Thalassa Investments LP: Section 22 and Specific Discovery - Strategic Considerations for Limited Partners Seeking Information and Documents

CASE OVERVIEW

Re Thalassa Investments LP[1] concerned a just and equitable petition presented by limited partners[2] (the Petitioners) to wind up an exempted limited partnership, Thalassa Investments LP (the Partnership). The petition made serious allegations against the general partner, Thalassa Investments GP Ltd (the GP), including that certain Partnership assets had been sold to a related party at an undervalue.

The GP and the Partnership’s investment manager, Shuaa GMC (the IM), were both wholly owned subsidiaries of Shuaa Capital. The GP’s only support was from the Partnership’s largest LP, Goldilocks Investment Company Limited (Goldilocks), which was also managed by the IM and was 99.49% owned by Eshraq Investments PJSC (Eshraq), the buyer in the alleged related party sale.

The Petitioners alleged that the GP had abused its powers when conducting the business and affairs of the Partnership because the GP’s holding company, Shuaa Capital, had a greater financial interest in the success of Eshraq than in the Partnership. The Petitioners therefore alleged that the GP had acted in conflict of interest and that the sale constituted self-dealing.

Prior to the trial of the winding up petition, the Petitioners sought specific discovery from the GP of 37 categories of documents. The GP agreed to request certain categories of documents from third parties, and undertook to conduct reasonable searches in relation to other categories, whilst refusing to produce the balance on the basis that they fell outside of its discovery obligations. The Petitioners applied for specific discovery of that balance of documents, but were refused by the Chief Justice. The Petitioners also sought a KPMG valuation report held by a third party. For reasons outlined further below, the Court also refused this request.

A copy of the Thalassa ruling (dated 5 May 2026) can be found here.

SECTION 22 AND ABRAAJ AT A GLANCE

In Thalassa, the limited partner Petitioners sought documents from the GP through specific discovery prior to the trial of the petition under Order 3, rule 12(1)(i) of the Companies Winding Up Rules (2023 Consolidation), which provides the Court’s jurisdiction to order discovery in winding-up proceedings.

However, an alternative route in the Cayman Islands is to seek relief under section 22 of the Exempted Limited Partnership Act (ELPA), which grants a limited partner a substantive right to receive from the general partner true and full information regarding the state of the business and financial condition of the partnership.

We have previously written about the two leading Cayman authorities on section 22 in Abraaj-related ELP proceedings: (i) Justice Parker’s decision in Neoma at first instance; and (ii) the Cayman Islands Court of Appeal’s reversal of that decision in Abraaj General Partner VIII Ltd.

Key principles for present purposes are, in summary, as follows: [3]  

•  The statutory purpose of ELPA section 22 is to enable limited partners to have a “comprehensive understanding” of the business. The test is therefore a purposive and “functional” one.
• Where the general partner has provided information about what documents exist, the onus shifts to the limited partner to identify the deficiencies in the information provided.
• The Court must be satisfied that any disclosure order addresses “real and substantial” issues.
• The Court will not require an ELP to incur costs to be borne by all limited partners simply upon the request of one limited partner who cannot demonstrate practical advantage.

THALASSA AND THE DISCOVERY BOUNDARY

In Thalassa, the Petitioners proceeded by way of an interlocutory application for specific discovery within the winding-up proceedings rather than by separate section 22 proceedings. The Chief Justice expressly distinguished between section 22 and discovery.[4] Specific discovery, the Court held, is concerned with documents which are or have been within a party’s “possession, custody or power” and is restricted to matters in issue in the pleadings, while ELPA section 22 confers a substantive informational entitlement which is not the equivalent of the discovery process. Section 22, the Court added, “does not convert litigation discovery into a general informational entitlement, nor does it give a limited partner access to all information available to the general partner”.[5]

