Cayman Islands: Hanging By A Thread: The Re-Modelling Of Modified Universalism

On 10 November 2014, the Privy Council handed down its decision in Singularis Holdings Limited v PricewaterhouseCoopers1, together with its decision in a related case, PricewaterhouseCoopers v Saad Investments Company Limited2, both on appeal from the Court of Appeal in Bermuda.  The decision provides guidance on the application of the principle of modified universalism.  

By way of background, Grant Thornton had been appointed as official liquidators to Singularis Holdings Limited ("Singularis") and Saad Investments Company Limited ("SICL" and together with Singularis, the "Companies") in the Cayman Islands, the Companies' jurisdiction of incorporation.  The liquidators obtained orders in the Cayman Islands pursuant to section 103(3) of the Companies Law (2013 Revision) against PricewaterhouseCoopers ("PwC"), the Companies' auditors registered in Bermuda, requiring PwC to deliver to the liquidators any "property or documents belonging to the Companies" in order to assist the liquidators in tracing assets.  PwC took the position, which was not contested by the liquidators, that as a matter of Cayman Islands law, the requirement to produce documents pursuant to orders made under section 103(3) of the Companies Law, was not sufficiently broad to include PwC's internal working papers because those documents would not be considered as "belonging to" the Companies.  This is the generally accepted interpretation of section 103(3) of the Companies Law, albeit this interpretation of the section has never been tested.  

The liquidators subsequently obtained recognition of their appointment to Singularis from the Bermudan Court and an order winding up SICL in Bermuda.  The liquidators then sought the production of PwC's internal working papers in reliance upon (i) section 195 of the Bermudan Companies Act 1981, which applied to SICL as a company being wound up in Bermuda, and (ii) the common law principles of modified universalism applicable in insolvency proceedings, in respect of Singularis.  In both cases, the liquidators considered that the orders which could be made by the Bermudan Court requiring PwC to produce documents and information would be wide enough to include PwC's internal working papers and would not be limited to documentation or information belonging to the Companies.  This is because section 195 of the Bermudan Companies Act 1981 is in broader terms than section 103(3) of the Cayman Islands Companies Law.  

At first instance and on appeal, the liquidators obtained the relevant orders against SICL, but ultimately the Privy Council found that there was no jurisdiction to wind up SICL in Bermuda, that the liquidation should be stayed and that consequently the orders requiring the production of information and documents (which were based on the premise that SICL was being wound up in Bermuda) could not stand.  

In respect of Singularis, no winding up order was ever sought in Bermuda and the application for the production of information and documents was based on common law principles only.  At first instance, the Supreme Court in Bermuda made the orders sought against PwC on the basis that there was a common law power to do so "by analogy with the statutory powers contained in section 195 of the Companies Act".  The Bermudan Court of Appeal disagreed and reversed the decision.  The Privy Council was therefore asked to consider the following questions on the Singularis appeal:

(a)   Did the Bermudan Court have a common law power to assist a foreign liquidation by ordering the production of information in circumstances where (i) the court had no jurisdiction to wind up Singularis and (ii) its statutory power to order the production of information was limited to cases where the foreign company was being wound up in Bermuda? 

(b)   If such a power exists, can it be exercised in circumstances where an equivalent order could not have been made by the foreign court where the liquidation was proceeding? 

In considering these questions, the Privy Council was obliged to address the apparent conflict between Cambridge Gas v Committee of Navigator Holdings and Rubin v Eurofinance and to give guidance as to whether the principle of modified universalism as articulated by Lord Hoffman in Cambridge Gas was correct.  By a three to two majority, the Privy Council found that in principle there was a common law power to assist a foreign court by ordering the production of documentation and information to facilitate the collection of assets in a liquidation.  However, the Privy Council found that this power was not exercisable in circumstances the liquidators could not have obtained similar relief in their home jurisdiction. 

The following points can also be taken from the majority Privy Council decision: 

(a)   The general principle of modified universalism identified in Cambridge Gas has been upheld in theory and nothing in Rubin purported to say otherwise. 

