CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow and Jae Shin, Appleby
diced. The burden is on the transferee to prove that they did not act in bad faith in order to defend such a claim. These claims do not require an insolvency and are not part of the insolvency legislation (unlike in England and Wales, where the equivalent (although differently worded) provision is at Section 423 of the Insolvency Act 1986). In the insolvency context, dispositions of a company’s property made at an undervalue with intent to defraud creditors are voidable at the instance of the official liquidator of the company under Section 146 of the Companies Act. The official liquidator has the burden of establishing an intent to defraud. These claims may be brought within six years of the disposition. Criminal Law Fraud is a common-law criminal offence under Cay - man Islands law. The main elements of the common law offence of fraud are acting dishonestly with an intent to gain or cause loss or to expose another to a risk of loss. Under Section 235 (1) of the Penal Code, dishonest - ly appropriating property belonging to another with the intention of permanently depriving the other of it amounts to theft. Other offences relevant in fraud cas - es include false accounting, forgery, securities fraud and money laundering. The courts have the power to order payment of com - pensation. 1.2 Causes of Action After Receipt of a Bribe The causes of action available to a principal whose agent has been bribed arise under general princi - ples and not under specific bribery legislation (which is applicable in respect of bribery of public officers). Those causes of action give rise to the following: • a claim in the tort of bribery for recovery of the amount of the bribe without proof of loss or gain and, if the loss exceeds the amount of the bribe, the basis of the entitlement being a claim in restitu - tion or unjust enrichment, a claim for compensation for the consequential loss suffered by the principal as a result of the bribe; an essential element of a claim in the tort of bribery is a fiduciary duty owed
by the party receiving the bribe – Hopcraft v Close Brothers Ltd [2025] UKSC 33; • a claim for rescission;
• a claim for damages in fraud; • a claim in constructive trust; or
• a claim for breach of fiduciary duty (as was found by the English court in Suppipat v Narongdej [2023] 7 WLUK 487). 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts Claims can be made against parties who assist or facilitate fraudulent acts in various ways, primarily conspiracy, knowing assistance, knowing receipt, and unjust enrichment. Conspiracy A civil claim in conspiracy enables a claimant to bring claims against a number of defendants who may not have committed any underlying wrongful act, and the claim can bring in parties who have become involved (although they might not be the main wrongdoer). A conspiracy involves two or more parties combining or agreeing to take concerted action that results in dam - age being caused to the victim of the conspiracy. As noted in 1.1 General Characteristics of Fraud Claims , there are two types of conspiracy (unlawful means conspiracy and lawful means conspiracy); however, in the context of commercial fraud, unlawful means conspiracy is the more common. Unlawful means conspiracy This involves two or more parties combining or agreeing with the intent of injuring another party, tak - ing concerted action using unlawful means (carry - ing out unlawful acts), resulting in damage actually being caused to that party. As the name suggests, the use of unlawful means is an essential ingredient. Both crimes and civil wrongs can constitute unlawful means. Although what amounts to unlawful means is case-specific, examples of unlawful means include: • inducing or procuring a breach of contract; • transactions at an undervalue; • preferences; • transactions defrauding creditors; and • contempt of court.
97 CHAMBERS.COM
Powered by FlippingBook