Cayman Islands

Part I: what can be enforced?

1. What counts as an arbitral “award” that can be enforced?

An arbitral award is defined in the Cayman Arbitration Act 2012 (Arbitration Act) as a decision of an arbitral tribunal on the substance of the dispute between the parties to an arbitration.

The following “domestic” awards, namely awards made by an arbitral tribunal in an arbitration seated in the Cayman Islands (irrespective of where the parties are based), can be enforced with leave (permission) from the Grand Court of the Cayman Islands (Grand Court):

• money awards
• awards containing injunctions ordering or prohibiting the doing of acts
• decisions in preliminary/provisional proceedings
• decisions or awards by arbitral tribunals granting provisional measures and declaratory awards

“Foreign” arbitral awards, namely those granted by tribunals seated in foreign jurisdictions (irrespective of whether they are a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention)), have no direct operation in the Cayman Islands. So, for example, foreign awards cannot directly be enforced in the Cayman Islands by execution (as if they were domestic judgments) without first obtaining leave from the Grand Court.

2. Formal requirements that an award needs to conform with to be enforceable

To be enforceable in the Cayman Islands, arbitral awards must be in writing and signed by the arbitral tribunal. Unless the parties have agreed that no reasons are to be stated in the award, or that it is made for the purposes of recording a settlement reached between the parties, the award must state the reasons on which it is based. The date of the award and the seat of the arbitration must also be stated in the award.

The party seeking to enforce a foreign arbitral award will also be required to produce:

• the duly authenticated original award or a duly certified copy of it
• the original arbitration agreement or a duly certified copy if it
• where the award or agreement is in a foreign language, a certified translation of it (certified by an official or sworn translator or by a diplomatic or consular agent)

3. Orders on interim measures: enforceability

a. Domestic awards

The Grand Court has the power to issue interim measures in relation to domestic arbitration proceedings, exercised in accordance with its own procedures and in consideration of specific principles of international arbitration, and may order a party to:

• maintain or restore the original position of the other party pending determination of the dispute
• take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process
• provide a means of preserving assets out of which a subsequent award may be satisfied, or
• preserve evidence that may be relevant and material to the resolution of the dispute

b. International commercial arbitration awards

The Grand Court has the same power to issue interim measures in support of arbitration proceedings as it has in relation to the proceedings in court, irrespective of whether the Cayman Islands is the seat of arbitration.

4. Emergency awards: enforceability

a. Domestic awards

There is no express statutory basis for the granting of, and recognition and enforcement of, domestic emergency awards. However, we think it is arguable that a court would treat an emergency award granted in a Cayman-seated arbitration as being directly enforceable (assuming the arbitration was governed by institutional rules that provide for emergency arbitration).

b. International commercial arbitration awards

There is no express statutory basis for recognition and enforcement of foreign emergency awards. However, we think it is arguable that the Grand Court would treat an emergency award granted in a foreign-seated arbitration as an “award” for the purposes of enforcement in the Cayman Islands (assuming the arbitration was governed by institutional rules that provide for emergency arbitration).

Part II: resisting enforcement

5 a. How are awards set aside?

All foreign and domestic arbitral awards are now, subject to the party wishing to enforce the award applying for the leave of the Grand Court to do so, enforceable through a straightforward process as if the award were a judgment made by the Grand Court.

Once leave has been granted, the person against whom enforcement of the foreign or domestic arbitral award is sought has 14 days to apply to the Grand Court to set aside the order granting leave. The Grand Court’s procedural rules prescribe the requirements for any application to set aside a foreign or domestic arbitral award.

b. Can enforcement be resisted if the respondent has not formally applied to set aside the award?

Yes, a party may, with the leave of the Grand Court, and upon notice to the other party or parties and to the arbitral tribunal, appeal to the Grand Court on a question of law arising out of a domestic arbitral award made in the proceedings.

Conversely, absent the existence of one of the grounds for refusing a foreign arbitral award set out at question II(5)(d) below, the Grand Court is obliged to enforce the foreign arbitral award. However, where an application has been made to set aside or suspend an award in the country in which the foreign arbitral award was made, the Grand Court may adjourn its enforcement proceedings and/or order the person against whom the foreign arbitral award is made to give security.

c. Can non-parties seek annulment?

