The Port Fund: Privy Council Clarifies Test For Derivative Action By A Limited Partner

Summary

In the recent judgment of Kuwait Ports Authority and Ors (Respondents) v Mark Eric Williams & Ors (Appellants),¹ delivered on 28 October 2024, the Judicial Committee of the Privy Council ("JCPC") clarified the test for determining whether a limited partner in a Cayman Islands exempted limited partnership ("ELP") is entitled to bring a derivative action on behalf of the ELP. This test is governed by section 33(3) of the Exempted Limited Partnership Act (2021 Revision) ("ELP Act"), which provides that such an action may be brought by a limited partner only if the general partner has "without cause, failed or refused to institute proceedings". This is the first case in which this test has been considered by the JCPC.