Banking Act under siege on Isle of Man

Lawyers are currently awaiting a decision by the Isle of Man's Manx Appeal Court in the case of Re Atrium Trading. If the appeal is upheld, the decision could have serious ramifications for the jurisdiction's current banking legislation.
Atrium was wound up by order of the Manx High Court on 22 November 1999. It was then investigated by the Financial Supervision Commission (FSC) of the Isle of Man government.
The former Atrium directors were questioned under the 1998 Banking Act about the company's affairs. Under the act, any person providing information to the FSC is given statutory protection against self-incrimination. The act came into force on 31 March 1999, as the 1975 act was not in keeping with human rights legislation.
However, the directors of Atrium refused to answer the questions, claiming that the FSC could not exercise these powers in relation to matters that took place before the act came into force.
The directors' petition was heard in 2001 in the High Court of Justice. His Honour Deemster Cain ruled that the directors were required to answer the question regardless of the date of the activities.
But the directors appealed before the Staff of Govern-ment Division (the Manx Appeal Court) on 25 March 2002, and the judgment is now awaited. If the directors are successful in their appeal, the judgment would likely lead to a change in banking legislation.
“It would mean the act would have to be amended to give the regulators statutory power to investigate events which occurred prior to that date,” said Seth Caine of Cains Advocates Solicitors & Notaries, the partner acting for the FSC.
The decision is expected within the next month.