LP's right to information in a Cayman Islands exempted limited partnerships
开曼群岛有限合伙人在有限合伙中的知情权
The Cayman Islands exempted limited partnership (ELP) is a popular form of investment vehicle. Here, Carey Olsen's James Noble and Yang Yang examine the extent of the rights of limited partners to the information in the investment vehicles in which they often entrust their money with another person for a long period of time and remedies as may be available under the Cayman statues and common law.
开曼群岛豁免有限责任合伙（下称“有限合伙”）是全球私募首选的的投资工具。有限合伙人通常会通过该等投资工具将其资金在很长一段时间内委托给他人管理，本期文章将探讨有限合伙人对该等投资工具的知情权范围，以及有限合伙人在开曼群岛法律和普通法下可以采用的救济措施。
A Cayman ELP is commonly established pursuant to an Exempted Limited Partnership Agreement (the LPA). Often the relevant fund documents would also include a private placement memorandum and any subscription agreements and side letters (the Fund Documents). While the general partner manages the ELP pursuant to the Fund Documents, the Fund Documents commonly include specific provisions on the right of a limited partner to receive information in relation to the ELP.
The rights of a limited partner to receive information in respect of the ELP are also expressly provided by section 22 of the Exempted Limited Partnership Law (2018 Revision) (the ELP Law):
"Subject to any express or implied term of the partnership agreement, each limited partner may demand and shall receive from a general partner, true and full information regarding the state of the business and financial condition of the exempted limited partnership."
Despite these often general provisions, we have been on numerous occasions instructed to provide Cayman Islands law advice regarding the specific rights of a limited partner to information under the Fund Documents, as well as any statutory rights to receive information.
In Dorsey Ventures Limited and XIO GP Limited (FSD 38 of 2018, unreported 22 October 2018) the Grand Court of the Cayman Islands provided clarification regarding the extent of a limited partner's rights to information in an ELP.
LP's Right to information
Under section 22 of the ELP Law a limited partner may “demand and shall receive from a general partner true and full information regarding the state of the business and financial condition of the exempted limited partnership.” However, these rights are also "subject to any express or implied provisions of a partnership agreement".
In general, the general partner would be in breach of the Fund Documents if it fails to provide information expressly provided by the Fund Documents. The general partner would also be in breach of the statutory provisions of the ELP Law in respect of the "true and full information regarding the state of the business and financial conditions" of the ELP, unless the Fund Documents contain any express provisions which would disapply the obligation to provide this information.
The statutory rights to information may be restricted by the terms of the Fund Documents. Often we see provisions subject the statutory rights to any such conditions and restrictions as the general partner may reasonably prescribe, including that the general partner may decline to provide confidential or proprietary information in connection with the investments.
In Dorsey, the general partner refused the limited partner's request for information and documents on the basis that the express provisions in the LPA excluded the general rights to receive information under section 22 of the ELP law.
The Cayman Court dismissed such interpretation and clarified that the statutory obligation under the ELP Law was greater than what was provided under the LPA and a reasonable man could not have understood that the parties to have the intention to exclude the statutory right to wider categories of information by providing specific information and documents. Therefore, to restrict or exclude the limited partner's right to receive "true and full information" would require express language by the Fund Documents. The Cayman Court clarified that providing certain class or categories of documents could not have the effect of restricting or excluding the general partner's statutory obligation under section 22 of the ELP Law.
In order to satisfy this obligation, the general partner must keep proper books and accounts such as is necessary to give a true and fair view of the business and financial condition of the Fund and to explain its transactions.[1]
Often the Fund Documents entitle a limited partner to appoint a director to the board of the general partner. As a director, the person appointed by the limited partner is prima facie entitled to access the books and records of the general partner, in order to allow him to discharge his fiduciary duties owed to the general partner.
The English Court (whose judgments are considered persuasive in the Cayman Islands) has been willing to curtail a director’s right to inspect the books of a company (a right which is established at common law), where access to such information would be for an improper purpose or one which is injurious to the company.[2] However in the absence of clear proof to the contrary, it is assumed that a director seeking access to the books and records of the company is doing so for a proper purpose.[3]
Pursuant to the ELP Law, where the partnership agreement contains provisions to establish and regulate boards and committees (including any powers to be exercised by such boards and committees), a member appointed to such a board or committee may enforce these provisions. The fact that the member is not a party to the partnership agreement in his own right does not prevent the member from enforcing the provisions of the agreement.[4]
A person appointed by the limited partner to the board or committee may thus enforce the relevant provisions under the Fund Documents and is entitled to obtain such documents as is necessary to be able such person to properly consider and review the subject of the tasks of such board or committee in order to properly discharge his/her duties as an member of such board or committee (there is also an argument that such a term is implied into the Fund Documents so as to give it business efficacy[5]).
Remedies
The ELP Law provides that that the partners of the ELP are free to agree on the remedies for any breach in the partnership agreement and these remedies will not be unenforceable solely on the basis that they are penal in nature.[6] In the absence of any contractual remedies, a number of common law and equitable remedies are available to the limited partner in respect of the breaches of the general partner to provide information.
