Abraaj  concerned a long-running dispute within a Cayman Islands exempted limited partnership, Neoma Private Equity Fund IV L.P. (formerly Abraaj Private Equity Fund IV L.P.) (the Partnership). After the collapse of the Abraaj Group and amid allegations of misconduct, a new manager – Neoma Manager (Mauritius) Limited (the Manager) – took over the Partnership.

A limited partner, Abraaj ABOF IV SPV Limited (the LP), challenged the Manager’s calculation of its capital account balance, arguing it had contributed more than was recorded. When no agreement was reached, court proceedings were instigated by the Manager. The LP counterclaimed and brought separate proceedings seeking information and documents from the general partner, Abraaj General Partner VIII Limited (the GP), under section 22 of the ELPA.

The Grand Court granted summary judgment and ordered the GP and Manager to provide the LP a wide range of documents.

Section 22 gives each limited partner the right to “true and full information regarding the state of the business and financial condition” of the partnership. On its face, this is a broad right — but what does “true and full” mean in practice?

The CICA concluded that “section 22 entitlement is a fundamental safeguard to the limited partners”  its purpose “is to enable the limited partners to have a comprehensive understanding of the business decisions being made on their behalf and the financial consequences of those decisions both to the limited partners and to the business itself.” In granting the order, the CICA considered that the Grand Court had taken too broad a view and disagreed that the LP should be entitled to all the information held by the GP or the Manager. The CICA held that:

• The right to information is not unlimited.
• It should be interpreted in a practical and purposeful way.
• Limited partners are entitled to enough information to understand the business and financial health of the partnership – not all documents a general partner has.

Referring to the English case of Inversiones Friera SL v Colyzeo Investors II LP, the CICA concluded that a “functional” approach should be taken. In adopting this approach, the question of which documents are actually needed to understand the partnership’s position becomes key, dispensing with the suggestion that the fact that documents exist gives rise to an entitlement by a limited partner to those documents.

The CICA held that the Grand Court should not have granted summary judgment in this case as there were real disputes concerning whether the requested documents:

• had already been provided to the LP;
• existed at all; and
• were necessary to meet the section 22 obligation.

The CICA confirmed that these sorts of factual disagreements should be resolved at trial, not decided on a summary basis and overturned the first instance decision of the Court.

Section 22 has limits

Section 22 does not require a general partner to share every document or piece of information requested. The general partner’s duty is to provide what is reasonably needed to understand the business and financial position of the partnership.

The context matters

What is “true and full” depends on the structure and complexity of the partnership and what records are available. There is no one-size-fits-all approach.

General partners: be prepared to explain

General partners should keep clear records and be ready to show what documents have been shared, what remains available, and (to the extent relevant) what efforts have been made to retrieve missing information.

LPAs can modify the right

Section 22 is subject to the terms of the partnership agreement. Careful drafting can help manage a general partner’s obligations and the expectations of limited partners, reducing the risk of disputes.

While there are well established principles that confirm the entitlement of the limited partner to information concerning the financial condition of a partnership, there are undoubtedly limits to this. The CICA’s decision clarifies the scope and extent of that information; it is not unlimited and general partners must discharge this obligation reasonably, and within clear boundaries.