Case details

DD Growth Premium 2X Fund (In Official Liquidation) (Appellant) v RMF Market Neutral Strategies (Master) Limited (Respondent) (Cayman Islands)

Case ID: JCPC 2016/0050

Jurisdiction: The Court of Appeal of the Cayman Islands

Case summary


Whether payments made for the redemption of shares were unlawful, and if not, whether they are recoverable (or whether the latter issue should be remitted to the Grand Court to decide). This issue turns on the correct construction of sections 37(6), 37(3) and 34(2) of the Cayman Islands Companies Law.


The Appellant (now in official liquidation) is a company in which the Respondent held redeemable shares. The Respondent submitted redemption requests for its shares, which were redeemed in accordance with the articles of association on the redemption day 1 December 2008, with payment to be made within 14 business days. As at 31 December 2008, the Appellant was insolvent. The Respondent received delayed redemption payments during January and February 2009. A petition to wind up the Appellant was presented on 18 March 2009 by two unpaid redeeming shareholders. The joint official liquidators appointed sought to recover the redemption payments made to the Respondent, including on the basis that the payments were unlawful – they were made at a time when the Appellant was insolvent, in breach of s.37(6) of the Cayman Islands Companies Law which provides that payments out of capital are subject to a solvency requirement. The Appellant’s claim failed in the Grand Court, and they appealed on the basis that the court had erred in its construction of s.37(6). The Court of Appeal dismissed the appeal on the basis that the redemption payments were not payments out of capital for the purpose of s.37(6) and were not, therefore, unlawful. The Court of Appeal did not consider the arguments on recovery of the payments if unlawful. The Appellant’s further appeal challenged the Court of Appeal’s construction of s.37(6) and raised further issues as to the meaning of s.37(3) and s.34(2).



DD Growth Premium 2X Fund (In Official Liquidation)


RMF Market Neutral Strategies (Master) Limited



Lord Mance, Lord Sumption, Lord Carnwath, Lord Hodge, Lord Briggs

Hearing start date

04 Oct 2017

Hearing finish date

05 Oct 2017

Watch hearing
04 Oct 2017 Morning session Afternoon session
05 Oct 2017 Morning session