Cayman Islands: From Strength To Strength: View From The FSD

Cayman's financial services division of the Grand Court has been a key addition

With the biggest ever trial to come before the Cayman Islands and some major cases clarifying important issues of law regarding investment funds, it has been perhaps the most impressive year yet for the Financial Services Division (FSD) of the Grand Court of the Cayman Islands.

Established in 2009 to provide the special procedures and skills required for issues typically thrown up by the more complex civil cases coming out of the financial services industry, the introduction of the Financial Services Division was a landmark for the judiciary and is a significant differentiating factor for the Cayman Islands legal system.

The FSD's procedures reflect that urgent actions need to be taken from time to time. For example, often there is a requirement for justice to be administered in public, but without the risk of sensitive information being publicly available too early in a case, which could render considerable harm to the businesses involved. Furthermore, the occasions do arise when judicial resources need to be adjusted to match the varying patterns of workload. Video conferencing is used considerably, which reflects the global nature of Cayman financial services in modern markets.

Finance is a highly specialised area and by having dedicated FSD judges with a high level of practical experience, along with judicial expertise, Cayman both demonstrates its value and has cemented its position as the destination of choice for high value, high stakes litigation.

To ensure that the FSD continues to adapt and meet the changing needs of financial and commercial business, a 'Users Committee' has been established to provide open channels of communication and a steady flow of constructive suggestions and dialogue between the FSD, representatives of potential litigants, professional advisors and practitioners. This includes all of the main industry associations and local regulators.

LANDMARK CASES

There is perhaps no better example of complex, multi-faceted, international litigation at present right now than the SAAD litigation, which began in July, turning the world's attention to the Grand Court in Cayman. The case, Ahmad Hamad Algosaibi & Brothers (AHAB) v Al-Sanea and Others, involves worldwide matters and issues arising from the credit crisis involving a large family conglomerate in the Middle East and financial institutions in Saudi Arabia, Bahrain, London, New York, Switzerland and the Cayman Islands. Borrowings from some 118 banks worldwide were central to the matter.

The scale of this case – the largest to be held in Cayman – is evident with the courts blocking out seven months for the trial to be followed by two to three months for deliberations and writing on the judgement. The great and the good of the Cayman legal profession have been advising parties on this mammoth case, with the first complaint was filed back in 2009. Mourant Ozannes, Harneys, Walkers and HSM Chambers are the main Cayman firms involved.

Participants in the litigation have said the trial showcases the Cayman legal profession and the financial industry as a whole, highlighting both the responsiveness of the FSD and the skill of the judges who have received special training for the complex financial matters. It is also seen as demonstrative of Cayman's status as a world class jurisdiction to do business, as much as a leader in the off shore disputes arena.

Another premier case to test the Cayman courts during 2016 was the long running Herald/Primeo Fund litigation which came out of the Maddoff scandal. Primeo was a fund which had invested substantially all of its assets into Bernard L Madoff Investment Securities (BLMIS). In December 2008 when Madoff confessed his fraud, the fund lost around US$750 million and was placed into liquidation. Since then the liquidators Zolfo Cooper have been trying to recover the losses, resulting in various pieces of litigation, including clawback claims by the Maddoff Trustee in both New York and Cayman. Matters were complicated further because although Primeo's investment was originally directly into BLMIS, in 2007 it invested into another fund called Herald which in turn invested into BLMIS. Herald had to be placed into liquidation because the Madoff Trustee was wary of dealing with Herald's management. It ended up in a three way deal with the Madoff Trustee in November 2014, while Primeo brought proceedings against its investment manager in 2014, which were settled and against HSBC its administrator and custodian which were due to go to trial in November 2016.

A recent decision by the Cayman Islands Court of Appeal related to creditor claims. Justice Jones held at first instance that Primeo and other investors who redeedmed on December 1 2008 had valid creditor claims and this decision was recently upheld by the Cayman Islands Court of Appeal, which means that Primeo and the other investors are entitled to be paid out around US$200 million from Herald in priority to other investor claims. Peter Hayden, Managing Partner of Mourant Ozannes in Cayman, said: "It is an important decision because there has long been debate about the interpretation of section 37(7) of the Companies Law, which addresses the circumstances in which investors have creditor claims against a company. The Court of Appeal decision is based on and is consistent with English authority and other Cayman authority, and provides certainty, which is important for investors."

"The case is providing important clarification of the relevant provisions of the Cayman Companies Law," Hayden added. "This will provide greater certainty for investors and should enhance the attractiveness of the Cayman Islands as a domicile for investment funds."

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Cayman Finance
 
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”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Cayman Finance
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions