Mobile Menu
Articles

A Strategic Turnaround by the Privy Council

December 2010 Updated on 14 December 2010 Nigel K. Meeson QC

In a judgment delivered on 13th December 2010, in the case of Culross Global SPC Limited v Strategic Turnaround Master Partnership Limited, the Privy Council has provided important clarity on the correct approach to the construction of Fund documentation, and has thankfully laid to rest the heresy introduced by the Cayman Islands Court of Appeal as to what it had termed "the process of redemption".

The issue at hand was whether Culross was a current creditor of Strategic Turnaround Master Partnership Limited or whether it was merely a prospective creditor. According to the Court of Appeal, the "process of redemption" was not complete until payment had been made and the name of the creditor removed from the register. The analysis was manifestly wrong for a number of reasons and was put to rest by the Privy Council, who said that: "Any power to withhold payment of the redemption proceeds must be authorized by or pursuant to the articles of association."

Ultimately, the Privy Council disagreed with the Court of Appeal in relation to how the Articles were to be construed together with the Confidential Explanatory Memorandum, and ruled that the right of redemption and the right to suspend redemption is governed by the Articles and depend on the proper construction of those Articles. The so-called process of redemption is irrelevant.

Read more at the link below.

 

To continue reading full articles in PDF format:
A Strategic Turnaround by the Privy Council

 


Nigel K. Meeson QC
Partner

Hong Kong   +852 2842 9553


Accolades
_

"Few firms can come close to Conyers on one critical metric, and this is the breadth of the client base."
- IFLR1000

Related International Offices

Cayman Islands


Media Contact

For media enquiries, please contact media@conyersdill.com

Articles

A Strategic Turnaround by the Privy Council

14 December 2010 Updated on 14 December 2010 Nigel K. Meeson QC

In a judgment delivered on 13th December 2010, in the case of Culross Global SPC Limited v Strategic Turnaround Master Partnership Limited, the Privy Council has provided important clarity on the correct approach to the construction of Fund documentation, and has thankfully laid to rest the heresy introduced by the Cayman Islands Court of Appeal as to what it had termed "the process of redemption".

The issue at hand was whether Culross was a current creditor of Strategic Turnaround Master Partnership Limited or whether it was merely a prospective creditor. According to the Court of Appeal, the "process of redemption" was not complete until payment had been made and the name of the creditor removed from the register. The analysis was manifestly wrong for a number of reasons and was put to rest by the Privy Council, who said that: "Any power to withhold payment of the redemption proceeds must be authorized by or pursuant to the articles of association."

Ultimately, the Privy Council disagreed with the Court of Appeal in relation to how the Articles were to be construed together with the Confidential Explanatory Memorandum, and ruled that the right of redemption and the right to suspend redemption is governed by the Articles and depend on the proper construction of those Articles. The so-called process of redemption is irrelevant.

Read more at the link below.

 

To continue reading full articles in PDF format:
A Strategic Turnaround by the Privy Council

 


Nigel K. Meeson QC
Partner

Hong Kong   +852 2842 9553