Privilege In Cayman Islands Appraisals – The Door Opens For Dissenting Shareholders

Discovery is a key aspect of section 238 appraisal proceedings and is critical in establishing fair value. In 58.com the Grand Court of the Cayman Islands recently clarified the circumstances in which a company involved in appraisal proceedings under section 238 of the Companies Act can assert privilege against dissenting shareholders.¹

In confining the scope of privilege that 58.com can claim against the dissenters, the court has opened the door for dissenting shareholders to obtain, without challenge, discovery of documents that had historically been withheld in Cayman appraisals. This decision will have a significant impact on both current and future appraisal proceedings, where any legal advice obtained by merging companies will now come under increased scrutiny.