Can the Cayman Court replace a general partner as liquidator of an exempted limited partnership?

The Cayman Islands Court of Appeal says "yes" it can.  

In its recent judgment in One Thousand & One Voices Africa Fund I Investors, Ltd v Africa Investments, LLC [2025] CICA (Civ) 9, the Cayman Islands Court of Appeal confirmed that, under section 36 of the Exempted Limited Partnership Act, the Cayman Court has the power to replace a general partner as liquidator with independent liquidators where the limited partnership agreement is silent on the limited partners' ability to do so. 

The relevant law: section 36 of the ELP Act 

Section 36 of the Exempted Limited Partnership Act (the ELP Act) sets out the procedure for liquidating and dissolving exempted limited partnerships. It also applies certain liquidation provisions in Part V of the Companies Act (As Revised) (the Companies Act) to the winding up of exempted limited partnerships.  

It states that: 

• an exempted limited partnership is to be voluntarily wound up in accordance with the provisions of the limited partnership agreement (ELP Act, section 36(1)) 
• the Court may make orders and give directions for the winding up and dissolution of an exempted limited partnership as may be "just and equitable" (ELP Act, section 36(3)(g)) 
• the affairs of an exempted limited partnership shall be wound up by the general partner as appointed by the limited partnership agreement unless the Court otherwise orders on the application of any partner, creditor or liquidator in accordance with section 36(3)(g) (ELP Act, section 36(13)) 

Applying to the Africa Fund litigation 

On 22 November 2023, a majority of limited partners of One Thousand & One Voices Africa Fund I, L.P. (the Partnership), resolved that it should be wound up. Pursuant to the terms of the Limited Partnership Agreement (the LPA), the general partner, One Thousand & One Voices Africa Fund I Investors, Ltd (the GP) was appointed as voluntary liquidator. 

On 25 January 2024, Africa Investments LLC (the Petitioner) presented a petition seeking the removal of the general partner as voluntary liquidator of the Partnership and the appointment of independent liquidators. The petition was supported by the limited partners holding approximately 97% in interest in the ELP. The LPA did not have any clause permitting the limited partners to remove the GP as voluntary liquidator and the Petitioner relied on sections 13(3)(g) and 13(13) in support of removal. 

The GP opposed the orders removing them and argued that the Court did not have jurisdiction to make the orders sought in the petition, including on the basis that: 

• the parties' commercial bargain contained in the LPA was "king" and because the LPA did not include any power to remove the GP, the Court had no jurisdiction to do so  
• section 36(13) of the ELP Act did not apply to the voluntary liquidation of an exempted limited partnerships and, to the extent it was engaged at all, it only applied to "fill gaps" 
• section 36(13) of the ELP Act did not include an express power of removal and therefore only applied where there was no voluntary liquidator in place 

Justice Kawaley dismissed the GP's jurisdictional challenge at first instance and appointed independent liquidators. The GP appealed to the Cayman Islands Court of Appeal (the CICA). 

The Cayman Islands Court of Appeal's judgment 

The CICA dismissed the GP's appeal on the following basis.

• Section 36 is merely a starting point – the fact that a voluntary liquidation of an exempted limited partnership is to be conducted in accordance with the terms of the limited partnership agreement under section 36(1) of the ELP Act is merely a starting point, but it is subject to exceptions.
• No question that the ELP Act applied – there was no question that sections 36(3)(g) and (13) of the ELP Act applied to voluntary liquidations. If section 36(13) did not apply to voluntary liquidations, it did not apply to anything at all because the identity of liquidators in compulsory winding up is a matter for the Court exercising discretion under the Companies Act.
• General powers prevail – while the Companies Act provisions relating to voluntary liquidation had limited application to an exempted limited partnership, those provisions were replaced by the general powers contained in section 36.
• The power of replacement – although section 36(13) did not include an express power of removal, it did include a power of replacement which was, on its face, unlimited and applied whether or not there was already a liquidator in place.

Accordingly, the CICA dismissed the appeal concluding that the first instance judge had the power to replace the GP as liquidator under sections 36(3)(g) and 36(13) of the ELP Act. 

Although not considered by the CICA, it remains to be seen when and in what circumstances the Court may be willing to exercise its discretion to remove a general partner as liquidator. As determined in a separate, earlier judgment of Justice Kawaley in the Africa Fund litigation, use of this power may be particularly appropriate in circumstances where a significant majority of the limited partners support the removal of the general partner.  

A recent example: Sensegain 

Ogier recently acted for a petitioner in the decision of Re Sensegain Vorak Investment L.P. (in voluntary liquidation) [2025] CIGC (FSD) 51, presenting a petition on the same basis as that in the Africa Fund.  

The general partner argued that an arbitration clause in the limited partnership agreement meant that the matters underlying the petition needed to be referred to arbitration as per section 4 of the Foreign Arbitral Awards Enforcement Act (the FAAEA) and in accordance with the principles in FamilyMart China Holdings Co Ltd v Ting Chuan (Cayman) Holding Corporation [2023] UKPC 33. Read more about these principles in our article: The Privy Council makes landmark decision on the arbitrability of winding up petitions. 

The petitioner in Sensegain argued that in circumstances where an overwhelming majority of unconnected economic stakeholders supported the petition (and noting that the petition had been carefully drafted to ensure none of the factual matters were able to be disputed), there was no "matter" which was required to be referred to arbitration. At the hearing, and following submissions by the petitioner, the general partner in that case ultimately agreed to the relief sought in the petition.  

Notably, the general partner accepted that the FAAEA did not apply given the careful drafting of the petition. As a result, the Court dismissed the application for the arbitration stay on the basis that there was no substantial dispute. In doing so, the Court helpfully observed that the general partner had conceded that the "views of the majority of the limited partners cannot properly be labelled as irrational", and this concession appears to have been an important factor in the Court's exercise of its discretion to make the orders sought.   

Whether a court will stay a petition will be highly fact specific. However, the decision in Sensegain is a helpful example of how, notwithstanding the existence of an arbitration clause, the issues raised in a petition to support an argument can fall outside of the FAAEA, relying on (a) the useful distinction drawn in FamilyMart between issues which are arbitrable and those which are not, as well as (b) the need for any issues which are arbitrable to be substantial.  

Conclusion 

Despite some of the outstanding questions noted above, the CICA's decision in Africa Fund is helpful for fund managers, investors and insolvency practitioners. It confirms that where the relevant limited partnership agreement does not set out any procedure to remove and replace the general partner as liquidator, the Court retains the power to do so in appropriate circumstances. 

How Ogier can help 

Ogier has one of the largest Dispute Resolution teams in our jurisdictions, advising on technical, strategic and procedural aspects across the spectrum of contentious commercial issues and disputes. 

Our restructuring and insolvency experts bring their creativity, knowledge and experience to provide a practical perspective on rapidly evolving cross-border assignments.  

For further insights or tailored legal advice on the rights of limited partners and general partners under the ELP Act, and the Court’s powers in relation to the ELP Act, please contact Ogier’s Dispute Resolution team.

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice