Offshore Litigation Blog

The Cayman Islands Grand Court has awarded indemnity costs in respect of an abusive application for the deferral of a company’s dissolution upon the completion of its voluntary liquidation: In re Skye Assets Fund SPC (in Voluntary Liquidation).

The High Court in England has held that a defendant company may rely on public law defences in opposition to a petition seeking the winding up of the company on public interest grounds: The Commissioners for His Majesty’s Revenue and Customs v Purity Limited.

The recent Cayman Islands case of In the Matter of TFKT True Holdings provides valuable insight to the factors considered by the Grand Court when determining whether to grant a stay of a winding up petition pending the determination of parallel proceedings in Hong Kong.

In Performance Insurance SPC the Grand Court recently considered the approach that official liquidators should take when valuing contingent claims. The Court held that the right approach is to estimate a figure for the contingent liability on a full indemnity basis. The liquidator is not entitled to fix the contingent property rights of creditors at any less than the maximum sum that might reasonably be incurred.

It is an established principle of insolvency law that the passage of time does not prevent claims which were not statute-barred at the date of insolvency from being proved later during the insolvency, even though the limitation period has in the meantime expired. This principle derives from the English decision of General Rolling Stock.

In the recent decision of Re Mega Gold Holdings Ltd, the Hong Kong Court of First Instance declined to follow the Privy Council’s BVI decision Sian Participation Corp (In Liquidation) v Halimeda International Ltd which clarified the approach to winding-up petitions in the context of agreements to arbitrate.

When a creditor with standing presents a winding up petition and the Court is satisfied that the respondent company is unable to pay its debts, the starting position is that the petitioning creditor is entitled to a winding up order as of right (or ex debito justitiae). The burden then falls on the respondent company to show the Court that a winding up order should not be made.

In the recent case of Re UKCloud Ltd (In Liquidation), the English High Court examined whether the effect of a debenture granted by the Company gave the benefit of a fixed or floating charge over its internet protocol (IP) addresses. The distinction was important, impacting recoveries for the Company’s unsecured creditors.

In the High Court, Lifestyle Equities, (Lifestyle) successfully claimed that Hornby had infringed their trademarks. Lifestyle also successfully sued the Ahmeds personally, alleging they were jointly liable by sharing a common design with Hornby. Trademark infringement uses strict liability, which meant that there was no need for Lifestyle to prove that the Ahmeds knew of or intended the infringement.