The custodian and administrator did not, however, escape unscathed, after the judge made carefully explained findings of breach of contract, negligence and even gross negligence against them.

The judgment provides useful guidance as to the duties and responsibilities of administrators, custodians and service providers when faced by a unique and often high-risk business model. It also contains important guidance on the application of the principle of reflective loss in funds disputes involving overlapping structures.

Whilst the Cayman attorneys for both parties have published articles reporting on the outcome, this article provides an objective analysis of the judgment and the key legal issues that the Court has raised.

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