Offshore legal and fiduciary services provider Ogier has succeeded in striking out claims in the Cayman Islands brought against its client Arthur Andersen concerning that firm's role as auditor of the failed Trade and Commerce Bank, in liquidation.

The now-defunct accountancy firm audited the bank between 1988 and 2000. The claims, for over $800 million, alleged that Arthur Andersen had negligently failed to detect the allegedly dishonest behaviour of those controlling the bank who used it to massively defraud South American depositors who believed they were dealing with a bona fide institution.

The court followed a recent decision in the English Court of Appeal saying that the alleged fraud, if it had occurred, had been perpetrated by the controlling mind of the bank and it could not be permitted to benefit from illegal conduct of which it was itself the perpetrator.

Chris Russell, head of litigation at Ogier, said: ”It may seem unfair to creditors and shareholders but the logic is unassailable; put shortly, you can not have the right to sue an auditor for failing to inform you that you are yourself committing a fraud."