Section 74 of the Companies Law (“Section 74”) provides that security for costs may be ordered to be provided by a plaintiff Cayman Islands company where the Court is satisfied that the assets of the plaintiff company will be insufficient to pay the defendant’s costs.
This statutory provision only applies to Cayman Islands companies. The Grand Court Rules (“GCR”) Order 23 provides for security for costs to be provided by a foreign plaintiff. This Rule does not apply to winding up proceedings. Winding up proceedings are governed by the Companies Winding Up Rules, 2008 (as amended) (“CWR”) which make no provision for security for costs. It was against this background that the Court of Appeal had to consider whether it had inherent jurisdiction to order a foreign company to provide security for costs in winding up proceedings.
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In the matter of Dyxnet Holdings Ltd (23 February 2015)