In relation to obtaining documents from third parties, the Court noted that “power” denotes a presently enforceable legal right to obtain the document from the person who holds it; and although Cayman authority accepts that “power” may also be established where there exists a subsisting arrangement amounting to practical control, mere expectation of compliance or corporate affiliation is insufficient – cogent evidence is required.[6] The Court also confirmed that, at a general level, the principles commonly traced to Peruvian Guano continue to apply, but are tempered by considerations of necessity and proportionality, particularly in the specific discovery context.[7]

COMPARING THE TWO ROUTES: FOUR ILLUSTRATIONS FROM THALASSA

Four of the disputed categories in Thalassa illustrate the key differences between section 22 and discovery. Although, as the Petitioners noted,[8] there can be practical overlap, the two routes serve different legal purposes and operate on fundamentally different doctrinal foundations, which shape both their reach and their limits.

1. The KPMG valuation

The Petitioners sought disclosure of a KPMG valuation, which was said to be probative to the undervalue allegation. The GP argued that it was not required to obtain the document because it was not within its possession, custody or power within the meaning of the discovery rules (although the Petitioners’ evidence was that the GP had seen drafts of the report and provided material to enable the valuation to be given). Conversely, the Petitioners argued inter alia that the GP could in practice obtain the document because the report had been commissioned by Goldilocks, which had no staff of its own and was managed by the IM (which also managed the Partnership), and so there were overlapping senior individuals between the relevant entities.

The Court refused the request.[9] It held that even if the GP may have participated in the preparation of the valuation and that overlapping individuals had been involved, those matters did not establish either present possession or a presently enforceable legal right of access, nor did they establish a subsisting arrangement or understanding amounting to control.[10] Inferences drawn from corporate relationships and overlapping roles were held to be insufficient.

The position under section 22 may have been different. The Cayman Islands Court of Appeal (the CICA) in Abraaj General Partner VIII Ltd confirmed that “in an appropriate case, the court does have power… to require the general partner … if it can do so without incurring unreasonable expense, again a fact-sensitive question – to seek to procure information that is not within its power”.[11] That formulation goes beyond the strict test of power required for discovery: contemplating that the GP may, in an appropriate case, be required to seek information that lies outside its own power altogether.

Further, in the English decision of Inversiones Friera SL v Colyzeo Investors II LP [2012] Bus LR 1136 (Inversiones) – which the CICA described as the leading authority on section 22 “by some distance”[12] – the Court said that to the extent that certain documents are not within the possession of the partnership, a limited partner could still make a request for the information (rather than the document per se) provided that this could be satisfied with reasonable ease and without undue expense.[13] By contrast, the discovery jurisdiction does not entitle the Court to compel a party to take steps to acquire a right of access which it does not already have.[14]

This does not mean that a section 22 application would have produced disclosure of the KPMG valuation in Thalassa. The proportionality overlay and the “real and substantial issues” threshold would have applied as further filters, and the Court would have needed to be satisfied that the valuation was properly required to allow the Petitioners a “comprehensive understanding” of the Partnership’s business and financial condition. That said, it is useful to note that the analytical starting point under section 22 is materially different from the strict “power” test that disposed of the specific discovery request in Thalassa.

2. Loan agreements and financing arrangements

The Petitioners also sought loan agreements, extensions, repayment materials and related correspondence in respect of various financing arrangements. The Court accepted that such arrangements might, in principle, bear on the financial position of the Partnership, but declined to order their production on the application: the request would encompass a substantial body of material of only indirect relevance to the pleaded issues for determination and was therefore disproportionate.[15]

Under section 22, the entitlement is not tethered to the issues for determination in the substantive litigation, but to the limited partner’s “comprehensive understanding” of the business and financial condition of the partnership. Documents from which the partnership’s liabilities derive were recognised in Inversiones as documents that a limited partner is in principle entitled to see for that purpose.[16] While the question of whether section 22 would in fact have reached the loan agreements in question cannot be determined in the abstract, there would appear to be a stronger argument that this request would go directly to a core section 22 concern (rather than being only of indirect relevance to a defined set of pleaded issues).

