Case details

Primeo Fund (in Official Liquidation) (Appellant) v Bank of Bermuda (Cayman) Ltd and another (Respondents) (Cayman Islands)

Case ID: JCPC 2019/0089

Jurisdiction: Court of Appeal (Cayman Islands)

Case summary

Issue

This appeal concerns claims brought by the appellant, Primeo Fund (In Official Liquidation) (Primeo), against the respondents for breach of their contractual duties. The Judicial Committee of the Privy Council is asked to decide whether Primeo's claims are barred, in whole or in part, by the reflective loss principle.

Facts

Primeo operated as an open-ended investment fund incorporated in the Cayman Islands. It invested funds with Bernard L Madoff Investment Securities LLC (BLMIS), initially a small proportion of its overall investments, growing over time. From 2003, Primeo also placed a small proportion of investments with BLMIS indirectly through Alpha Prime, a Bermudan-domiciled investment fund. From 2004, Primeo also began investing indirectly via another Cayman-domiciled fund, Herald Fund SPC. On 1 May 2007, Primeo switched its remaining direct investments in BLMIS to an indirect investment through Herald Fund SPC. The respondents acted respectively as Primeo’s administrator and custodian at all relevant times.

On 11 December 2008, Bernard Madoff was charged with fraudulently operating a multi-billion-dollar Ponzi scheme. Primeo was subsequently placed into voluntary liquidation. On 20 February 2013, Primeo brought claims against the respondents for breach of their contractual duties. At first instance, the judge dismissed Primeo’s claims, principally on the basis that strict liability loss and causation had not been established and that the claims were barred by the reflective loss principle in any event. The Court of Appeal agreed that that Primeo's claims were barred by the reflective loss principle, and so dismissed Primeo's appeal on that basis. Primeo now appeals to the Judicial Committee of the Privy Council.

Parties

Appellant(s)

Primeo Fund (in Official Liquidation)

Respondent(s)

Bank of Bermuda (Cayman) Ltd and another

Appeal

Justices

Lord Reed, Lord Hodge, Lord Lloyd Jones, Lord Kitchin, Lord Sales

Hearing start date

20 April 2021

Hearing finish date

21 April 2021

Watch hearing
20 Apr 2021 Morning session Afternoon session
21 Apr 2021 Morning session