The Privy Council handed down judgment in the case of GFN SA & Ors v The Liquidators of Bancredit Cayman Ltd [2009] UKPC 39 on 4th November 2009. The case concerned an appeal against an order of the Grand Court of the Cayman Islands regarding the power to make orders for security for costs in respondents’ favour. The respondents had been previously appointed joint official liquidators of the company and the appellants had sought to submit proof of debts.

The Privy Council stated that the powers of the Courts were covered by section 74 of the Companies Law (2004 Revision) and Order 23 of the Grand Court Rules of Court 1995. Discussing cases such as In re Semenza, ex p Paget [1894] 1 QB 15, the Privy Council stated that the statutory provisions did not themselves confer jurisdiction, but regulated an inherent jurisdiction of the Courts.

Going on to discuss CT Bowring & Co (Insurance) Ltd v Corsi Partners Ltd [1994] 2 Lloyd's Rep 567, the Privy Council stated that litigation to resolve the submission of proofs of debts by the appellants would constitute commencing new litigation for the purposes of section 74 and Order 23. As such, security for costs could be granted and the appeals were therefore dismissed.