Private Client & Offshore Services updates

Bahamas

Contributed by Lennox Paton
Bahamian insolvency regime continues to promote judicial efficiency
  • Bahamas
  • 28 February 2019

The Bahamian legislature continues to examine its existing legislation for ways to promote judicial efficiency by amending and implementing new procedures in its insolvency regime. As the global economy continues to grow and foreign companies and investors increasingly face obstacles arising from the use of offshore structures, the need for cross-border insolvency proceedings and the use of protection afforded to investors will likely continue to increase.

Buying real estate – when to engage an attorney?
  • Bahamas
  • 21 February 2019

After finding the ideal property to purchase, what is the next step? Engage an attorney. An attorney can help to connect real estate buyers with key service providers in order to arrange, among other things, home inspections or insurance. Involving an attorney will make the difference between a smooth transaction that meets the expectations of the buyer versus one that is fraught with issues, unrealistic expectations and other obstacles which could have been avoided with the benefit of early advice and proper planning.

Foreign direct investment in real estate market
  • Bahamas
  • 14 February 2019

Foreign direct investment (FDI) remains one of the key catalysts to the Bahamian economy's growth and sustainability. The Bahamas National Investment Policy seeks to boost the economy through investments and provide favourable returns for investors. To this end, it encourages FDI in key areas in the real estate market, including tourist resorts, upscale condominiums, timeshares and second-homes and marinas.

Supreme Court evaluates scope of trustees' protection in contentious trust litigation
  • Bahamas
  • 09 August 2018

The Supreme Court recently assessed the protection afforded to trustees by virtue of Section 83 of the Trustee Act 1998, which provides that a trustee cannot be bound or compelled by way of discovery to disclose information and documents about a trust. In Dawson-Damer, a trustee had used Section 83(8) as a basis to refuse a disclosure request. The applicant's case was built primarily on the allegation of a breach of duty (ie, the trustee had failed to consider the applicant's needs).

Payment of preferential debts out of assets subject to floating charge not permitted
  • Bahamas
  • 26 October 2017

The Supreme Court recently considered whether preferential creditors have any claim against the moneys received by receiver-managers for the sale of assets subject to a charge. The court determined that a floating charge which crystallised before the making of a winding-up order takes priority over other creditors.


Belize

Contributed by Courtenay Coye LLP
The importance of legal advice for timeshare rights
  • Belize
  • 16 July 2015

The Supreme Court recently highlighted the need to comply strictly with essential legal requirements when investing in property abroad. It found that US citizens who had purchased timeshare interests in a residential resort could not exercise their purported rights in priority of a bank's mortgage interest on the property because they had not registered their timeshares or paid the required stamp duty.

Directors' indemnities foolproof
  • Belize
  • 16 April 2015

The Belize Court of Appeal recently confirmed that indemnities given by a Belizean company to its directors deprived the company of a cause of action to pursue a claim against former directors for decisions taken during their term as company directors. Belize continues to recognise blanket indemnities given by a company to directors as legal.

Appeal Court clarifies procedural law on claims against foreign defendants
  • Belize
  • 04 September 2014

The Belize Court of Appeal has provided guidance to litigants involved in multi-jurisdictional litigation. The court interpreted the rules applicable to commencing a claim against foreign defendants, and service of a claim form and interim injunction on parties outside the jurisdiction. Under the Civil Procedure Rules there is no need to obtain permission to issue a claim form for service abroad.

Enforcement of LCIA award refused as contrary to public policy
  • Belize
  • 22 May 2014

The Caribbean Court of Justice has addressed the issue of whether New York Convention Awards should be enforced. The case is exceptional and should be confined to its unusual facts. However, it stands as highly persuasive authority for the proposition that violations of the constitutional order by a government when affording tax concessions to investors may afford a defence to enforcement of an arbitral award.

Caribbean Court of Justice rules government must arbitrate under treaty
  • Belize
  • 08 August 2013

The Caribbean Court of Justice has delivered a landmark decision which narrows the circumstances in which a government may resort to its domestic courts to restrain international arbitration proceedings. The decision is an important victory for international investors in the Commonwealth Caribbean, since many bilateral investment treaties include clauses for resolution of disputes by international arbitration.


Bermuda

Contributed by Carey Olsen Bermuda
Bermuda private trust company guide
  • Bermuda
  • 04 April 2019

Bermuda is an excellent jurisdiction in which to establish private trust companies, trusts and underlying entities (including private funds and insurance vehicles) and family offices (or branches thereof). However, particular care must be taken with regard to a private trust company's initial structuring. It is critical that the rights, powers and responsibilities vested in particular parties are fully understood (particularly by the settlor both during their lifetime and in future).

Deadline approaches for compliance with Bermuda beneficial ownership regime
  • Bermuda
  • 28 March 2019

Bermuda companies have until 30 April 2019 to comply with requirements introduced in 2018 to maintain a register of their beneficial owners. If a company is non-compliant with these requirements after this date, both the company and its directors and other officers may be subject to criminal sanctions.

Round-up of recent trust cases
  • Bermuda
  • 14 March 2019

In 2018 the Bermuda courts issued several important decisions in trust cases. Moreover, the Trust Law Reform Committee of the Bermuda Business Development Agency remains active and has recently proposed further legislative reform. Among the committee's recent reform initiatives, the amendment to the Perpetuities and Accumulations Act 2009 by the Perpetuities and Accumulations Amendment Act 2015 has resulted in significant interest among international advisers and local practitioners.