An arbitral tribunal’s jurisdiction derives from the agreement of the parties to the arbitration, so non-parties will only have such rights as have been given by the consent of all parties concerned.

d. Grounds to seek setting aside

The Grand Court will not grant leave to enforce a domestic arbitral award where the arbitral tribunal had no jurisdiction to make the award.

A party appealing to the Grand Court on a question of law arising out of a domestic arbitral award will only be granted leave to do so where:

• the determination of the question will substantially affect the rights of one or more of the parties
• the question is one that the arbitral tribunal was asked to determine
• based on the arbitral tribunal’s findings of fact, its decision on the question is obviously wrong, or the question is one of general public importance and the decision of the tribunal is at least open to serious doubt
• despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question

The enforcement of a foreign arbitral award may be refused by the Grand Court in the following circumstances:

• A party to the arbitration agreement was (under the law applicable to them) under some incapacity.
• The arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the arbitration agreement was made.
• A party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present their case.
• The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration.
• The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place.
• The award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the laws of which, it was made.
• The award is in respect of a matter which is not capable of settlement by arbitration.
• It would be contrary to Cayman Islands public policy to enforce the award.

e. Timelines to seek setting aside

As set out at question II(5)(a) above, once leave has been granted, the person against whom it is sought to enforce the foreign or domestic arbitral award has 14 days to apply to the Grand Court to set the leave aside.

f. Grounds to resist enforcement

The grounds for refusing recognition and enforcement of an arbitral award in the Cayman Islands are construed relatively narrowly. The somewhat limited grounds are set out in the Foreign Arbitral Awards Enforcement Law (1997 Revision) and include:

• that the arbitration agreement was not valid
• that the award debtor was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present their case
• that the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration
• that the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, with the law of the country where the arbitration took place
• that the award has not yet become binding on the parties
• that the award is in respect of a matter which is not capable of settlement by arbitration (such as criminal or matrimonial disputes), or if it would be contrary to public policy to enforce the award

g. Which court to go to for setting aside?

Applications to set aside leave to enforce the foreign or domestic arbitral award are made to the Grand Court as the court of first instance in the Cayman Islands.

h. Formal requirements before court can grant setting aside

The Grand Court’s procedural rules prescribe that every application for leave to set aside the grant of leave to enforce a foreign or domestic arbitral award must:

• include a concise statement of the remedy or relief claimed and (where appropriate) the questions on which the applicant seeks the determination or direction of the Grand Court
• give details of the arbitration award being challenged by the applicant, showing the grounds for any such challenge
• where the applicant claims an order for costs, identify the respondent against whom the claim is made
• for domestic arbitral awards, specify the section of the Arbitration Act under which the application is brought
• show that any statutory requirements have been satisfied

i. Do courts grant stay on enforcement as an interim measure?

Where a question arises as to whether an arbitration agreement has been concluded or whether the dispute which is the subject matter of the proceedings falls within the terms of such an agreement, the Grand Court may determine that question or give directions for its determination, in which case it may order the proceedings to be stayed pending the determination of that question.

j. What is the appellate mechanism against the decision of the court of first instance?

Judgments, orders and decrees of the Grand Court are appealable to the Court of Appeal for the Cayman Islands, in accordance with the applicable statutory and procedural rules. With leave, it is possible to appeal an order setting aside or refusing to set aside an ex parte order granting leave to enforce an arbitral award.

Part III: enforcing awards

6. New York Convention applicability

The Cayman Islands enforcement regime is one which provides for a clear presumption in favour of recognition and enforcement of foreign awards, including those awards made pursuant to arbitrations determined under the New York Convention, which are enforceable within the Cayman Islands.

7. Timelines for enforcement

The length of time that enforcement proceedings take depends on the circumstances, however, it is intended to be a relatively quick process. Awards for interim relief can potentially be granted leave to be enforced in the Cayman Islands on an urgent basis in a matter of days.

