Understanding Cayman ELP disputes: rights, duties and winding up issues

The Cayman Islands exempted limited partnership is a flexible investment vehicle widely used for international private equity, venture capital, infrastructure and real estate funds.

However, in recent years issues involving Cayman Islands exempted limited partnerships (ELPs) have been increasingly litigated.

In this article, Ogier partner Jennifer Fox and managing associate Rebecca Findlay examine the growing body of jurisprudence, including decisions from the Cayman Islands Court of Appeal and the Privy Council, addressing general partner duties (GP duties), limited partner rights (LP rights), the characterisation of claims, arbitration clauses and the winding up of Cayman ELPs.

The foundations of Cayman ELP disputes

Disputes involving ELPs often require overseas litigators and arbitration counsel to engage with Cayman law for several reasons:

• the fund itself is Cayman registered

• the general partner is a Cayman company

• the general partner's duties are prescribed or governed by Cayman law

• the limited partnership agreement is Cayman-law governed

• relief is sought from the Cayman Court

The critical feature of an ELP is structural. An ELP has no legal personality distinct from its partners, which is the driver of many of the distinctive features of ELP litigation. An ELP is also not a company, a trust, an English limited liability partnership or a Delaware limited partnership, although its legal architecture draws on partnership, trust and contractual principles. This means that an attempt to reason by analogy from corporate vehicles (or from English limited liability partnerships) may highlight particular issues, however they must be used with care and do not displace the statutory scheme under the ELP Act. The absence of separate personality affects who owns property, who owes duties, who may sue, who must be sued, what relief can be granted and how a winding up is conducted.

ELPs are governed by the Exempted Limited Partnership Act (As Revised) (the ELP Act) which is supplemented by common law and equitable partnership principles to the extent not inconsistent with the ELP Act (section 3). However, the starting point for any ELP dispute should always be to look at the Limited Partnership Agreement (LPA), which governs the ELP, because the LPA can:

• define or modify duties

• regulate access to information

• prescribe dispute resolution mechanisms

• include non-petition provisions

• determine when a voluntary winding up begins

Key structural features of Cayman ELPs

No separate legal personality

An ELP is best understood as a bundle of statutory and contractual rights, obligations and limitations, which is a hybrid of partnership, trust and contract principles. Because it has no legal personality, the ELP itself cannot hold property, enter into contracts or be a party to proceedings (instead the statutory scheme provides that its property is held by the GP on trust, and its contracts are entered into by or on behalf of the GP). Section 33(1) of the ELP Act provides that legal proceedings by or against an ELP may be instituted by or against any one or more of the general partners.

The general partner

Every ELP must have at least one general partner (GP) registered with the Registrar of Exempted Limited Partnerships. The GP conducts all the business of the ELP and enters contractual arrangements on its behalf. The GP has unlimited liability for the debts and obligations of the ELP to the extent that the ELP’s assets are insufficient, as detailed in section 4(2) of the ELP Act.

The statutory trust

Under section 16(1) of the ELP Act, any rights or property of an ELP are held on trust by the GP as an asset of the ELP. Partnership assets do not form part of the GP’s own estate. This statutory trust is fundamental and means that claims for misappropriation of ELP assets are claims in respect of trust property. Remedies may focus on restoration of the trust fund.

Limited partners

Limited partners (LPs) are passive investors in a fund context with limited liability. According to section 14 of the ELP Act, they are not permitted to conduct the business of the ELP. Their rights and obligations are defined primarily by the Limited Partnership Agreement or Deed and the ELP Act statute.

The Limited Partnership Agreement

Cayman ELP law places strong emphasis on the contractual relationship between the partners. The LPA is the central governing document and will typically prescribe the economic terms, governance rights, restrictions on transfer, dispute resolution provisions (including arbitration and non-petition clauses), and the terms on which the ELP may be wound up. In any dispute or potential dispute, the first stage should always be to examine the LPA.

