A briefing from Appleby on 30th January was concerned with a court decision in Cayman about international sanctions imposed by the UN in respect of Libya in 2011. The UN Resolutions were given effect by the EU and in the Cayman Islands through the Libya (Restrictive Measures) (Overseas Territories) Order 2011, which has been subsequently amended. A judge has decided that the prohibition on “use” of funds (in this case, shares) in the sanctions prohibitions does not extend to cover the exercise of voting rights by a shareholder. The briefing says the opposite decision would have had significant implications for the corporate governance of companies whose assets are frozen by international sanctions and would have led to perverse outcomes. The defendants in the case successfully argued that the claimant’s interpretation of the prohibition on “use” of shares would have been contrary to the plain and ordinary meaning of the legislation and inconsistent with the object and purpose of the asset freeze. It is said that the judge also provided helpful clarification on the prohibition of “use” of funds. Appleby says that whilst this is the first major decision in the Cayman Islands on international sanctions, its significance is not limited to Cayman Islands law and the interpretation of the prohibition on “use” in Article 10 of the Order. The judge found that the international sanctions regime (UN, EU, UK and Cayman) should be read a single harmonious code; and therefore this decision will therefore be highly relevant to the interpretation of UN and EU sanctions globally as well as UK domestic legislation implementing international sanctions.
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