Abraaj GP: Limited Partner Information Rights

In a Nutshell

The Cayman Islands Court of Appeal (“CICA”) held that while the information rights of a limited partner (“LP”) under section 22 of the Exempted Limited Partnership Act (2021 Revision) (“ELPA”) are broad, the information to be provided to a limited partner (“LP”) must be proportionate.

This means that the Cayman Islands Court (the “Court”) will take a balanced approach to
applications under section 22. It will scrutinise LP demands for extensive disclosure to ensure that the statutory right serves its intended purpose whilst not being used to apply pressure on a general partner (“GP”) as part of a broader dispute. The guidance provided will be key to GP/LP information disputes.

Background

The CICA considered the scope of the statutory right of a LP to information concerning the state of the business and financial condition of an exempted limited partnership (“ELP”) in section 22 of the ELPA. This provision can often become an area of dispute between LPs and a GP in a contentious scenario where the right has not been modified or excluded by the partnership agreement. Several first instance decisions in recent years had generally taken an expansive view on the extent of the information that a GP could be compelled to provide under section 22, but this decision now represents the authoritative current guidance on the application of the statutory right.

Guidance on Section 22

Under section 22, LPs are entitled to a broad range of information and documents, but this is not without limitation. The Court applies a functional test to determine whether the documents and information sought are “properly required to allow the LP a comprehensive understanding of the state of the business and of its investment in it, and of the risks attaching to that investment.”

In applying this test, the Court will take account of the following considerations:

• If properly kept, the ELP’s financial accounts should in most cases provide at least a substantial part of the necessary information, albeit the right in section 22 is broader than accounts alone.
• Once a GP provides information about what documents exist, the onus shifts to the LP to explain why those documents are insufficient, or to identify other documents that exist and would be just as material as those identified by the GP. The LP cannot simply identify a particular document and demand all other documents falling within the same category. A fact-specific investigation is required as to what else is necessary to comply with the statutory obligation. This will depend on “the nature of the partnership business, its mode of conduct, and the terms of the governing documents read in the light of current business practice”.
• To grant relief under section 22, the Court must be satisfied that the information sought is appropriate to address real and substantial issues and will have practical effect.
• The provision of information must be proportionate. The GP is not required to provide information if doing so would require it to incur unreasonable expense, although it can be required to obtain information from other parties where it is within the GP’s power to do so.

Decision

The CICA allowed the appeal and determined that the judge at first instance had been wrong to grant summary judgment in favour of the LP without sufficiently engaging with the arguments raised by the GP that it had satisfied the statutory obligation through the documents and information already provided.

¹ [2025] CICA (Civ) 8