Norwich Pharmacal Orders: The Right Medicine For Third Party Disclosure Of Information And Documents In The Cayman Islands

Published date05 August 2022
Subject MatterFinance and Banking, Corporate/Commercial Law, Litigation, Mediation & Arbitration, Debt Capital Markets, Financial Services, Corporate and Company Law, Arbitration & Dispute Resolution
Law FirmAppleby
AuthorMr Ulrich Payne and Susan Fallan

A Norwich Pharmacal order (NPO) is a disclosure order available in the Cayman Islands to compel a third party who has been somehow 'mixed up' in wrongdoing to disclose certain information and/or documents to help the applicant identify and/or pursue a potential defendant to future proceedings, whether those proceedings are to take place in the Cayman Islands or overseas.

Obtaining a NPO can be a very effective tool in obtaining crucial information held in the Cayman Islands that is needed to pursue a claim against the ultimate wrongdoer anywhere in the world, which the applicant would struggle to obtain by other means.

A RECENT HELPFUL DECISION

In Hangzhou Lingqin Investment v Harneys Liquidation Services (Cayman) Ltd and another (unreported, 7 June 2022, FSD 65 of 2022 (MRHJ)), the Grand Court has again shown its willingness to grant NPOs in the right circumstances, on this occasion against a Cayman based registered office and corporate filing agent (the defendants).

In Hangzhou Lingqin, plans were afoot to file proceedings in Hong Kong and the Cayman Islands against the ultimate wrongdoer: a Cayman Islands company referred to as Tongfang SPC (the Company). The Company was to be sued over a substantial unpaid debt, when it was discovered that it had been put into voluntary liquidation without notice to the creditor, and without paying the debt.

The applicant applied for a NPO against the defendants to obtain corporate documents and information held about the Company in the Cayman Islands, for use in applying to restore the Company to the Cayman corporate registry, a potential consequent winding up order, and/or for bringing proceedings against certain parties before any court or tribunal (including arbitration) in any jurisdiction.

The defendants' position was that their involvement in the Company's voluntary liquidation was limited to their roles as registered office and filing agent respectively. The defendants required the applicant to seek a NPO as some of the information required was confidential, and took a neutral stance in the application.

The Court granted the application, while providing a useful reminder of the criteria for obtaining a NPO in the Cayman Islands.

CRITERIA FOR OBTAINING AN NPO

  1. There must be a good arguable case that a wrong has been carried out
    In Hangzhou Lingqin, this test was met because the Court was satisfied that the Company and its voluntary liquidator had been aware of the outstanding debt (having received a letter of...

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