The Cayman Islands, like other offshore jurisdictions, is often seen as a secretive jurisdiction, with corporate information being difficult to obtain. However, in reality there is more information available than is often portrayed, and the information available has increased significantly in recent years. In this article, we outline the information that is available to the public and to shareholders, as well as the information that may be obtained through litigation.
Publicly available information
A search of the Companies Online Registry Information System (CORIS) will verify the company’s:
- name and registration number;
- date of incorporation;
- type of company (exempted[1] or local);
- name and address of the registered office;
- current status (i.e. whether it is active, struck-off or dissolved);
- name of the initial subscriber (usually, the name of the corporate services provider who formed the company);
- authorized share capital;
- nature of business; and
- financial year end.
It is also possible to conduct a search for the directors of a company. However, you can only search by company (so you cannot put in the name of a person and find out what companies they are a director of), and the results only show the current directors (not any past directors). Any changes to the directors must be notified within 30 days, so this information should be up to date.
If the company has been involved in litigation, the originating process and any judgments given in the proceedings will usually be publicly available through an online search of the Court register.
In the case of local companies, the register of members is open to inspection by shareholders for free, or by the public for a fee. This is not the case however for exempted companies.
Beneficial ownership information is collected and stored on an electronic platform maintained by the Registrar of Companies, but this platform is not publicly accessible and may only be accessed by the Registrar itself or at the request of other regulatory bodies and authorized law enforcement agencies in the Cayman Islands.
Information available to shareholders
A shareholder is entitled to request a copy of the company’s Memorandum and Articles of Association. Aside from that, a shareholder has no entitlement to company information or documents, including accounts, unless such right is provided in the company’s Articles of Association or any shareholder agreement.
Upon the request of not less than one-fifth of shareholders, the Court may appoint inspectors to examine into the affairs of the company and report their opinions to the Court. In practice this remedy is seldom used, as in most cases, given their broader powers, it will be preferable to seek the appointment of liquidators.
Information available through litigation
In order to obtain information beyond that outlined above, it will usually be necessary to commence litigation. There are a number of different applications that may be made.
First, all parties to civil litigation in the Cayman Islands are under an obligation to disclose all documents that may directly or indirectly advance or damage either party’s case. This obligation however relates only to documents in that party’s possession, custody or power, and does not extend to documents in the possession of third parties.
It may be possible to obtain documents in the possession of third parties under the jurisdiction established in the English case of Norwich Pharmacal Co v Customs and Excise Commissioners. A Norwich Pharmacal order is a disclosure order made against parties who have somehow been mixed up in wrongdoing, whether innocently or otherwise.
In order to obtain such an order, the applicant must show that:
- A wrong has, or has arguably, been carried out by a wrongdoer.
- The relief is necessary.
- The respondent against whom the order is sought (i) was somehow involved in or facilitated the wrongdoing, and (ii) is likely to be able to provide the information sought.
In suitable cases, where there is exceptional urgency, or giving notice would defeat the purpose of the application, an application for a Norwich Pharmacal order may be made without giving notice to the respondent.
Each Cayman Islands exempted company must engage a professional registered office service provider regulated by the Cayman Islands Monetary Authority. This means that each company has a regulated service provider in the Cayman Islands which is responsible for accepting service of process, maintaining the statutory registers and, importantly, undertaking due diligence and conducting regular monitoring on the company under Cayman’s anti-money laundering legislation. Registered offices are required to maintain a substantial amount of information regarding their clients, including details of ultimate beneficial ownership. This information can be exceedingly useful to those litigating, or seeking to enforce a judgment, against Cayman Islands companies, and the past few years have seen a rise in the number of Norwich Pharmacal orders sought against registered office service providers in the Cayman Islands.
Where proceedings are already on foot or contemplated overseas, it may not be appropriate to seek a Norwich Pharmacal order, and the appropriate route may be to ask the foreign court to issue a letter of request for judicial assistance to the Cayman Islands court. Further, the Cayman court may grant interim relief in support of overseas proceedings under section 11A of the Grand Court Act, and it is likely that the relief available under that section includes discovery orders.
Evidence held in the Cayman Islands in relation to criminal investigations or prosecutions being conducted overseas may be requested by way of Mutual Legal Assistance request, utilizing the Criminal Justice (International Cooperation) Act or the Mutual Legal Assistance (United States of America) Act for United States’ requests.
If you have any questions about these issues or require assistance with a Cayman Islands asset-tracing investigation, please contact Katie Pearson on katie@claritaslegal.com (for civil matters) or Elisabeth Lees on elisabeth@claritaslegal.com (for requests in relation to international criminal proceedings).
[1] “Exempted” in this context means exempted from the requirements of the Local Companies Control Act. The Local Companies Control Act provides limitations on who may own and control a company doing business in the Cayman Islands, but companies doing business overseas are exempted from these requirements.