8. Which court to go to? Relation with location of assets?

An application for leave to enforce a foreign arbitral award against persons or assets located in the Cayman Islands is made to the Grand Court in the prescribed form, supported by affidavit evidence.

9. Can non-parties resist enforcement?

Generally, those who are not a party to the arbitration agreement pursuant to which an arbitral tribunal is granted jurisdiction will not be bound by that tribunal’s award.

10. Compelling disclosure of local assets? How to identify assets available for enforcement?

Once a foreign arbitral award has been recognised and the Grand Court’s grant of leave has not been set aside, the foreign arbitral award can be enforced in the same manner as an order of the Grand Court.

The successful applicant who is owed money may then seek further orders that the debtor be orally examined on the question of all necessary particulars to enable recovery of that debt. Further relief is also available with leave of the Grand Court in the form of orders compelling third parties to disclose information pertaining to assets within the Cayman Islands, even where that information would otherwise be confidential.

11. Are third-party funded awards enforceable?

The concept of third-party funding is still relatively new to the Cayman Islands. Although each application would be determined on a case-by-case basis, the distinct common law offences of maintenance and champerty have been expressly repealed by statute in relation to proceedings before the Grand Court, although the position with respect to third-party funding of arbitration is unclear.

However, the Grand Court has, in at least one decision, held that a proposed funding agreement intended to fund the enforcement of a New York arbitral award in the Cayman Islands was not unenforceable as a matter of public policy.

12. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

The Grand Court has the power to issue interim measures in relation to arbitration proceedings, exercised in accordance with its own procedures and in consideration of specific principles of international arbitration, and may:

• order a party to maintain or restore the original position of the other party pending determination of the dispute
• order a party to take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process
• order a party to provide a means of preserving assets out of which a subsequent award may be satisfied
• order a party to preserve evidence that may be relevant and material to the resolution of the dispute
• grant an injunction or other interim measure

each of which may be applied for and made on an ex parte basis where appropriate to do so.

The Grand Court may also recognise and grant leave to enforce an interim award granting protective measures. Although untested, by parity of reasoning, it is possible that the Grand Court may also recognise and grant leave to enforce an emergency arbitral award.

13. Formal requirements for enforcement application: what documents need to be filed in court?

The application for the enforcement of a foreign arbitral award must be made in the prescribed form to the Grand Court and must be supported by an affidavit stating the name and usual or last known place of residence or business of the applicant and of the person against whom it is sought to enforce the award, stating either that the award has not been complied with or the extent to which it has not been complied with at the date of the application and exhibiting the following:

• the duly authenticated original award or a duly certified copy of it
• the original arbitration agreement or a duly certified copy of it
• where the award or agreement is in a foreign language, a certified translation of it (certified by an official or sworn translator or by a diplomatic or consular agent)

14. Enforcing awards that have been annulled/set aside at other courts. Enforcing when an annulment application is pending at a foreign court

The Grand Court will refuse an application for leave to enforce a foreign arbitral award that has been annulled or set aside by the foreign court of the country in which the arbitral award was made.

Where an application to annul a foreign arbitral award is pending before the foreign court of the country in which the award was made, the Grand Court may adjourn its proceedings and/or order the person against whom the award is made to give security.

15. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

Several execution options are potentially available once leave has been granted to enforce an award in the same manner as a judgment (or once a Cayman judgment has been obtained pursuant to an action on an award). These include:

• writs of fieri facias (the seizure and sale of the judgment debtor’s goods and chattels sufficient to satisfy the debt and costs of the execution)
• garnishee proceedings (where a person indebted to the judgment debtor is required to pay moneys owed directly to the judgment creditor)
• charging orders (providing to the judgment creditor security over the judgment debtor’s assets)
• the appointment of receivers
• attachment of earnings orders, whereby a judgment debtor’s salary is paid directly to the judgment creditor

16. What is the procedure for repatriation of sums awarded after obtaining an order for enforcement?

There is no general procedure for the repatriation of sums awarded pursuant to the satisfaction of a judgment debt. However, the repatriation of assets in the form of cash may be subject to the specific procedures of applicable financial institutions. Jurisdiction-specific advice may be required.