Family office proposition – review of case law
  • Bermuda
  • 07 March 2019

Bermuda has historically flown beneath the radar when it comes to promoting itself as the ideal location for the establishment of a family office. However, the overall value of the trust business to Bermuda is significant, with hundreds of billions of trust assets under management on the island. New legal developments bode well for the family office sector and should help to make the Bermuda trust fit for purpose for the next generation of ultra-high-net-worth families.

Know your rights when made redundant
  • Bermuda
  • 28 February 2019

Bermuda's reinsurance market has not been immune to changes in the world's economic market. A rise in mergers and acquisitions has led to an increase in redundancies within the Bermuda workforce. Employees should be aware of their rights when made redundant and should always seek legal advice to ensure that their redundancy is both lawful and fair.


British Virgin Islands

Contributed by Harneys
Misplaced trust – what happens when your trustee goes AWOL?
  • British Virgin Islands
  • 04 April 2019

In a recent case, an applicant succeeded in the increasingly commonplace but frustrating situation where the beneficiary of a revocable bare trust cannot obtain execution of the trust due to an uncooperative or defunct corporate nominee. The court ultimately granted the vesting order sought by the beneficial owner and appointed an insolvency practitioner as the statutory proper person.

Commercial Court provides welcome guidance on Norwich Pharmacal relief in aid of foreign proceedings
  • British Virgin Islands
  • 21 March 2019

In a recent ex tempore judgment, the BVI Commercial Court's power to grant Norwich Pharmacal disclosure orders in support of foreign proceedings was clarified. The judgment was given on a successful application for Norwich Pharmacal relief to assist Brazilian clients in bringing claims for the recovery of misappropriated assets. The decision confirms the British Virgin Islands as a particularly helpful jurisdiction in the fight against international fraud and the recovery of misappropriated assets.

This is not a wind up: BVI court approves restructuring provisional liquidation
  • British Virgin Islands
  • 14 March 2019

In a major development in BVI insolvency law and practice, the Commercial Court recently held that provisional liquidation is available to facilitate a restructuring. The objective of a restructuring provisional liquidation is to provide a better outcome for creditors than would be likely on a winding up. The Commercial Court's decision will certainly influence the current debate in the British Virgin Islands regarding insolvency legislation reforms.

Reverse engineering: Court of Appeal in rare reversal of findings of fact
  • British Virgin Islands
  • 29 November 2018

The BVI Court of Appeal recently considered the scope of its jurisdiction to interfere with findings of fact made at first instance. This is the second time in 2018 that the court has addressed this issue. While the threshold for intervention is high, the court will intervene on appropriate occasions. The thoroughness of the evaluation of evidence and the credibility of the judge's conclusions at first instance are likely to be pivotal to that determination.

Receivers – gateway to unlocking disabled bearer shares
  • British Virgin Islands
  • 08 November 2018

In two recent BVI Court of Appeal decisions, disabled bearer shareholders were found to have a constitutional right not to be deprived of their property without compensation. It is now abundantly clear that even where BVI disabled bearer share companies are still without functionaries (ie, directors) to facilitate the traditional redemption of those shares, the court has flexible jurisdiction to appoint receivers to redeem those disabled shares, thereby ultimately restoring the companies to a functional state.


Cayman Islands

Contributed by Ogier
Cayman Islands economic substance requirements
  • Cayman Islands
  • 11 April 2019

New legislation recently came into force in the Cayman Islands requiring in-scope entities that carry on particular activities to have demonstrable economic substance in Cayman. Relevant entities must make an annual report as to whether they are carrying on one or more of a defined list of activities (relevant activities). If they are, they must satisfy an economic substance test in Cayman in respect of such relevant activities.

Latest interpretation of illegality defence
  • Cayman Islands
  • 04 April 2019

A Cayman court recently considered numerous complex areas of the law concerning commercial fraud and the ability to trace assets through corporate groups and into sophisticated financial products. This article discusses the court's findings regarding the illegality defence and the lessons which can be derived for future Cayman cases in which this defence might be engaged.

Not in dispute – why Cayman leads in cross-border dispute resolution and how the sector is evolving
  • Cayman Islands
  • 28 March 2019

Insolvency and restructuring cases are perhaps the most common types of cross-border dispute heard by the Grand Court, but other examples include trust disputes, which can often involve high-net-worth families and trust assets spread across the globe, and the enforcement of foreign judgments and arbitral awards. High-profile examples of cross-border cooperation between the Grand Court and foreign courts include the Bank of Credit and Commerce International liquidation and the Ocean Rig restructuring.

Court of Appeal overturns anti-suit injunction in favour of Argyle Funds SPC Inc
  • Cayman Islands
  • 31 January 2019

The Court of Appeal has unanimously allowed every ground of an appeal by the liquidators of Argyle Funds SPC Inc. The key takeaway for the Cayman Islands professional services industry is that where work is delegated to be carried out by related entities outside the Cayman Islands, any attempt to contractually limit clients' rights to bring claims against those entities must be expressly articulated within the contract.

Capital call facilities – LPA and side letter review
  • Cayman Islands
  • 10 January 2019

Along with the growth and maturity of the fund finance market, funds and their counsel have become increasingly familiar with lenders' limited partnership agreement (LPA) requirements. Therefore, newer LPAs often include the provisions that lenders require in order to provide financing under a capital call facility. Lenders and their counsel should consider several key due diligence points when reviewing LPAs, investor subscription documents and related side letters.