In Re Ardent Harmony Fund Inc (In Official Liquidation)(FSD 54 of 2016), Chief Justice Smellie granted an anti-suit injunction restraining the largest creditor of Ardent Harmony Fund Inc (the Fund) from continuing proceedings in the Supreme Court of Barbados in which it had sought a receivership order and the appointment of a bankruptcy trustee over the Fund (the Barbados Proceedings). In his reasons for judgment, the Chief Justice provided a useful examination of the principles which apply to anti-suit injunctions in the insolvency context.


The Fund is a Cayman Islands exempted company which operated as an open ended investment fund. On 26 April 2016, the sole holder of the Fund's voting shares appointed voluntary liquidators to the Fund. As the directors of the Fund were unable to provide a declaration of insolvency, an application was made by a Petition dated 28 April 2016 to bring the voluntary liquidation under the supervision of the Cayman Court. On 10 May 2016, the Court ordered that the liquidation continue under its supervision and appointed Joint Official Liquidators (JOLs) to continue its winding up.

International Tropical Timber Organisation (ITTO) is a Japanese entity, and a member and creditor of the Fund. Subject to the final resolution of its Proof of Debt, ITTO appears to be the Fund's largest creditor, with a claim representing approximately half of the Fund's debt.

The application

Although ITTO had made no objection to the Cayman Islands liquidation proceedings and had not expressed any concern regarding the conduct of the liquidation, it commenced the Barbados Proceedings by a Petition dated 13 May 2016 without notice to the JOLs. ITTO submitted its Proof of Debt in the Cayman Islands liquidation on 19 May 2016.

On 24 May 2016, the JOLs applied without notice to ITTO for an antisuit injunction restraining ITTO from continuing the Barbados Proceedings. In seeking the anti-suit injunction, the JOLs expressed their firm view that nothing had arisen in their investigations to date which suggested there was any need to commence proceedings in Barbados. In particular, the JOLs had not identified any assets or debtors in Barbados, other than the Fund's bank accounts with CIBC FirstCaribbean International Bank, the balances of which had been transferred to accounts opened by the JOLs in the Cayman Islands.

The anti-suit injunction was sought in circumstances where there was a risk that the Barbados Court would appoint a receiver over the Fund's assets at a hearing on 27 May 2016 and that such an appointment would conflict with the role of the JOLs. The JOLs had sought to engage with ITTO on why it had commenced the Barbados Proceedings, but the JOLs remained concerned that it was not clear from ITTO's application or subsequent correspondence with the JOLs that the Barbados Proceedings would benefit the estate or that ITTO had even considered that the conduct of the liquidation in the Cayman Islands had been unsatisfactory. The JOLs' position was that the pursuit of the Barbados Proceedings and the appointment of a bankruptcy trustee would result in confusion for creditors and debtors and increased costs to the estate.

Anti-suit injunctions in the insolvency context

The Chief Justice noted in his judgment that it is "trite principle" that once the Fund was placed into liquidation in the Cayman Islands, it "became vested trustee of its assets for its creditors and this includes assets wherever situate", referring to the Privy Council's decision in Wight v Eckhardt Marine GmbH [2004] 1 AC 147. Accordingly, Smellie CJ explained:

"It follows that the Court has jurisdiction to restrain a creditor over whom it has personal jurisdiction from the institution or continuance of proceedings in a foreign court, where the effect of those proceedings would be to subvert the universal collective process of the liquidation..."

The Chief Justice also referred to the judgment of Lords Sumption and Toulson in the Privy Council in Stichting Shell Pensienfonds v Krys and another [2015] 2 WLR 289 (Stichting Shell). In Stichting Shell, the Privy Council granted an injunction to restrain proceedings commenced in Holland which were an attempt by a creditor of Fairfield Sentry to secure priority over assets held by a Dutch custodian. Lords Sumption and Toulson explained that, in granting an anti-suit injunction:

"The Court does not purport to interfere with any foreign court, but may act personally upon a defendant by restraining him from commencing or continuing proceedings in a foreign court where the ends of justice require."

The "ends of justice" may require the grant of an anti-suit injunction in cases, for example, where the pursuit of proceedings abroad on the same subject matter is "vexatious and harassing of the opposite party"; or where the foreign proceedings are brought in an inappropriate forum or are otherwise "contrary to equity and good conscience". Where a creditor commences foreign proceedings to obtain prior access to an insolvent estate that conduct may amount to vexatious or oppressive conduct. However, as their Lordships explained in Stichting Shell and as the Chief Justice also observed:

"Where a company is being wound up in the jurisdiction of its incorporation, other interests are engaged. The court acts not in the interest of any particular creditor or member, but in that of the general body of creditors and members. Moreover ... there is a broader public interest in the ability of a court exercising insolvency jurisdiction in the place of the company's incorporation to conduct an orderly winding up of its affairs on a worldwide basis, notwithstanding the territorial limits of its jurisdiction."

The Chief Justice stated that the Court is "concerned to act" in such cases to avoid a "free for all" to grab the assets of a company in liquidation.


The JOLs primarily relied on the fact that ITTO had submitted its Proof of Debt to satisfy the Court that it had personal jurisdiction over ITTO. The Chief Justice was satisfied that the Court had jurisdiction, both because ITTO was a shareholder of the Fund and because it had submitted a Proof of Debt. The Chief Justice concluded that it was "obvious" that the appointment of a bankruptcy trustee in Barbados would interfere with the conduct of the Cayman Islands liquidation and would be contrary to the "ordinary principle of international law that only the jurisdiction of a person's domicile can effect a universal succession to its assets", as stated by the Privy Council in Stichting Shell. In the circumstances, the injunction was granted.


The decision is a timely reminder that, in appropriate cases, the Grand Court will act to protect the orderly winding up of Cayman Islands companies for the benefit of the estate. In a similar vein, the Chief Justice was also prepared to make an order for substituted service to allow the Fund to serve ITTO via its Barbados attorneys on the bases that "effecting service on ITTO in Japan may be a time consuming and costly exercise" and that "[t]here is no anticipated prejudice to ITTO in being served ... in that way."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.