17. Do courts grant orders for security for costs?

Yes, applications for security for costs may be made at any stage in the proceedings, but it is best if such applications are made without delay.

18. Exchange control regulations: do they affect payments to foreign award holders?

There are no applicable exchange control regulations in the Cayman Islands. Jurisdiction-specific advice may be required.

19. Enforcing awards from non-New York Convention places

All foreign arbitral awards are now subject to the leave of the Grand Court. These are enforceable through a straightforward process as if they were a judgment of the Grand Court.

20. Enforcing against sovereigns

We anticipate that the Grand Court would follow decisions of the English courts that arbitration is a consensual procedure and that if a state has agreed to submit to arbitration it has rendered itself amenable to such process as may be necessary to render the arbitration effective. This extends to proceedings for the enforcement of the arbitral award.

21. Appellate mechanism available?

Yes. Judgments, orders and decrees of the Grand Court are appealable to the Court of Appeal for the Cayman Islands, in accordance with the applicable statutory and procedural rules.

Part IV: enforcing domestic awards

22. Timelines for enforcement

The length of time that enforcement proceedings take depends on the circumstances, however it is intended to be a relatively quick process.

23. Which court to go to? Relation with location of assets?

An application for leave to enforce a domestic arbitral award against persons or assets located in the Cayman Islands is made to the Grand Court in the prescribed form, supported by affidavit evidence.

24. Compelling disclosure of local assets? How to identify assets available for enforcement?

Once a domestic arbitral award has been recognised and the Grand Court’s grant of leave has not been set aside, the domestic arbitral award can be enforced in the same manner as an order of the Grand Court.

The successful applicant who is owed money may then seek further orders that the debtor be orally examined on the question of all necessary particulars to enable recovery of that debt. Further relief is also available with leave of the Grand Court in the form of orders compelling third parties to disclose information pertaining to assets within the Cayman Islands, even where that information would otherwise be confidential.

25. Are third-party funded awards enforceable?

The concept of third-party funding is still relatively new to the Cayman Islands. Although each application would be determined on a case-by-case basis, the distinct common law offences of maintenance and champerty have been expressly repealed by statute in relation to proceedings before the Grand Court, although the position with respect to third-party funding of arbitration is unclear. However, the Grand Court has, in at least one decision, held that a proposed funding agreement intended to fund the enforcement of a New York arbitral award in the Cayman Islands was not unenforceable as a matter of public policy.

26. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?

The Grand Court has the power to issue interim measures in relation to arbitration proceedings, exercised in accordance with its own procedures and in consideration of specific principles of international arbitration, and may:

• order a party to maintain or restore the original position of the other party pending determination of the dispute
• order a party to take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process
• order a party to provide a means of preserving assets out of which a subsequent award may be satisfied
• order a party to preserve evidence that may be relevant and material to the resolution of the dispute
• grant an injunction or other interim measure

each of which may be applied for and made on an ex parte basis where appropriate to do so.

27. Formal requirements for enforcement application: what documents need to be filed in court?

The application for the enforcement of a domestic arbitral award must be made in the prescribed form to the Grand Court and must be supported by an affidavit stating the name and usual or last known place of residence or business of the applicant and of the person against whom it is sought to enforce the award, stating either that the award has not been complied with or the extent to which it has not been complied with at the date of the application and exhibiting the following:

• the duly authenticated original award or a duly certified copy of it
• the original arbitration agreement or a duly certified copy of it
• where the award or agreement is in a foreign language, a certified translation of it (certified by an official or sworn translator or by a diplomatic or consular agent)

28. Filing for enforcement when application for annulment is pending

The Grand Court will not grant leave to enforce a domestic arbitral award where an application for annulment is pending before another judge of the Grand Court.

29. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?

See our response to question III(15).

There may also be common law causes of action that may be pursued against related parties, including for restitution of assets.

30. Do courts grant orders for security for costs?

Yes, applications for security for costs may be made at any stage in the proceedings, but it is best that these are made without delay.

31. Appellate mechanism available?

Yes. Judgments, orders and decrees of the Grand Court are appealable to the Court of Appeal for the Cayman Islands, in accordance with the applicable statutory and procedural rules.