasbeenenriched,thatitwasunjustandthatitwasattheexpenseoftheClaimant.
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BRITISHVIRGINISLANDS
IntheeventhefoundfortheClaimantandorderedrepaymentofthe$13million.
Thecaseisnotableforexemplifyingtheuseofmoderntechnologyinoffshorecommerciallitigationanddemonstratingthesimplicityofunjustenrichmentasaremedyinoffshoretransactions.
BLACKSWANJURISDICTION–BVILAW–ANTISUITINJUNCTION–WHETHERTOTALFAILUREOFCONSIDERATION–PROPERLAWOFTRANSACTION–WHETHERSUBJECTTOBVILAWORRUSSIANLAW–WHETHERRECOVERYAVAILABLEUNDERBVILAW–WHETHERRECOVERYAVAILABLEUNDERRUSSIANLAW
Inna Gudavadze et al v Carlina Overseas Corporation, Azerbaijan (ACG)
Limited, Ivane Chkhartishville
TheClaimantsclaimtobetheheirsunderGeorgianlawofBadriPatarkatsishvilleandbeneficiallyentitledto49sharesintheFirstDefendant,aBVIregisteredcompanycalledCarlinaOverseasCorporation(“Carlina”).Theseshareswereallottedandissuedon10December2006totheSecondDefendant,IvaneChkhartishvillewhoremainedatthedateofthejudgment,theirlegalowner.TheClaimant’sallegethattheSecondDefendantheldthesharesasbaretrusteesforthem.TheseproceedingswereancillarytoproceedingsthatwereongoinginGeorgiaandbroughtundertheCourt’sBlackSwanjurisdiction.Nosubstantivereliefwasclaimed.
OntheSecondDefendant’sapplicationforsummaryjudgmenttheCourtheldthattheClaimantshadnoprospectofsustainingtheirclaimforpurelyancillaryinjunctionspreventingdealingswiththeCarlinashareholdingssincetheyhadbeenchargedtoAzerbaijan(ACG)Limitedandhavingexecutedanddeliveredablanktransferofshares,theLearnedJudgewasnotabletodealwiththem.TheCourtalsoheldthattheClaimantshadnoprospectofestablishingthatthesecuritygrantedbytheSecondDefendanttoACGwasgrantedinbreachoftrustespeciallysincetheClaimant’soriginalpleadingdidnotevenallegethatbreach.OntheissueoftheCourt’sjurisdictiontograntsummaryjudgmentonwhatinrealitywasaclaimforancillaryrelief,theCourtheldthatthiscasefellwithinthewordingofCPR15.TheLearnedJudgefeltthatevenifhewaswrongonthatthatitisinanyeventclearthatthereisnotandneverwillbeanymaterialtojustifythecontinuationoftheinjunction.
TheSecondDefendantalsosoughtaninjunctionrestrainingtheClaimantsfrompursingtheirproceedingsinGeorgia.TheCourtheldthatwhiletheBVIisobviouslyanappropriateforumfortheresolutionofadisputeastoultimatebeneficialownershipofthesharesinquestion,theauthoritiesareclearthatthatisnotasufficientgroundforthegrantofaninjunctionrestrainingapartyfromcommencingorcontinuingproceedingsinanotherjurisdiction.AdoptingtheanalysisofToulsonLJintheCourtofAppealofEnglandandWalesinDeutsche Bank AG v Highland Crusader
Offshore Partners LLP.
TheLearnedJudgeheldthatthemerefactthatproceedingsareonfootindifferentjurisdictionsisnotitselfasufficientreasonforgrantingananti-suitinjunction.InanyapplicationseekingthestayofforeignproceedingsthepartyseekingtheinjunctionmustshowthattheBVIisclearlythemostappropriateforumandthatitwouldbevexatiousoroppressivefortheotherpartytocommenceorcontinueparallelproceedingsinanotherjurisdiction.Hehastheburdenofestablishingthatjusticerequiresthattheforeignproceedingsbestayed.TheCourtfeltthatitwouldnotbevexatiousoroppressiveeveniftheSecondDefendantwouldnotobtainafairhearinginGeorgia.RelyingonthejudgmentofChadwickLJinAl Bassam v Al BassamtheLearnedJudgefoundthattheimmediateandprobableconsequenceswasthatanyjudgmentobtainedagainsthimasaresultofahearingthatwasunfairwouldbedifficulttoenforceoutsideGeorgia.
TheLearnedJudgeexpressedtheviewthattheCourtplainlycouldnotentertainapplicationstorestrainforeignnationals,whohappentobesubjecttoitsinpersonamjurisdiction,fromtakingproceedingsintheCourtsoftheirhomejurisdictiononthegroundsonlythatthoseCourtscannotbetrustedtotrycasesfairlyor,forthatmatter,thatattendanceattrialbytheapplyingpartywouldbeimpossiblewithoutpersonalrisk.NordidhethinkthatthepositionchangesmerelybecauseadefendanttotheforeignproceedingssubsequentlyinstitutesproceedingsintheBVI.Inhisjudgmenttheissueindecidingwhetherananti-suitinjunctionshouldbegrantedisnotwhethertheapplicantfortheinjunctionwillgetafairtrialabroadbutwhetherthependencyoftheforeignproceedingsintandem(or,possibly,insequence)withproceedingsinthejurisdictioninwhichtheapplicationismadeisinandofitselfvexatiousoroppressive,soastocreateinjustice.
14 • conyersdill.com
BERMUDA|BRITISHVIRGINISLANDS|CAYMANISLANDS
CONTACTUS
Bermuda NarinderK.Hargun
[email protected]+14412994928
BritishVirginIslands MarkForté
[email protected]+12848521113
CaymanIslands NigelK.MeesonQ.C.
