appeal presented by Fairfield Sentry Limited dismissed by the Eastern Caribbean Court of Appeal but upheld two previous judgments of the BVI Commercial Court. File Photo: VINO

The Court of Appeal also upheld the Commercial Court's decision that the alternative mutual mistake claims failed and endorsed the Commercial Court's reading of Bell v Lever Bros [1932] AC 161. The Court also dismissed one appeal brought by the defendants and held that the claims could not also be dismissed on the grounds that the net asset value (on which the redemption payments were based) had been certified under the Articles of Association.

Head of Litigation, Phillip Kite of Harneys, who acted for one defendant group, said that this is an important judgment which gives a great deal of certainty to investors who had redeemed, in some cases years before the Madoff fraud was uncovered. As the Court of Appeal said, "certainty is key in commercial transactions and parties must be able to know what their legal position is and to make decisions based on that knowledge".

The ECSC heard arguments in the $1.45 billion litigation last January in the British Virgin Islands. Fairfield was one of the main feeder funds which invested in Bernard L. Madoff Investment Securities Limited and therefore one of the largest victims of that fraud. The company filed hundreds of claw back claims against investors who had redeemed shares before the Madoff fraud was uncovered, both in the BVI and New York. The total value of these claims is in the region of US$7.5 billion.

For additional information, please refer to our previous updates or contact Phillip Kite at Philip.kite@harneys.com