Lombard, Odier & CIE and others (Appellants) v Fairfield Sentry Limited (in Liquidation) (Respondent)

Lombard, Odier & CIE and others (Appellants) v Fairfield Sentry Limited (in Liquidation) (Respondent)

Transaction documents such as monthly emails, contract notes, and statements issued by the Fund's administrator are binding certificates under Article 11 of the Fund's Articles, making the NAV per share and redemption price final and conclusive for redemptions. Therefore, redemption payments made on this basis are not recoverable in restitution, as redeeming members gave good consideration by surrendering their shares.

Citation
[2014] UKPC 9
Parties
Appellant/respondent: Fairfield Sentry Limited (in Liquidation); Respondents: Migani and others; Appellants: Lombard, Odier & Cie and others; Appellants: Credit Suisse London Nominees Limited and another; Appellants: Quilvest Finance Limited and others; Appellants: UBS AG New York and others
Jurisdiction
United Kingdom
Judgment Date
16 April 2014
Procedural Posture
Civil Appeal / Judgment on Preliminary Issues From the Court of Appeal of the British Virgin Islands
Outcome
Appeals allowed in part; appeal on Issue 4 dismissed.
Legal Topics
Redemption of Shares, Mutual Funds, Unjust Enrichment, Certification Clauses, Ponzi Scheme Liability
Company Law Insolvency Restitution Redemption of Shares Mutual Funds Unjust Enrichment Certification Clauses Ponzi Scheme Liability

Case Brief

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Parties

Fairfield Sentry Limited (in Liquidation)

Appellant/respondent

Migani and others

Respondents

Lombard, Odier & Cie and others

Appellants

Credit Suisse London Nominees Limited and another

Appellants

Quilvest Finance Limited and others

Appellants

UBS AG New York and others

Appellants

Procedural Posture

Civil Appeal / Judgment on Preliminary Issues From the Court of Appeal of the British Virgin Islands

Legal Issues

  1. 1 Whether transaction documents recording NAV per share or redemption price are binding certificates under Article 11 of the Fund's Articles
  2. 2 Whether redemption payments made on the basis of mistaken NAV are recoverable by the Fund in liquidation
  3. 3 Whether redeeming members gave good consideration for redemption payments

Ratio Decidendi

Transaction documents such as monthly emails, contract notes, and statements issued by the Fund's administrator are binding certificates under Article 11 of the Fund's Articles, making the NAV per share and redemption price final and conclusive for redemptions. Therefore, redemption payments made on this basis are not recoverable in restitution, as redeeming members gave good consideration by surrendering their shares.

Court Disposition

Appeals allowed in part; appeal on Issue 4 dismissed.

Orders

  • Appeals against the decision of Bannister J and the Court of Appeal on Preliminary Issues 1, 2 and 3 allowed, save as to information posted on the Citco website.
  • Appeal against their decision on Issue 4 dismissed.