In respect of the general partner's breach of the Fund Documents in failing to provide Information, and the information to which the limited partner is entitled under the ELP law, the limited partner would typically have following remedies available to it: (i) an order for specific performance, compelling the general partner to provide information; and (ii) a claim for damages against the general partner for a breach of the LPA and/or the ELP law, where it can be established that the limited partner suffered a loss as a result of the breach.
Pursuant to s.64 of the Companies Law (2018 Revision), on the application of a shareholder holding not less than one-fifth of a company’s shares, the Court may appoint an inspector to examine the company’s affair and report back to the Court. This would potentially a remedy for limited partner who is also a minority shareholder of the general partner, an entity incorporated in the Cayman Islands.
The circumstances in which an inspector is likely to be appointed would require the applicant to show that the business of the company is being conducted fraudulently or unlawfully, in a manner oppressive to it members, or that the company members have not been given all the information with respect to its affairs which it might reasonably respect.[7]
Finally, the ELP Law states that the Court is entitled to make any winding up order it considers to be just and equitable.[8] The non-provision of the information may provide a sufficient basis for the limited partner to present a winding up petition on the just and equitable ground if coupled with prima facie evidence of misconduct or management. The usual grounds to present such a petition would be on the basis of: (i) lack of probity on the part of directors; (ii) the need for an independent investigation of company’s affairs; (iii) deadlock; (v) oppression of minority shareholder; (iv) loss of substratum; and (v) quasi-partnership.
However, in some cases the Fund Documents provide that a limited partner may not present a petition to wind up the Fund on just and equitable grounds. S.95(2) of the Companies Law provides that "the Court shall dismiss a winding up petition or adjourn the hearing of a winding up petition on the ground that the petitioner is contractually bound not to present a petition against a company". The Court in the Cayman case of Re Rhone Holdings L.P held that this article is incorporated by reference into the ELP Law. Accordingly, the LP would not be entitled to equitable relief by way of a winding up order.[9]
The decision in Rhone Holdings L.P. has been questioned on public policy grounds in light of the purpose of just and equitable relief (being to provide an equitable remedy to a party where they may not otherwise be entitled to any relief). Whilst the decision in Rhone is currently the position of the common law in Cayman, there may be an argument (which we note was not before the Court in Rhone), that where a petition is being presented to obtain relief in respect of prejudicial, oppressive or fraudulent conduct, the public policy consideration of enforcing the terms of a contract (as endorsed by the Court of Appeal in Rhone) are outweighed by the public policy of ensuring that a wrongdoer or fraudulent party does not benefit from the improper conduct.
An original version of this article was published by Asia Business Law Journal, February 2020.
© Carey Olsen 2020.
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[1] Section 21 of the ELP Law
[2] Conway v Petronius Clothing Co Ltd and others [1977] 1 WLR 72
[3] Conway applied in Oxford Legal Group Ltd v Sibbasbridge Services Plc [2008] EWCA Civ 387
[4] Art. 24(1) of the ELP Law
[5] The Moorcock [1889] 14 PD 64
[6] Art. 25 of the ELP Law
[7] Buckley on the Companies Act (12th Ed), pg 364
[8] Section 36(3)(g)
[9] [2016 (1) CILR 46]. In this case, in relation to a Cayman exempted limited partnership, the limited partnership agreement contained a provision prohibiting the presentation of a petition on just and equitable grounds. The limited partners, wishing to wind up the fund (and being unable to do a so as the consent of all parties was required to wind up the fund and a GP was unwilling to consent), presented a petition, on an ex parte basis, seeking, amongst other orders, the appointment of a provisional liquidator over the Fund.
