A series of legal battles spanning nearly 30 years and at least four jurisdictions, including the Cayman Islands, continues to have ramifications for the parties involved.
The dispute stems from widespread damage caused to property in Liberia in the early 1990s Liberian civil war, leading to property holders filing a lawsuit in the U.S. against an insurance company that was not honoring their claims.
The property holders lost that case in 1995, and an anti-suit injunction was eventually filed in 2001 to prevent the property holders from suing in other jurisdictions. Nevertheless, a party that included British Virgin Islands attorney Martin Kenney and Irish businessman Garrett Kelleher initiated a lawsuit in Cayman in 2008 against the insurer, which was based in Cayman at the time.
Mr. Kenney said that, according to his understanding of the law, the Cayman Islands lawsuit, which was filed in July 2008, should not have triggered the U.S. injunction because no U.S. parties were involved in the case: The defendant was a Cayman company, the plaintiffs were Liberian, and he was a BVI-based attorney.
However, the insurer filed a motion for contempt of the injunction in 2015 against Mr. Kenney, Mr. Kelleher and another individual involved in the litigation, and in July 2016, the U.S. court issued a “memorandum opinion and order” in favor of the insurer.
After Messrs. Kenney and Kelleher did not attend a December 2016 court hearing to determine the amount of damages suffered by the insurer, a U.S. judge ordered the U.S. Marshal to “take all necessary steps to effect the arrest and extradition” of the two men.
No such arrests or extraditions have been made since then – Mr. Kenney has said the judge’s order has no legal basis – but Mr. Kelleher is now aiming to sue several parties that he claims gave him poor advice about being involved with the lawsuit.
Mr. Kelleher filed a motion on April 27 to make two branches of the accounting firm Deloitte and several attorneys jointly liable for violating the anti-suit injunction. He is also seeking documents from the original 1990s U.S. case to see if any other parties, including some attorneys in Cayman, should also be held liable.
In his motion, which is posted on the financial services site OffshoreAlert, Mr. Kelleher claims that Mr. Kenney approached him about helping to fund the Cayman lawsuit against the insurer.
“The investment [funding the lawsuit] sounded prudent and I then turned to Deloitte Ireland … to analyze the investment and to advise me how to best structure the investment, were I to make it, from a tax and personal liability perspective,” Mr. Kelleher states in his motion, adding, “I only briefly reviewed the document at that time, and looked to Deloitte to review it for me as part of its analysis and due diligence of the proposed Kenney investment generally. I certainly did not read that small portion of that document that disclosed the existence of the ‘No Actions’ Injunction or otherwise perceive that making this proposed investment might otherwise be in any way unlawful.”
Mr. Kelleher also criticized Mr. Kenney in his motion.
“I also relied upon the advice of Attorney Kenney in making this passive investment. While it is true that we never had a formal attorney/client relationship, I never dreamed that merely making the investment he sought could ever put me in the position in which I now find myself,” he stated. “In short, while Mr. Kenney technically was not ‘my lawyer,’ he was a lawyer and I thought him to be both an honorable and competent lawyer and could be relied upon as such.”
Mr. Kelleher also said Mr. Kenney told him, “I got you into this mess, I will get you out of it,” after he realized he would be penalized.
In a response to the Cayman Compass, Mr. Kenney disputed that statement.
“I understand that Mr. Kelleher has also suggested that I gave him certain assurances to ‘get him out of’ the case. That is incorrect. Mr. Kelleher explained to me that he had limited resources and could not pay for his own defense,” Mr. Kenney said. “I suggested that he file with the court short statements essentially adopting the same jurisdictional defenses I was relying on as he, like me, is neither a U.S. citizen nor resident and in my view he had robust jurisdictional defenses which, when properly understood and applied, should result in a finding of no liability.”
The BVI attorney added that the insurer is prepared to settle with the parties over the anti-suit injunction.
“I am myself going through the same settlement process, and I have encouraged Mr. Kelleher to do the same,” he said.