Offshore Litigator's Perspective - Q2 2021

Welcome to our quarterly Litigation round up, which brings you Mourant's perspective on legal developments that we see in our work advising on many of the most challenging and complex cases in the offshore courts.

Summer is here and, with it, further movement towards re-opening post-pandemic. Our UK colleagues are looking forward to the planned lifting of restrictions on 19 July. Our other jurisdictions are taking similar steps. For example, the Cayman Islands government has just published its own timeline towards safe re-opening. 

From the BVI, we analyse a recent High Court decision granting one of the free-standing injunctions under section 24A of the Eastern Caribbean Supreme Court (Virgin Islands) Act which plugged the (short-lived) Black Swan hole. Sticking with new legislation, we outline the recent changes and improvements to the BVI's anti money-laundering regime here.

In light of recent macro-economic uncertainties and the impact of the global pandemic, there have been an increasing number of corporate restructurings involving the sale and purchase of assets by BVI companies. We have recorded this useful podcast to help you to manage this. Finally, we explore some recent decisions that consider the interplay between arbitration and insolvency proceedings, and how the BVI courts will balance parties' contractual rights to arbitrate with their statutory rights to present winding-up applications.

From Cayman, we begin with a helpful Court of Appeal decision in Essar Global Fund Ltd and Essar Capital Limited v Arcelormittal USA LLC, which confirms that Norwich Pharmacal orders for third party disclosure are available in support of foreign proceedings. We also analyse a recent Court of Appeal decision, which confirmed its jurisdiction to hear an appeal of a decision of the Grand Court, made pursuant to section 152(1) of the Companies Act (2021) Revision to dissolve a Company following its official liquidation.

We recently acted on a significant scheme of arrangement, used to redomicile the parent company of the Endeavour Mining group of companies from the Cayman Islands to England & Wales. The case is a good reminder of the flexibility of schemes, which we're all used to seeing in a debt-restructuring context, but which can also be used to facilitate non-distressed group restructurings, reorganisations and mergers.

From Guernsey we start with one of our new vlogs, in which our ITPC partner Gilly Kennedy-Smith explores practical take away points arising from recent trusts cases. At less than seven minutes, it's a perfect morsel of know-how for your next coffee-break, and well worth a watch. This is part of a series of practical vlogs in which we will examine areas of law and practice that frequently arise for our clients.

In other news, we explore a recent decision in which the Royal Court in Guernsey confirmed, for the first time, that the principle known as the rule against reflective loss applies in Guernsey. We discuss some recent guidance from the Royal Court, potentially limiting a bank's ability to recover its costs from its customer, pursuant to a contractual indemnity. Finally, in this update we cover the latest developments in one of Guernsey's largest regulatory legislative projects, which will see a raft of new laws come into force this autumn, to be followed by various underlying rules, regulations, codes and guidance on the Revision of Laws Project. Anyone in the fiduciary, banking, investment and insurance sectors should ensure they are aware of them. Gilly Kennedy-Smith and Christa Feltham have also written an article considering the ever-increasing impact of the Environmental, Social and Governance considerations on trustees and others with similar duties relating to investments, and how we all need to be alive to those factors when making decisions relating to such investments.

Finally, from Jersey, seven years after statutory relief was introduced, we explore what happens if a decision is made leading to a Trust being established in error. To conclude, we have INSOL World's recent Global Guide interactive map looking at the measures adopted to support distressed businesses through the pandemic. Mourant Partner, Stephen Alexander contributed to the Jersey section of this new guide.