Dec 2024
As the Grand Court of the Cayman Islands is set to close for 2024, we reflect on some of the large-scale cross-border insolvency and restructuring proceedings and complex commercial disputes dealt with in the jurisdiction during 2024.
Statistics from the Grand Court
The Grand Court, which has jurisdiction for civil and criminal matters, has five divisions: (1) Financial Services; (2) Family; (3) Criminal; (4) Admiralty; and (5) Civil.
As the Cayman Islands continues to be one of the leading jurisdictions in the world for financial services, it is not surprising that our research reveals that the Financial Services Division was the most active of these five this year, with approximately 320 new proceedings filed in 2024. These proceedings related to a diverse range of matters including capital reductions, schemes of arrangement, company restorations, and winding up petitions.
As at 6 December 2024, we understand that the Grand Court had delivered 196 written judgments in 2024.
Significant Cases Handled by Conyers
The Conyers Cayman Islands Litigation and Restructuring attorneys were involved in a range of complex cross-border engagements both at first instance and appellate level over the course of the year, including multiple appearances in the Privy Council and Court of Appeal. Some noteworthy cases from 2024 are highlighted below.
- High-value shareholder disputes (see, for example, Virginia Solution SPC Ltd in which Conyers acted for the successful respondent at Privy Council level, In the Matter of TFKT True Holdings where Conyers continues to act for the Petitioner in relation to multi-jurisdictional litigation and RBH Holdings v Juniper Life Sciences which involves allegations of breach of duty);
- Novel and ground-breaking officeholder mandates (see, for example, Re Kingkey Financial International (Holdings) Limited and Oakwise Value Fund SPC, which both dealt with the interaction between the Restructuring Officer and Provisional Liquidation regimes);
- Merger and appraisal actions (see, for example, Changyou.com Limited which deals with the question of whether appraisal rights are available in a “short-form” merger. A decision of the Privy Council on this question is pending);
- Contested dissolutions (see, for example, Lung Ming Mining Co., Ltd in which the Court of Appeal provided helpful guidance on the meaning of a “complete” winding up for the purposes of Section 152 of the Companies Act and Cosmic Glory where a restoration of a dissolved entity was resisted by the Conyers team);
- Injunctive relief in aid of foreign arbitrations (see, for example, In Minsheng Vocational Education Company Limited v Leed Education Holding Limited and Ors in which the Court of Appeal considered for the first time the scope of the Cayman Court’s jurisdiction to grant injunctive relief in aid of foreign arbitrations under section 54 of the Arbitration Act 2012. An application for leave to appeal to the Privy Council is pending); and
- High-profile redemption issues (see, for example, In the Matter of HQP Corporation Limited which considered: (i) whether a shareholder who had been induced by a fraudulent misrepresentation to subscribe for shares in a company could claim damages against that company in its liquidation; and (ii) if so, how such claims would rank in the liquidation of the company. A decision of the Court of Appeal is pending. See also Apollomics Inc and LetterOne v Eisler in relation to questions concerning redemption claims).
Additional Cayman Islands Decisions of Note
The following are also noteworthy decisions from the Privy Council over the course of the year.
- Tianrui (International) Holding Company Ltd (Appellant) v China Shanshui Cement Group Ltd (Respondent) (Cayman Islands) [2024] UKPC 36: The Privy Council, allowing the appeal, held that a shareholder has a personal remedy against a company where the board of directors has allotted shares for an improper purpose and this has negatively affected the shareholder.
- Kuwait Ports Authority and another v Mark Eric Williams and 2 others [2024] UKPC 32: In this appeal, the Privy Council clarified the test for determining whether a limited partner in a Cayman Islands exempted limited partnership (ELP) is entitled to bring a derivative action on behalf of the ELP. The Privy Council ultimately dismissed the appeal, finding that, inter alia, the limited partners had the right to bring the derivative action because the general partner had failed to bring proceedings without cause.
Other Significant Events in 2024
From a Cayman Islands litigation, insolvency and restructuring perspective, there were also various notable events in 2024, including the following.
- The Cayman Islands bench was bolstered by the appointments of Mr Justice Jalil Asif KC and Mr Ben Tonner KC as a Judge and Acting Judge of the Grand Court, respectively.
- The Companies Act was amended to introduce a streamlined administrative process to approve a proposed capital reduction. A solvency statement, special resolution and the proposed Minute of Order can now be submitted to the Registrar of Companies to register the capital reduction and issue the certificate of reduction. This amendment promotes lower costs to clients and a reduced amount of time for the approval of capital reductions. Under the previous regime, a Cayman company seeking to reduce its share capital was required to obtain approval from the Court. The specific date for the implementation of these reforms is yet to be announced.
- There were numerous amendments made to the Judicial Committee (Appellate Jurisdiction) Rules Order 2009. One of the most significant amendments is that, at the time of filing an application for permission to appeal, the applicant must now file the full permission to appeal bundle. Under the previous regime, the applicant had a further 21 days to file the bundle after the application was made. The amendments also introduce a new online case management portal through which documents will be filed and served and communications from the Court will be sent. New Practice Directions will be published in 2025 to capture these amendments to the rules.
Conclusion
As we reflect on the year 2024, we also look forward to the year ahead and continuing to serve new and existing clients. There have been a number of important and novel points of law that were subject of Court of Appeal and Privy Council decisions throughout the year. We anticipate that the Cayman Islands will continue to go from strength to strength in 2025.