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May 24 2018
In In the matter of Nanfong International Investments Limited FSD 256 of 2017 (IKJ) Justice Kawaley reaffirmed the high threshold for applicants seeking a case management stay as determined in AHAB v Saad Investments Company Limited.(1) Chadwick P, giving judgment on behalf of the Cayman Islands Court of Appeal in AHAB, confirmed that the test is:
"whether the benefits which were likely to result from imposing a temporary stay so clearly outweighed any disadvantage to the plaintiff that this was one of those cases in which 'rare and compelling circumstances' provided the 'very strong reasons' that justified [a case management stay]."
A petition to wind up Nanfong International Investments Limited was issued in the Grand Court of the Cayman Islands by its majority shareholder, Business Intelligence Investments Ltd (BIIL). The minority shareholder, Oriental Knowledge Tank Ltd – a Samoan entity – issued an application to stay the petition on the basis that there were related proceedings in Samoa and that the minority shareholder of BIIL had issued an application for an injunction in Samoa to declare, among other things, that BIIL did not have authority to issue the petition. Oriental argued that Samoa was the proper forum in which to argue these matters of Samoan law.
Nanfong argued that the authority issue was a narrow one; the Cayman court has experience dealing with foreign law matters by reference to expert evidence and the construction of Samoan law is not fundamentally different from Cayman law. Further, there was no indication of when or if the Samoan injunction would be determined and that an application for a stay on the basis of any injunction that "might" be granted was hardly sufficient to meet the burden of proof on Oriental to show that Samoa was a more appropriate forum for determining the issues.
Kawaley refused to grant the stay, finding that while BIIL's standing to bring the petition could be determined by the Samoan court, it could also be dealt with by the Cayman court as the Samoan and Cayman legal systems are both common law legal systems and are not entirely different from one another. Therefore, in the circumstances, the high burden imposed in stay applications of this type had not been met.
Oriental was granted leave to appeal the decision.
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