Vol 20 (2023) - Issue 5

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Understanding the Inspectorship Remedy in the Cayman Islands

Synopsis
The Grand Court of the Cayman Islands has recently seen an uptick in applications by aggrieved shareholders of Cayman-incorporated companies for the appointment of inspectors under s 64 of the Companies Act (2023 Revision). The inspectorship remedy, which allows the Court to appoint inspectors to investigate and report on the affairs of a Cayman company, has historically been rarely used by shareholders of Cayman companies,1 and the recent increase in inspectorship applications may be attributable to a broader increase in shareholder activism in the context of ongoing global economic uncertainty.
In three recent decisions, the Grand Court was asked by aggrieved shareholders to consider whether to appoint inspectors. However, in only one of those decisions was the applicant successful. The recent decisions provide helpful guidance on the circumstances in which a Court will appoint inspectors and illuminate the broader purposes and benefits of the remedy.