Section 17: Protection of creditors

17. Protection of creditors (1) A protected cell company shall— (a) inform any person with whom it transacts that it is a protected cell company; and (b) for the purposes of that transaction, identify or specifiy the cell in respect of which that person is transacting, unless that transaction is not a transaction in respect of a particular cell. (2) Where in contracention of subsection (1), a protected cell company— (a) fails to inform a person that he is transacting with a protected cell company, and that person is potherwise unaware that, and has no reasonable ground for believing that, he istransacting with a protected cell company; or (b) fails to identify or specify the cell in respect of which a person is transacting, and that person is otherwise unaware of, and has no reasonable ground for knowing which cell he is transacting with, the directors shall— (i) notwithstanding anything to the contrary in the company’s Articles or in any contract with the company or otherwise, incur personal liability towards that person in respect of the transaction; and [Issue 1] P42 – 10 Revised Laws of Mauritius (ii) have a right of indemnity against the non-cellular assets of the company, unless they were fraudulent, reckless or negligent, or acted in bad faith. (3) Notwithstanding subsection (2) (i), the Court may relieve a director of his personal liability where he satisfies the Court that he ought fairly to be so relieved because he— (a) was not aware of the circumstances giving rise to his liability and, in being not so aware, was neither fraudulent, reckless or negligent, nor acted in bad faith; or (b) he expressly objected, and exercised such rights as he had as a director, whether by way of voting power or otherwise, so as to try to prevent the circumstances giving rise to his liability. (4) Where, pursuant to subsection (3), the Court relieves a director of his personal liability, the Court may order that the liability shall be met from such of the cellular or non-cellular assets of the protected cell company as may be specified in the order. (5) Any provision in the Articles and any other contractual provision under which the protected cell company may be liable, which purports to indemnify directors in respect of conduct which would otherwise disentitle them to an indemnity against non-cellular assets by virtue of subsection (2) (ii), shall be void.