Practice Direction for pre-trial directions in Fair Value Proceedings introduced

A new Practice Direction was introduced on 23 August 2019, which sets out standard pre-trial directions for the management of fair value proceedings brought under section 238 of the Companies Law (2018 Revision).

Practice Direction No. 1 of 2019 states that upon the presentation of a petition pursuant to section 238, the party presenting the petition must at the same time issue a summons for directions which should include directions regarding:

(i) the opening and population of, and access to, an electronic data room for maintaining documents relevant to fair value;
(ii) discovery and inspection of documents relevant to fair value of the subject company as at the relevant valuation date, including documents created both before and after this date;
(iii) the provision of factual evidence;
iv) the provision of expert evidence;
(v) the manner in which evidence is to be given, including cross-examination of deponents, if by affidavit;
(vi) listing any case management conference and the trial of the petition; and
(vii) any other procedural matters.

A link to the practice direction is here: Practice Direction No. 1 of 2019 – Directions for proceedings brought under section 238 of the Companies Law (As Revised).

This development follows the Grand Court's recent approval of the use of a relatively standard form of pre-trial directions in Re JA Solar Holdings Co., Ltd (unreported, 18 July 2019) discussed in our legal update 'The Cayman Standard: Directions in Fair Value Proceedings'.

The directions contained within Practice Direction No. 1 of 2019 are not as detailed as the pre-trial directions considered and ordered by the Court in Re JA Solar Holdings Co., Ltd (unreported, 18 July 2019). There continues to be latitude for the directions to be tailored to the particular needs of the case. Nonetheless they remain a welcome clarification, which should lessen the scope for disagreement and serve to promote efficiency and help manage costs associated with section 238 proceedings.

Mourant has considerable expertise in section 238 cases, having been involved in many of the largest cases in the Cayman Islands, including Qunar Cayman Islands Limited, KongZhong Corporation, Zhaopin Limited, Nord Anglia Education, Inc.