Private Client & Offshore Services updates

Bahamas

Contributed by Lennox Paton
Payment of preferential debts out of assets subject to floating charge not permitted
  • Bahamas
  • October 26 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.

Privy Council clarifies Bahamian law on appealing interlocutory judgments
  • Bahamas
  • June 15 2017

There has been some debate over the lack of clarity regarding the concurrent jurisdiction of the Supreme Court and the Court of Appeal as to where and when applications for leave to appeal and stays should be made. A recent Judicial Committee of the Privy Council ruling has clarified this area of the law and given attorneys clear guidance regarding the proper procedure for appealing interlocutory judgments and applying for a stay pending appeal in the Bahamas.

Remittal of assets in cross-border insolvency proceedings
  • Bahamas
  • April 20 2017

The Bahamas Supreme Court recently considered the relationship between the statutory provisions in recognition proceedings which permit the turnover of property to a debtor (a foreign corporation or other foreign legal entity subject to a foreign proceeding in the country in which it is incorporated or established) and the common law power to direct remittal of assets to the foreign main proceedings where an ancillary liquidation is underway.

Hastings-Bass rule enshrined in law
  • Bahamas
  • April 13 2017

The recently enacted Trustee (Amendment) Act has clarified the law relating to trustee indemnities and given statutory effect to the rule in Re Hastings-Bass. With the passing of the act, the Bahamas has fortified its position as a leading offshore financial centre. It is expected that the codification of the rule will benefit trustees, protectors, beneficiaries and other persons who can apply to the court to unwind any perceived hard consequences flowing from an exercise of a fiduciary power.

Receiver-managers obtain court's blessing: self-dealing and fair-dealing rules not violated
  • Bahamas
  • December 15 2016

The joint receiver-managers of the assets of Baha Mar applied to the Supreme Court for a direction that the intended sale of Baha Mar's secured assets to a special purpose vehicle (SPV) would not amount to self-dealing or infringe the fair-dealing rule. The court was satisfied that the sale to the SPV was pursued by the joint receiver-managers in good faith and achieved after adequate precautions were taken to achieve the best price reasonably obtainable at the time.


Belize

Contributed by Courtenay Coye LLP
The importance of legal advice for timeshare rights
  • Belize
  • July 16 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
  • April 16 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
  • September 04 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
  • May 22 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
  • August 08 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.


British Virgin Islands

Contributed by Harney Westwood & Riegels
Sixtieth anniversary of New York Convention – time to choose BVI arbitration and enforcement
  • British Virgin Islands
  • July 05 2018

The British Virgin Islands is a pro-arbitration jurisdiction. Under the Arbitration Act, with regard to both New York Convention awards and non-New York Convention awards, the party against which the award has been made can make representation to the court regarding a refusal to enforce. An example of the British Virgin Islands' pro-enforcement approach can be seen in Belport Development Limited v Chimichanga Corporation.

Freezing injunction: what is a good arguable case?
  • British Virgin Islands
  • June 21 2018

The BVI Commercial Court has provided helpful guidance as to the threshold for a good arguable case, dismissing an application to discharge a worldwide freezing injunction obtained by a claimant. The court held that where there is a good arguable case that a defendant has acted fraudulently or dishonestly, or with "unacceptable low standards of morality giving rise to a feeling of uneasiness about the defendant", further evidence is often unnecessary to justify a freezing injunction.

Avoiding evasion: court takes pragmatic approach to serving uncooperative defendants abroad
  • British Virgin Islands
  • June 14 2018

International litigation and asset recovery require the pursuit of defendants and their assets across borders; therefore, it is a routine aspect of BVI litigation for claimants to serve legal documents abroad. Two recent decisions should significantly decrease the delay in effecting service abroad and pave the way for a more efficient approach to service out in the future.

No armchair liquidators – court confirms appointment of provisional liquidators to Swiss company
  • British Virgin Islands
  • June 07 2018

In the latest judgment regarding the DPH liquidation, the BVI Court of Appeal upheld the appointment of BVI provisional liquidators in respect of a Swiss company and clarified that evidence of dissipation of assets (in the Mareva sense) may not be a pre-condition to the appointment of provisional liquidators.

Procedure for appeal counter notice clarified – it is a parasite
  • British Virgin Islands
  • May 31 2018

A recent BVI Court of Appeal judgment was issued on a point rarely taken: is leave required to file a counter notice to an existing appeal? The full court found that once an appeal has been commenced with leave, the court's jurisdiction is engaged and the party wishing to cross-appeal may do so by counter notice without bringing a separate leave application. The court described a counter notice as being by its nature "parasitical on a pending appeal".


