CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow, Jae Shin and Ross McLeod, Appleby
ant has given up something of value. Factors that are recognised as unjust include mistake, failure of consideration, duress, and undue influence. Failure of consideration is not consideration in the contractual sense, but essentially the fail - ure of a promise to do something in return. The remedy is restitution. Failure of consideration is not consideration in the contractual sense, but essentially the failure of a promise to do some - thing in return. The remedy is restitution. Fraudulent Disposition Fraudulent dispositions of property can be set aside under the Fraudulent Dispositions Act, whereby a disposition of property made with intent to defraud and at an undervalue is void- able at the instance of a party to whom an obli - gation is owed who was thereby prejudiced. 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 insolven - cy and are not part of the insolvency legislation (unlike in England and Wales, where the equiva - lent (although differently worded) provision is at Section 423 of the Insolvency Act 1986). In the insolvency context, dispositions of a com - pany’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 establish - ing 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 Cayman Islands law. The main elements of the common law offence of fraud are acting dishon - estly 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, dishon - estly appropriating property belonging to anoth - er with the intention of permanently depriving the other of it amounts to theft. Other offences relevant in fraud cases include false accounting, forgery, securities fraud and money laundering. The courts have the power to order payment of compensation. 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 gen - eral principles and not under specific bribery leg - islation (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 the value of the bribe and, if the loss exceeds the value of the bribe, a claim for compensation for the consequential loss suffered by the principal as a result of the bribe; • a claim for damages in fraud; • a claim for recovery of the bribe in restitution or unjust enrichment; • 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, pri - marily 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
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