When are directors indemnified by a company's Articles of Association?

The Grand Court of the Cayman Islands has considered whether a director can rely on exoneration and indemnification provisions in a company’s Articles of Association when there was no written contract between the company and the director incorporating those provisions into the terms of the director's appointment.

While the Grand Court accepted that in the specific facts of the case, the director was entitled to rely on the exoneration and indemnification provisions in the Articles, the judgment emphasises the desirability of avoiding uncertainty by expressly incorporating exoneration and indemnification provisions into the director's contractual terms.