Re-Opening a Trial with Further Evidence in the Cayman Islands

In the recent case of In the matter of Shanda Games Limited, FSD 14 OF 2016 (NSJ) (July 2017) it was held by Justice Segal that the Court has jurisdiction to admit new evidence and order a further hearing (and thereby re-open the trial) after the trial and after the Court has handed down its judgment in draft, before the sealing of the Court’s order (any appeal would be against the order of the Court and not the judgment). However, in the circumstances, the Learned Judge declined to do so.

The test to be applied in the Cayman Islands is*:

  • The principle to be applied generally is the overriding objective to deal with cases justly and at proportionate cost. This involves dealing with cases expeditiously and fairly and allocating an appropriate share of the Court’s resources to a dispute.
  • In cases involving an application to call new evidence and have a new trial, the Court should take into account the leading case of Ladd v Marshall. In the case of applications before the trial judge rather than the Court of Appeal, the Ladd v Marshall factors should be applied more leniently. Other “powerful factors” in the applicant’s favour would be needed to justify the application.
  • In the present case the summons to re-open was issued shortly before the draft judgment was received by counsel, however, the Learned Judge had completed the draft judgment and reached a decision on the petition. The handing down of a judgment in draft does not of itself preclude the granting of the application or determine how the Court should exercise the jurisdiction. Once the judgment has been handed down then a further issue arises, namely the question of reconsideration and the impact of depriving a successful party of a judgment already rendered needed to be taking into account when the Court is applying the overriding objective.
  • In order to justify re-opening the trial and allowing further expert evidence to be introduced the Petitioner must show (in the absence of fraud) that the problems with the expert witness evidence are sufficiently serious such that the Court’s decision cannot stand.

Conclusion

This decision from the Grand Court of the Cayman Islands will be of particular relevance to Hong Kong practitioners advising Cayman Island incorporated companies, as these companies are potentially exposed to litigation in the Cayman Islands courts. The company in this case, Shanda Games Limited, is itself a leading online game developer based in Shanghai that became embroiled in litigation with former shareholders following a take private merger that resulted in the company being delisted from the NASDAQ. There has been a significant upward trend in litigation by shareholders of Cayman Islands incorporated companies who dissent from take private mergers of listed PRC companies and ask the Grand Court of the Cayman Islands to determine the “fair value” of their shares.


* Citing the Supreme Court in L-B (Children) (Care Proceedings: Power to Revise Judgment) [2013] UKSC 8, [2013] 1 WLR 634; Charlesworth v Relay Roads Ltd [2000] 1 WLR 230; Vringo Infrastructure Inc v ZTE (UK) Ltd [2015] EWHC 214; and Malitskiy v Stockman Interhold SA BVIHC 2015/0008

Jurisdictions: 

Partner, Harneys

Ian Mann is head of Harneys’ Offshore Litigation and Restructuring Department in Hong Kong and is a leading offshore litigator, senior tactician and thought leader.

Mr. Man specialises in restructuring, insolvency, shareholders’ disputes and contentious trusts and has extensive experience in cross-border and conflict of laws dilemmas. He has been involved in every major recent restructuring involving offshore entities in the region and some of Asia’s highest value contentious estate litigation. A barrister by training, Mr. Man is an experienced advocate and regularly appears on behalf of elite families, usually being retained long-term for strategic offshore litigation advice.

Mr. Man is consistently ranked as top tier in his field by Chambers and Legal 500 and was recognised as one of the world’s leading asset recovery, restructuring & insolvency and private client lawyers by Who’s Who Legal 2016. He is one of only five offshore lawyers ranked as outstanding in both the 2016 and 2017 ALB Offshore Client Choice Lists.