有限合伙一般根据豁免有限合伙协议（“合伙协议”）成立。相关的基金文件通常包括一份募集说明书、相关认购协议及补充协议（“基金文件”）。普通合伙人根据基金文件管理有限合伙，基金文件通常会有专门的条款约定有限合伙人获取豁免有限合伙企业相关信息的权利。
《开曼群岛豁免有限合伙企业法》（2018年修订）（《 ELP法》）第22条还额外明确规定了有限合伙人获得有关有限合伙相关信息的权利：
“受限于合伙协议的任何明示或默示条款，各有限合伙人都可以要求普通合伙人提供且普通合伙人应当提供能反映有关豁免有限合伙企业营业状况和财务状况的真实且完整的信息。”
虽然有这些一般性的规定，笔者经常就有关有限合伙人根据基金文件获得信息的具体权利以及获取信息的法定权利提供开曼法律意见。
在Dorsey Ventures Limited 诉XIO GP Limited （FSD 38 of 2018，未公布，2018年10月22日判决）案中，开曼大法院对在有限合伙中有限合伙人的知情权的范围做了一些阐述。
有限合伙人的知情权
《ELP法》第22条中（上文所述）有限合伙人获取信息的法定权利在任何时候都“受限于合伙协议中的任何明示或暗示的条款” 。
一般来说，如果普通合伙人未能提供基金文件明确约定的信息，就有可能违反基金文件的约定。同时普通合伙人会违反《ELP法》中有关提供有限合伙“业务和财务状况的真实及全部资料”的法定义务，除非基金文件有明示或默示条款约定不适用提供有关信息的义务。
如上，法定知情权可能受限于基金文件的条款规定。我们经常看到条款约定对法定知情权做一些限制，诸如普通合伙人可以根据其合理判断地给法定知情权加以条件和限制，包括普通合伙人可拒绝提供与投资相关的保密或专有信息。
在Dorsey 案中，普通合伙人以合伙协议有明示条款排除了根据《ELP法》第22条获取信息的一般权利为由，拒绝有限合伙人要求提供信息和文件的请求。
开曼大法院驳回该解释并澄清《ELP法》下的法定权力比有限责任合伙协议中的条款范围更广，而一般理性的人不可能因为基金文件下有提供特定资料和文件的条款就认为双方有意排除法定知情权下提供更广的提供信息及文件的权力。因此，限制或排除有限合伙人获得“真实及全部资料”的知情权需要基金文件非常明确地书面进行约定。开曼大法院在本案中澄清了基金文件规定提供某些类型或类别的文件并不能起到限制或排除普通合伙人在《ELP法》下第22条的法定义务的作用。
为了满足该等义务，普通合伙人须保留账簿和帐目，以便能真实及公允地反应基金的营业及财务状况，并解释基金的交易详情。1
根据《ELP法》，如合伙协议约定了成立及约束董事会及委员会的条款（包括董事会及委员会可行使的任何权力），被委派至该等董事会或委员会的成员可以执行该等条款。该成员本身并非合伙协议的签署方并不妨碍该成员执行合伙协议的有关条款。2
受有限合伙人委派加入董事会或委员会的成员可执行基金文件下的相关条款，并有权取得必要的文件，让该成员适当地考虑及审阅该董事会或委员会的审议事项，以履行其本人作为董事或成员的责任。
救济措施
《ELP法》规定了有限合伙的合伙人可以自由在合伙协议中就违反任何合伙协议条款的救济措施进行自由约定，而且这些救济措施不会仅仅因为具有处罚性质就不得执行。3在基金文件未规定任何救济措施的情况下，如普通合伙人违反提供信息义务时，有限合伙人可以采取多种普通法和衡平法下的救济措施。
在普通合伙人未按照基金文件约定提供资料的情况下，有限合伙人通常可以以下的救济措施：（1）取得法院命令，对普通合伙人执行要求其提供信息，及（2）如能证明有限合伙人因普通合伙人违约行为而遭受损失时，对普通合伙人违反合伙协议及／或《ELP法》的行为向普通合伙人索赔。
根据开曼群岛公司法（2018年修订）（“《公司法》”）第64章规定，开曼公司中持有超过公司20%股份的股东可像法院申请委任调查员调查公司事务，并后向法庭进行汇报。如果有限合伙人同时又是普通合伙人（注册在开曼的公司）的股东，那么有限合伙人可能可以采取此项救济。
如申请人能够证明公司业务虚假或违法，以压迫手段对待公司股东，或该公司股东无法取得所有有关可查阅的公司事务资料，在这些情况下，法庭很有可能支持委任调查员调查公司事务的状况。4
最后，《ELP法》规定法院会考虑公平及公正的原则而决定是否同意清盘令。5如果还有不正当行为或管理的的初步证据，不提供信息可为有限合伙人以公平及公正的理由提出清盘申请提供充分的依据。提交这类别的清盘申请一般基于以下理由：（1）部份董事失职、（2） 需要对公司事务进行独立调查、（3）僵局、（4）压迫少数股东/合伙人、（5）合作基础不存、及（6）准合伙。
然而近来基金文件禁止有限合伙人以公平及公正原则基础向法院递交清盘申请的约定越来越普遍。《公司法》第95（2）条规定“申请人违反合同规定向法院提交清盘申请的，法院须撤回清盘申请或延期审理”。在Rhone Holdings L.P.案中，法庭判决公司法的该条款被有效并入了《ELP法》而对有限合伙适用。根据此法例，有限合伙人在这种情况下无法获得法院清盘这项救济。6
结语
开曼群岛豁免有限责任合伙仍是当今非常常用的投资工具。虽然一般不需要投资者参与其管理，但是其机制仍相当灵便，可以满足商业各方的商业需要。
1) 《 ELP法》第22条
2) 《ELP法》第24（1）条
3) 《ELP法》第25条
4) No translation
5) 《ELP法》第36（3）（g）条
6) [2016 (1) CILR 46] 在该案中，有限合伙协议约定禁止基于公正和公平的理由提出清盘申请。希望清盘基金的有限合伙人（该案中有限合伙人不能清盘是因为基金文件规定必须征得各方同意才能对基金清盘，而普通合伙人不同意）单方面提出了清盘等申请，寻求法院对该基金指定临时清盘人。
