A Long And Winding Road: Another Instalment From The Grand Court To The Divergent Authorities On The Winding Up Of ELPs

• Published date: 14 November 2025
• Law Firm: Appleby
• Author: Mr David Lee

On 6 November 2025, the Honourable Justice Asif KC in In the Matter of ATP Life Science Ventures, L.P. (ATP Life Science) ruled that the Grand Court cannot give directions under the Companies Winding Up Rules (CWR) that an exempted limited partnership (ELP) participate in the proceedings of a just and equitable winding up petition because an ELP does not have separate legal personality. His Lordship therefore directed that the petition continue as a proceeding between the limited partner petitioners and the general partner (GP) as required by section 33(1) of the Exempted Limited Partnership Act (ELPA).

While the decision in ATP Life Science was directed to a relatively narrow issue on the compatibility of certain CWR provisions with the ELPA, the Court's reasoning will be of wider interest to the market as it relates to the proper basis by which ELPs can be wound up - which is the subject of increasingly extensive lines of divergent authority in the Cayman Islands. In this article, we consider the decision and its impact on those divergent lines of authority, as well as other important takeaways for GPs.

THE DIVERGENT AUTHORITY ON WINDING UP ELPs

Before considering the decision ofATP Life Science,¹ it is worth briefly summarising the existing divergent lines of authority in Cayman on the winding up of ELPs.²

The ELPA and Companies Act vs Partnership Act

Ostensibly, there are two apparent statutory routes under the ELPA to wind up an ELP. First, section 36(3) of the ELPA seeks to apply the provisions of Part V of the Companies Act, and the CWR, to the winding up of ELPs, except to the extent that those provisions are inconsistent with the ELPA. Second, the ELPA adopts the provisions of the Partnership Act, which provides under section 35, five cases in which the court can decree dissolution of a partnership.

It has been said that the legislative purpose of section 36(3) of the ELPA is to allow an ELP to be wound up in the same manner as a company under Part V of the Companies Act; and that the section seeks to move further away from the traditional Partnership Act constraints on dissolution and to embrace "so far as is possible," the more flexible winding-up mechanisms applicable to companies.³

In the matter of Padma Fund Limited L.P.

InIn the matter of Padma Fund Limited L.P.⁴ Justice Parker found that there was no jurisdiction for the court to make a winding up order against an ELP itself on a creditor's winding up petition. His Lordship reasoned that because the presentation of a creditor's petition against an ELP was contrary to section 33(1) of the ELPA - which provides that legal proceedings can only be issued against the GP - section 36(3) could not apply. Therefore, the petition needed to be presented against the GP (and not the ELP), with the...