[email protected]+13458147392
Editor ChristianLuthi
[email protected]+14412987814
Thisupdateisnotintendedtobeasubstituteforlegaladviceoralegalopinion.
Itdealsinbroadtermsonlyandisintendedtomerelyprovideabriefoverview
andgivegeneralinformation.
AboutConyersDill&Pearman
ConyersDill&PearmanadvisesonthelawsofBermuda,theBritishVirginIslands,
CaymanIslandsandMauritius.Conyers’lawyersspecialiseincompanyand
commerciallaw,commerciallitigation,restructuring,insolvencyandprivate
clientmatters.ThecombinationofConyers’internationalstructureencompassing
11officesinjurisdictionsaroundtheworld,itscultureandunrivalledexpertise
enablesthehighestquality,responsive,timelyandthoroughlegaladvice.Conyers’
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Conyershas550staffandapproximately150lawyers.
conyersdill.com • 15
INDEX
INDEX
CasesbySubject
SECTION:
Companies
Windingup
3 Bermuda-WindingUp-JPLs’ApplicationForALetterOfRequest-StatutoryBasisOfJurisdiction
3 Bermuda-WindingUpPetition–Insolvency-Non-AssignmentClause
6 BVI-Appeals-Liquidator’sRemuneration
8 BVI-Appeals-InsolvencyAct–WhetherAssigneeofRedemptionProceedsCanAttainTheCharacterOfACreditorWithLocusStandiToSeekLiquidationOfACompany
6 BVI-Appeals-InsolvencyAct-SubmittingaClaiminLiquidationIsSubmittingToTheJurisdictionOfTheBVICourt-InsolvencyRecognition
Investmentfunds
4 CaymanIslands-InvestmentFunds-ConstitutionalDocuments-SideLetters-PrivityofContract
5 CaymanIslands-InvestmentFunds–ConstitutionalDocuments-SideLetters–Privity-MannerOfRedemptionOfShares-CompaniesLawSection37
Other
5 CaymanIslands-InvalidIssueOfShares-Mistake-RectificationofRegister
7 BVI-Appeal-ShareRedemptionMistakeofFact-CertificateOfValue-Restitution
INDEX
CasesbySubject
SECTION:
GeneralCivil/Commercial
3 Bermuda-PossessionOrder-Strike-OutApplication–ResJudicata-FraudulentInvasion-AbuseofProcess
9 BVI-Appeals-Contract-ConstructionofContracts-Estoppel-UnjustEnrichment-TrialJudge’sPrimaryFindingsOfFact-FunctionOfAppellateCourt
12 BVI-UnjustEnrichment-TotalFailureOfConsideration-ProperLawOfTransaction-WhetherSubjectToBVILawOrRussianLaw-WhetherRecoveryAvailableUnderBVILaw-WhetherRecoveryAvailableUnderRussianLaw.
Jurisdiction
13 BVI-BlackSwanJurisdiction-WhetherTotalFailureOfConsideration-ProperLawofTransaction-WhetherSubjectToBVILawOrRussianLaw-WhetherRecoveryAvailableUnderBVILaw-AntiSuitInjunction-WhetherRecoveryAvailableUnderRussianLaw.
Procedure
10 BVIAppeals-Procedure-StrikeOut
9 BVI-JudgmentInDefault-JudgmentNotServed-MasterDismissingApplicationToSetAsideDefaultJudgmentOnTheBasisThatTheApplicationWasNotTimelyNorWasADraftDefenceExhibit-WhetherMasterRightToApplyCPR13.3And13.4
11 BVI-Appeals-Discovery-DocumentsPassingBetweenPartyandLegalAdvisers-WhetherDocumentsArePrivileged-CaseManagementDiscretionoftheTrialJudge-BasisOnWhichanAppellateCourtWillInterfere
10 BVI-Procedure-StrikeOut-ProperPleadingOf“WillfulDefault”
BERMUDA
ClarendonHouse2ChurchStreetHamiltonHM11Bermuda
Contact:JohnCollisTel:[email protected]
LONDON
10DominionStreetLondonEC2M2EE
Contact:CharlesCollisTel:+44(0)[email protected]
BRITISHVIRGINISLANDS
CommerceHouse,WickhamsCay1P.O.Box3140RoadTown,TortolaBritishVirginIslandsVG1110
Contact:RobertBriantTel:[email protected]
MAURITIUS
Level3,TowerINexteracomTowersCybercity,EbeneMauritius
Contact:StephenScaliTel:[email protected]
CAYMANISLANDS
BoundaryHall,2ndFloorCricketSquareP.O.Box2681GrandCaymanKY1-1111CaymanIslands
Contact:KevinButlerTel:[email protected]
MOSCOW
DucatPlaceIII6GashekaStreetMoscow125047RussianFederation
Contact:ClaireMcConwayTel:[email protected]
DUBAI
Level2GateVillage4DubaiInternationalFinancialCentreP.O.Box506528Dubai,U.A.E.
Contact:KerriLefebvreTel:[email protected]
SÃOPAULO
EdificioPlatinum,7AndarRuaJerônimodaVeiga384SãoPaulo,SP04536-001Brasil
Contact:AlanDicksonTel:[email protected]
HONGKONG
2901OneExchangeSquare8ConnaughtPlaceCentralHongKong
Contact:ChristopherBickleyTel:[email protected]
SINGAPORE
9BatteryRoad#20-01StraitsTradingBuildingSingapore049910
Contact:TanWoonTiangTel:[email protected]
BERMUDABRITISH VIRGIN ISLANDSCAYMAN ISLANDSDUBAIHONG KONGLONDONMAURITIUSMOSCOWSINGAPORESÃO PAULOconyersdi l l .com