Cayman Islands

Contributed by Harney Westwood & Riegels
Security for costs – a foreign affair
  • Cayman Islands
  • July 19 2018

During the early stages of litigation, a well-advised defendant will consider how to enforce a Cayman Islands court costs order in the foreign jurisdiction where the claimant's assets are located, and whether it should seek security from the claimant for the costs of doing so. The Court of Appeal has recently considered whether a foreign claimant should give security limited to the costs of enforcing an order in the foreign jurisdiction only or for the (much greater) amount of defending the appeal.

Grand Court dismisses multibillion-dollar fraud claims in one of largest Ponzi schemes in history
  • Cayman Islands
  • July 12 2018

In a landmark ruling, the Grand Court emphatically dismissed a multibillion-dollar claim in a case involving allegations of fraud arising from one of the largest corporate collapses of the financial crisis. The case has showcased the court's ability to manage high-profile large-scale litigation, demonstrating especially the quality of the Cayman Islands judiciary and the court's ability to use cutting-edge technology, as well as the resources and flexibility to manage a year-long, multi-jurisdictional trial.

Court declines to restrain foreign trust proceedings
  • Cayman Islands
  • June 28 2018

The recent Grand Court decision in T Co v AA, BB, CC, DD, EE (a minor) is a good reminder of the court's approach to service out of the jurisdiction and provides insight on the scope of jurisdiction clauses contained in trust instruments.

Getting schooled in Nord Anglia – extra safeguards for companies facing appraisal litigation
  • Cayman Islands
  • June 07 2018

In Nord Anglia the justice made directions orders regarding the use of keyword searches, the number and scope of information requests, and the conduct of management meetings consistent with the orders made in Xiadu Life Technology. Further, the judgment will provide welcome safeguards for companies facing appraisal litigation in the Cayman Islands if adopted on a wider basis.

Shanda Games: Court of Appeal confirms timing for leave to appeal to Privy Council
  • Cayman Islands
  • May 31 2018

Appeals to the Privy Council from the Court of Appeal are regulated in the Cayman Islands (Appeals to Privy Council) Order 1984. However, the order does not provide for how to determine the date of a decision. The Court of Appeal recently ruled that for the purposes of an application for leave to appeal to the Privy Council, time runs from the date on which an order is sealed or perfected, not the date on which the judgment is delivered.


Cyprus

Contributed by A G Paphitis & Co
Taxation of Cyprus international trusts
  • Cyprus
  • March 15 2018

Cyprus international trusts, which are subject to the International Trusts (Amendment) Law 1992, provide a significant number of tax advantages and can be used as part of an international tax planning strategy. In order to estimate the tax that should be imposed on a trust, its specifications, purpose and any other relevant circumstances must be considered.

Private investments in Cyprus – a bright future
  • Cyprus
  • December 14 2017

Cyprus saw its highest increase in gross domestic product in almost a decade in the first quarter of 2017. The dark days of the 2013 financial crisis appear to be in the past and foreign investment remains at the heart of government strategy, aided by factors such as the citizenship-by-investment programme, which will help to attract private investment in the property, retail and pharmaceutical sectors.

Tax residency can be obtained by staying in Cyprus for 60 days a year
  • Cyprus
  • September 07 2017

Foreign tax residents in Cyprus are exempt from taxation on their worldwide dividend and passive interest income. Parliament recently approved a bill granting tax resident status to individuals who spend at least 60 days a year in Cyprus, under certain conditions. Individuals who do not qualify as Cyprus tax residents under the 183-day rule now have the opportunity to consider the 60-day rule, which took effect on January 1 2017.

Cyprus international trusts – an overview
  • Cyprus
  • July 06 2017

Cyprus international trusts (CITs), also known as Cyprus offshore trusts, are regulated by the International Trusts Law, which complements the Trustees Law. CITs provide multiple benefits – such as anonymity, asset protection, flexibility and taxation incentives and benefits – which high-net-worth individuals around the world can use within the framework of their tax planning and investment strategies.

Cyprus offers tax exemption on worldwide income
  • Cyprus
  • June 01 2017

In order to provide high-net-worth individuals with additional incentives to relocate to Cyprus or continue conducting their business operations or investments in Cyprus, the government introduced non-domicile rules for the purposes of the Special Defence Contribution Tax Law. As a result, an individual may be resident, but not domiciled, in Cyprus. Tax residents who are not domiciled in Cyprus are exempted from the special defence contribution tax.