With the recent increasing trend of Chinese banks and companies
being directly involved in providing financing, more legal
documents are being drafted in the Chinese language by local
onshore counsel, although many of the companies involved in these
transactions may not be incorporated in the Peoples Republic of
China. Not only are the primary loan documents being drafted in
Chinese, but also the associated financing documents, such as
guarantees, charges, debentures, subordination agreements and
The respective companies laws of Bermuda, the BVI and Cayman do
not expressly deal with the circumstances where security documents
creating charges over the assets of offshore entities are drafted
in languages other than English. In this regard, we are often asked
how to deal with registering foreign language charges in these
offshore jurisdictions. Set out below are our conclusions based on
discussions with the various offshore companies registries and
ongoing best practice.
Public filing: To register a foreign language security document
with the Bermuda Registrar of Companies (the "Bermuda
Registrar") pursuant to Part V of the Bermuda Companies Act
1981 (as amended), a certified copy of the English translation of
such security document is required to be filed with the Bermuda
Registrar along with the relevant registration form (in
The English translation of the foreign language security
document should be certified as a "true and correct
translation of the original charging document" by the
translator who performs the translation. There is no requirement
that the translator be qualified by a professional translating body
and the onshore counsel preparing the security document would be an
appropriate person to provide the certified English
Offshore counsel, such as Appleby, would then prepare the
registration form to be filed with the Bermuda Registrar (in
English, and using the certified copy of the English translation of
the security document). The onshore counsel may then review and
confirm the accuracy of the registration form before it is
Public Filing: To register a charge by a BVI company pursuant to
section 163 of the BVI Business Company Act 2004 (as amended) (the
"BVIBCA"), the BVI Registrar of Corporate Affairs (the
"BVI Registrar") requires only the filing of a
registration form. The underlying security document is not required
to be filed with the BVI Registrar. As is the case with Bermuda,
the BVI registration form must be in English.
In circumstances where a foreign language security document is
concerned (for example in Chinese), offshore counsel possessing
Chinese language capability, like Appleby would prepare the
registration form and the onshore counsel that drafted the security
document would then review and confirm the accuracy of the English
translation prior to the registration form being filed.
Private Filing: Registration of a charge by a BVI company
pursuant to section 162 of the BVIBCA requires the recording of the
particulars of the security document on the register of charges
maintained at the registered office of the BVI company or at the
office of its registered agent.
The particulars on the register of charges must also be in
English. Appleby can translate the relevant information in respect
of the security documents and insert the information on the
register of charges. The onshore counsel may then confirm the
accuracy of the particulars inserted.
Private Filing: Section 54 of the Cayman Islands Companies Law
(2011 Revision) requires a recording of the short description of
the property mortgaged or charged and other related particulars on
a register of mortgages and charges maintained at the Cayman
company's registered office.
Similarly to the BVI private filing approach, the particulars on
the register of mortgages and charges must be in English. Appleby
can translate the relevant information in respect of the security
documents and insert the information on the register of charges.
The onshore counsel may then confirm the accuracy of the
While the registration of security documents will not affect the
validity of a charge, registration may affect priority. As the
various companies laws of Bermuda, BVI and the Cayman Islands do
not deal with foreign language issues, following our suggestions
should ensure foreign language security documents are properly
registered in these jurisdictions.
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.
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The Hon'ble High Court of Bombay has held that where a Scheme of Amalgamation is executed between two companies registered in two different states [...], then the said two orders are two independent instruments.
Lawyers are pretty good at figuring it out quietly and amicably among themselves, without recourse to a public courtroom.
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