Relevant statutes

The principal legislation is the ELP Act, though the Partnership Act (2025 Revision) provides supplementary rules. Part V of the Companies Act (As Revised) applies to ELP winding up by virtue of section 36(3) ELP Act, modified as necessary. For example, references to companies should be read as a reference to an ELP.

General partner duties

The duties owed by the GP are central to many ELP disputes. The following three considerations must be understood at the outset:

The non-excludable good-faith duty

Section 19(1) of the ELP Act requires a GP to always act in good faith. This duty cannot be excluded or diluted by the LPA, and at minimum it requires the GP to act honestly and genuinely. The precise content will depend on the LPA, the statutory context and the facts.

Other duties may be modified

Beyond the irreducible good-faith obligation, a GP owes fiduciary duties to the limited partners. This includes duties of loyalty, disclosure and not to obtain a benefit at the expense of the partnership without the partners’ full knowledge and consent. However, other fiduciary duties - save for any irreducible core - may be modified or excluded by the express terms of the LPA. Many modern LPAs will calibrate the GP’s duties to reflect the practical realities of multi-fund management and related-party transactions. The ELP Act permits the LPA to provide that the GP may consider the interests of other partnerships it advises.

To whom are duties owed?

Because an ELP has no separate legal personality, it is incorrect to say that the GP owes duties to “the ELP” as if it were a distinct legal person. The expression “interests of the ELP” in section 19(1) is properly understood as shorthand for the partners’ collective interest and the partnership estate. The GP owes fiduciary duties directly to the LPs (Kuwait Ports Authority v Williams [2024] UKPC 32 at paragraph 35(3)). LPs do not generally owe fiduciary duties to the GP or to each other (section 19(2) ELP Act), unless the LPA provides otherwise.

Limited partner rights and safe harbours

Information rights under section 22

Section 22 of the ELP Act has been heavily litigated in recent years, such that the scope has now become much clearer with guidance from the Courts. Subject to any express or implied term of the LPA, each LP may demand and shall receive from a GP “true and full information regarding the state of the business and financial condition” of the ELP. In Dorsey Ventures Ltd v XIO GP Ltd (Grand Court, Mangatal J, 22 October 2018), the Court held that express language is needed in the LPA to exclude section 22 rights and an implied-term argument was rejected.

However, s.22 is not unlimited. In Neoma Manager (Mauritius) Limited [2025] CICA (Civ) 8, the Court of Appeal clarified that the inquiry is functional, fact-sensitive and proportionate: the GP need not produce documents that do not exist or cannot reasonably be obtained and is not required to provide all documents in its possession, only those necessary to meet the statutory entitlement.

In White Crystals Ltd v IGCF General Partner Limited (Grand Court, Ramsay-Hale CJ, 2 April 2024), the Court enforced an LCIA award requiring the GP to provide documents and information under the LPA in that case and the ELPA, rejecting public policy and confidentiality objections.

The right to bring proceedings: section 33(3)

Section 33(3) of the ELP Act affords LPs an express right to commence actions on behalf of the ELP where the GP has "without cause, failed or refused to institute proceedings". There is no requirement for leave to bring derivative proceedings under s.33(3). The LP may institute proceedings but must plead the facts and matters relied upon to show that the statutory test is met. If standing is challenged, that challenge is ordinarily addressed by strike-out application or preliminary issue. This provision is critical where the GP has failed or refused to bring ELP claims without cause, particularly where the GP is affected by an obvious and serious conflict of interest in relation to claims against persons closely associated with it or claims in which the GP itself is implicated.

Safe harbours and potential exposure to liability

Section 20(2) of the ELP Act provides a non-exhaustive list of activities that do not constitute taking part in the conduct of the business of the ELP, including:

• approving or disapproving amendments to the LPA

• consulting with and advising the GP

• presenting a winding-up petition

• acting as surety or guarantor

• participating in advisory committees or portfolio company boards

These safe harbours support governance oversight but do not authorise LPs to conduct the ELP’s business. An LP who participates beyond these boundaries may, in the event of insolvency of the ELP, become liable as though a GP during the period of improper participation (section 20(1)), but only to a person who transacted business with the ELP during that period with actual knowledge of the LP’s participation and who reasonably believed the LP to be a GP. As noted above, this section sets out a non-exhaustive list, and s.20(3) makes clear that conduct not listed will not necessarily constitute the taking part by that LP in the business of the ELP.