3. LPA amendment discussions and draft amendments

The Petitioners sought correspondence relating to proposed amendments to the LPA, including draft or abandoned amendments. The Court refused the request on the basis that it extended to draft or unimplemented proposals without identifying how such materials bore on the issues raised by the petition.[17]

Section 22 would not necessarily have produced a different outcome. Norris J in Inversiones excluded from the entitlement materials concerning “what might have been (offers that were unsuccessfully solicited, applications which failed, proposals that did not come to fruition, drafts which were subsequently altered)”, on the basis that such materials are not relevant to “the current state and prospects of the partnership”.[18]

4. The information/document distinction

The Petitioners also sought to identify the owner of an email address said to have been provided access to information in connection with the Eshraq bid. The Court declined the request, observing that it was “not, in substance, a request for the disclosure of documents, but a request for information”, and that the Petitioners had not demonstrated that the email address was necessary for the fair determination of the pleaded issues.[19]

Section 22 is expressed more broadly. The statutory entitlement is to “true and full information” – language deliberately not limited to the production of documents only.[20] Cayman authority contemplates that the obligation may extend to explanations of how decisions were taken, the identification of judgment calls and, where necessary, the creation of new documents such as schedules in order to satisfy the obligation.[21]

While it is difficult to say based on the scant information provided in the ruling whether disclosure of the email address holder would have been required under section 22, it may have been on somewhat stronger footing than in a discovery process, which cannot compel a respondent to provide explanations, identifications or facts that have not already been reduced to documentary form.

TAKEAWAYS FROM THALASSA

It is not unusual for limited partners to have only incomplete or partial information about an ELP’s affairs. The ELPA precludes a limited partner from taking part in the conduct of the ELP’s business, at risk of jeopardising its limited liability.[22] The commercial appeal of the structure lies precisely in that passivity, with the limited partner relying on the general partner and the investment manager to run the ELP on a day-to-day basis.

Where a limited partner has concerns about the general partner’s management of an ELP, Cayman law provides more than one procedural avenue by which important information may be obtained. If a request for information is ignored or inadequately answered, the limited partner may seek relief under section 22 of the ELPA by originating summons, invoking its substantive statutory right to true and full information regarding the partnership’s business and financial condition. As demonstrated by the Abraaj and The Port Fund litigation, section 22 can be an effective mechanism for obtaining information and documents which may assist a limited partner in evaluating or pursuing substantive claims prior to doing so. Alternatively, where substantive proceedings are already on foot or urgent, the discovery process provides a well-established procedural framework for obtaining documents relevant to the pleaded issues in dispute. As Thalassa illustrates, however, section 22 and discovery serve different purposes and engage different legal tests. Neither regime is inherently wider than the other; rather, each applies a different legal test directed to a different objective, and may therefore produce different outcomes on materially similar facts. Understanding those differences will enable limited partners to select the procedural route best suited to their objectives. Stakeholders of private equity funds may find the following points useful when weighing the choice between section 22 and the discovery process:

(i) availability – section 22 can be pursued as an independent, substantive right to information by way of originating summons, whether or not litigation is on foot.[23] Discovery is a procedural right available only within existing proceedings. Where information is needed before any claim is issued, section 22 is the primary route.

(ii) the insolvency trade-off – where the limited partner’s concerns may sound in a winding-up, a sequencing choice arises. Pursuing section 22 first preserves the wider informational entitlement but may delay the commencement of substantive insolvency proceedings where urgent protective relief is conferred (such as a stay on proceedings, preserving assets and/or the appointment of liquidators). Presenting a winding-up petition first secures such protections but largely confines the limited partner’s information rights to the discovery process. Because the information obtainable under section 22 may itself be needed to plead a petition properly, sequencing is a practical question dependent on the particular context.

(iii) scope and connection to the issues – the scope of an application under section 22 can cover “information”, including explanations, the identification of judgment calls and, where necessary, newly created documents such as schedules, and is anchored to the limited partner’s entitlement to a comprehensive understanding of the partnership’s business and financial condition. Discovery compels production of pre-existing documents only, and only those connected to the issues for determination. Where an explanation or the basis of an assessment is needed (rather than an existing document), or where it is unclear whether any pre-existing documents will provide the information sought by a limited partner, section 22 may be the better route.