(b)   However, the principle is much more limited in scope than articulated in Cambridge Gas.  In particular, the "golden thread" of modified universalism in insolvency proceedings does not mean that the domestic court has a common law power to assist the foreign court by doing whatever it could have done in a domestic insolvency.  This is because the principle of modified universalism is subject to local law and local public policy and the domestic court can only ever act within the limits of its own statutory and common law powers.  To this extent Cambridge Gas is overruled; the first instance decision in the Cayman Islands case of Irving H Picard and Bernard L Madoff Investment Securities LLC v Primeo Fund is wrong and the earlier Privy Council decision (on appeal from the Cayman Islands) Al Sabah v Grupo Torras SA is approved. 

(c)   In this regard, just because there would be a statutory power to make a particular order in a domestic insolvency, does not mean that a similar power automatically exists at common law so as to be available to a foreign office holder seeking assistance.  However, equally, the existence of a statutory power does not necessarily exclude the common law.  It will only do so where the "...statutory scheme can be said to occupy the field.  This will normally be the case if the subsistence of the common law power would undermine the operation of the statutory one, usually by circumventing limitations or exceptions to the statutory power which are an integral part of the underlying legislative policy."  The Grand Court reached a similar conclusion in Primeo. 

(d)   In the absence of a statutory power available to a foreign office holder, the question therefore becomes how far the common law should be developed to make the relevant power sought by the foreign office holder available to assist the foreign court.  The Privy Council considered that this does not admit to a single universal answer and depends on the nature of the power that the court is being asked to exercise.  The Privy Council therefore limited their consideration to the assistance sought in this case, namely the production of information and documentation.  

(e)   Given that Singularis was not being wound up by the Bermudan Court, section 195 of the Bermudan Companies Act 1981 did not apply and there was therefore no statutory power available to assist the Cayman liquidators under Bermudan law.  However, the majority of the Privy Council considered that there was a common law power to compel the production of information in oral or documentary form that was necessary (i) for the administration of a foreign winding up and/or (ii) to identify and locate the assets of the company.  

(f)   This power was subject to the following limitations: 

(i)   It is only available to assist foreign court appointed officers or equivalent public officers in an insolvency.  It is not available on a voluntary winding up, which is essentially a private arrangement that is not conducted by a court officer.  

(ii)   The power exists for the purpose of enabling the foreign court to surmount the problems posed in a worldwide winding up of the company's affairs by the territorial limits of the foreign court's powers.  Therefore the power does not allow foreign liquidators to do something that they could not do under the law pursuant to which they were appointed.  

(iii)   It is only available where necessary for the performance of the foreign office holder's functions. 

(iv)   The order must be consistent with the substantive law and public policy of the assisting court.  It follows that the power is not available for purposes which are properly the subject of other schemes for the compulsory provision of information, e.g. obtaining information for the purpose of actual or anticipated litigation. 

(v)   The exercise of the power is conditional upon the liquidators paying the third party's reasonable costs of compliance. 

As a result, the appeal was dismissed because the liquidators would not have had the power to require PwC to produce this documentation under Cayman Islands law. 

The Privy Council were not asked to consider whether auditors' working papers did or did not constitute the property of Singularis.  The liquidators had accepted that they did not.  However, interestingly, two members of the Privy Council stated that they wanted to express their doubt as to whether information which PwC acquired solely in their capacity as Singularis' auditors could be regarded as belonging exclusively to them simply because the documents in which they recorded that information were working papers and as such PwC's property.  It remains to be seen whether liquidators will seek to rely on these obiter statements in future applications pursuant to section 103(3) of the Companies Law to endeavour to obtain internal working papers from auditors. 


[2014] UKPC 36.

[2014] UKPC 35.

[2007] 1 AC 508.

[2012] UKSC 46.

[2013] 1 CILR 164.  See our update of 27 March 2013 entitled Jurisdiction and Applicable Law in Cayman Cross Border Insolvency Cases for further information.

[2005] 2 AC 333.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Caroline Moran
Events from this Firm
28 Apr 2016, Webinar, George Town, Cayman Islands

A topical discussion on recent updates covering some of the more frequently asked questions around FATCA and CRS.

29 Jun 2016, Webinar, George Town, Cayman Islands

This webcast focuses on the impact FATCA and CRS are having on structured finance vehicles set up in the BVI, Cayman Islands and Ireland and covers in detail the impending reporting and notification deadlines in each of these jurisdictions.

11 Aug 2016, Webinar, George Town, Cayman Islands

Our panel of experts will reflect on the impact of LLCs in the month since the first available registration date and discuss why the LLC was introduced and how it can be used to help our clients.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.