Direct versus derivative claims

The characterisation of claims in ELP disputes does not map neatly onto corporate law. The historic rule in Foss v Harbottle (1843) 2 Hare 461, 67 ER 189, which prevented shareholders from suing for reflective loss suffered by their company, has limited application to ELPs because the GP owes duties directly to the LPs and not to a separate legal entity.

In Kuwait Ports Authority v Port Link and others (CICA, unreported, 20 January 2023), the CICA held that LPs may bring direct claims against the GP for breach of duties owed to them, with the likely remedy being restoration of the trust fund rather than payment of compensation directly to the claimant LP. The Privy Council in Kuwait Ports Authority v Williams [2024] UKPC 32 (in which Ogier acted for the successful Respondents) then considered the s.33(3) derivative-claim gateway and emphasised the structural differences between ELPs and companies. The Privy Council also confirmed that an LP cannot bring both direct and derivative claims on behalf of the ELP against the GP in respect of the same subject matter.

In IGCF General Partner Ltd v White Crystals Ltd [2025] CIGC (FSD) 98 (Asif J), the Grand Court treated LP claims against the GP as direct claims for alleged breaches of the LP Deed, breach of fiduciary duty and breach of trust, rather than derivative claims, and stayed the proceedings in favour of arbitration. On appeal, IGCF GP Ltd and IGCF LP v White Crystals Ltd [2026] CICA (Civil) 3 addressed the stay decision and confirmed that even where an ELP is in voluntary liquidation, an inter-partes dispute between LPs and the GP may still fall within a broadly drafted arbitration clause. The Court’s supervisory jurisdiction under s.36(3)(g) of the ELP Act and s.129 of the Companies Act (as applied in the ELP context) continues alongside arbitration but does not automatically displace it.

The practical consequence for a potential litigant is that the characterisation of a claim (direct or derivative) affects both the correct respondent and the available procedural route.

Where the GP is conflicted, section 33(3) provides the mechanism for LPs to bring claims on behalf of the ELP. Where duties are owed directly to LPs, a direct claim may be available, but remedies may well focus on restoration of the partnership estate (although this issue is yet to be resolved by the Cayman Courts).

Arbitration and protective relief

An arbitration clause in the LPA may apply to disputes between LPs and the GP even after a voluntary winding up has commenced. The CICA decision in IGCF General Partner Limited v White Crystals [2026] CICA (Civ) 3 confirms that the Cayman court’s supervisory jurisdiction and the tribunal’s jurisdiction can coexist. A tribunal may determine inter partes liability and order restoration of the trust fund (subject to any relief that only the Court can grant), while consequential relief reserved to the court may be sought subsequently.

The existence of an arbitration agreement does not necessarily prevent urgent asset-protection measures being sought from the Cayman court. In Peakwave Investment Management Ltd v Energy Evolution GP Ltd [2026] CIGC (FSD) 7, the Grand Court stayed a winding-up petition in favour of arbitration but appointed provisional liquidators over the GP, with powers confined so as not to trespass on matters for the tribunal. The practical question is therefore how the issues should be allocated between the arbitral tribunal and the Cayman Court, and whether interim Cayman relief is needed to preserve assets or the effectiveness of the process.

Winding up and supervision by the Cayman Court

Section 36 of the ELP Act provides four principal routes to winding up an ELP:

• voluntary winding up pursuant to the LPA (section 36(1)(a)), upon the occurrence of any event or at any time specified in the partnership agreement

• by resolution of the partners (section 36(1)(b)), by all GPs and a two-thirds majority of LPs, unless the LPA provides otherwise

• automatic winding up (sections 36(7)–(9)), where the ELP has no qualifying GP registered for a continuous period of 90 days following a withdrawal event (death, liquidation, removal or dissolution of the GP), unless the LPA provides otherwise

• by the Court (section 36(3)), by application of Part V of the Companies Act, including the power under section 36(3)(g) to make such orders and give directions as may be just and equitable.