(iv) reach to third-party material – where potentially relevant documents are held by third parties or affiliates, production of such documents can be compelled by discovery only where the document is subject to the “power” of a party to the proceedings, which requires (on the part of the party) a presently enforceable right of access or a subsisting arrangement or understanding amounting to control; corporate relationships and overlapping management are not enough, and the burden lies on the applicant to prove that such right or arrangement exists. Under section 22, the court may in an appropriate case require the general partner to obtain – or even to seek to procure – information not within its possession or power, subject to reasonable expense. Where material is held by a related entity or another third party, section 22 may prove the more promising route.

(v) shared limitation of proportionality – the tests for obtaining discovery and disclosure under section 22 are both tempered by proportionality considerations. As Thalassa and Inversiones show, neither avenue ordinarily reaches material concerning “what might have been” – drafts, abandoned proposals or transactions that did not proceed – because such material does not bear on the current state and condition of the partnership. Both are also subject to a proportionality filter: under discovery, by reference to the fair determination of the issues raised by the pleadings; under section 22, by reference to the “functional test” and whether the cost of compliance would unduly fall on the partnership as a whole for the benefit of a single limited partner.

(vi) the general partner’s perspective – the position is asymmetrical. A general partner that successfully resists discovery of documents held by affiliates on the “power” ground could still be compelled to disclose the same documents on a separate section 22 application later, where the “power” constraint does not bite in the same way.

[1] [2026] CIGC (FSD) 32.
[2] The Petitioners held approximately 25% interest and also had the support of other LPs with an additional 22.75% interest in the Partnership, which together accounted for 95% of the unaffiliated interest in the Partnership.
[3] Abraaj General Partner VIII Ltd at [39].
[4] Thalassa at [15], citing both Neoma and Abraaj General Partner VIII Ltd.
[5] Ibid.
[6] Thalassa at [18]–[21].
[7] Thalassa at [17].
[8] Thalassa at [15].
[9] Thalassa at [35].
[10] Thalassa at [33]. The Court made this finding even though the GP, during discovery, had agreed to request documents from subsidiaries and third parties in respect of certain categories, while resisting disclosure of others held by the same entities. This demonstrated, it was argued, a practical ability to obtain documents held outside the GP’s immediate possession.
[11] Abraaj at [39](8) (emphasis added). Although the CICA did not expressly say so, this appears to be based on Inversiones at [37], where Norris J held that where the partnership does not have possession of a document, nor a direct right against a third party to obtain it, the limited partner could nonetheless request the general partner to request it from a third party, and the general partner ought to comply (without undue expense to the partnership) – however it would be a matter for the general partner’s discretion how far to pursue the request.
[12] Abraaj at [37], referring to Inversiones (Norris J).
[13] Inversiones at [32]: the information in question was necessary to explain any element of the fair market value of a particular investment.
[14] Thalassa at [18].
[15] Thalassa at [45]–[46].
[16] Inversiones at [23](m) (per Norris J): “limited partners may see the documents from which the liabilities derive”; adopted by the CICA in Abraaj at [28].
[17] Thalassa at [53]-[55].
[18] Inversiones at [23](r).
[19] Thalassa at [50].
(20] The Court in Thalassa itself acknowledged the distinction at [15]: section 22 “confers a substantive right to information”, whereas discovery “is concerned with the disclosure of documents”. The same point was made by Parker J in Neoma at [34]: section 22 entitles limited partners “to true and full information (and not just documents) regarding the state of the business and financial condition of the Partnership, which is an obligation that goes wider than the discovery obligations”.
[21] Neoma at [75](f).
[22] ELPA, s.20.
[23] Although if substantive proceedings have commenced, the plaintiff / petitioner limited partner would likely need to seek a stay of those proceedings pending determination of the section 22 originating summons: see Neoma.