At the outset, you should always check the LPA. The contractual terms will typically specify the trigger events for voluntary winding up and may include non-petition clauses or arbitration provisions that affect or constrain the available routes.

Non-petition clauses

In In the Matter of Rhone Holdings LP (CICA, Rix JA, judgment delivered 19 November 2015), the Court of Appeal confirmed that a contractual non-petition clause in an LPA will be upheld. Section 36(3)(g) of the ELP Act did not override the equivalent non-petition provision in the Companies Law and such a clause is not contrary to public policy such that it ought not be upheld.

Supervisory jurisdiction

In One Thousand & One Voices Africa Fund I, L.P. (Grand Court, Kawaley J, 9 May 2024; affirmed [2025] CICA (Civ) 9, Martin JA), the Grand Court exercised the s.36(13) replacement power where approximately 97% of the economic stakeholders supported replacement of the GP as liquidator and the CICA confirmed that the Court had jurisdiction to do so. The exercise of that power remains fact sensitive.

The correct respondent

Because Part V of the Companies Act applies only as adapted to an ELP, company-law rules cannot be transposed mechanically. In ATP Life Science Ventures, L.P. [2025] CIGC (FSD) 106 (Asif J), the Grand Court held that a just-and-equitable petition by LPs must continue between the petitioning LPs and the GP not against the ELP itself because the ELP has no separate legal personality and section 33(1) requires proceedings to be by or against the GP. This is helpful guidance (at least in the context of a just-and-equitable petition by LPs) and may be treated as qualifying the earlier conflicting authority (Padma (Parker J, 2021) versus Formation Group (Kawaley J, 2022).

Read more: Cayman court revisits winding up petitions | Ogier

Practical checklist for overseas counsel or any litigant involved in an ELP-related dispute

Read the LPA first: The partnership agreement is the primary governing document and will contain critical provisions on duties, dispute resolution, non-petition clauses and winding-up triggers. Check amendments to the LPA as well as the original deed.

Identify whether the claim is direct or derivative: The characterisation affects the correct claimant, respondent, procedural route and available remedy. Do not assume corporate derivative-action principles apply. Trust and limited partnership principles may assist, but s.33(3) is the statutory gateway for Cayman ELP derivative claims.

Consider s.33(3) where the GP has failed or refused, without cause, to bring ELP claims: A serious GP conflict, including where the GP is implicated in the alleged wrongdoing, may support the statutory test, but the LP must still plead and establish the facts bringing it within s.33(3).

Preserve LP status: Where acting for an LP, ensure that the LP does not inadvertently take part in the conduct of the business of the ELP. Rely on the statutory safe harbours (section 20(2)) but do not exceed them.

Use section 22 information rights strategically but proportionately: Requests must be focused, functional and relevant to the business and financial condition of the ELP.

Check arbitration and non-petition clauses: The Cayman courts will uphold contractual dispute-resolution mechanisms. Plan the litigation strategy around them.

Identify the correct respondent and route in winding up: Proceedings are generally brought against the GP, not the ELP itself.  There are four statutory routes; the LPA may constrain which is available.

Expect the Cayman court to supervise where necessary: The Court has broad and pragmatic jurisdiction to protect partnership assets and stakeholder interests, including the appointment of provisional or replacement liquidators, but also to give effect to arbitration clauses where the substance of the dispute is arbitrable. Supervisory jurisdiction and arbitration can coexist.

Take Cayman advice early: The distinctive features of ELP law mean that assumptions drawn from English, Delaware or corporate analogies may be wrong. Early engagement with Cayman counsel will avoid procedural missteps and ensure that claims are properly characterised from the outset.

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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.

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