CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow and Jae Shin, Appleby
1. General 1.1 Prevalence of Arbitration
2. Governing Legislation 2.1 Governing Law
International arbitration as a method of resolving dis - putes is growing in the Cayman Islands, where dis - putes have more traditionally been resolved in court proceedings. Both domestic parties as well as inter - national parties to an agreement that has connections with the Cayman Islands are choosing arbitration seated in the Cayman Islands, especially where the contract is subject to substantive Cayman Islands law, to avail themselves of the advantages of arbitration in an environment which is well-staffed with experienced practitioners and arbitrators, and where the courts support and uphold arbitration. Further, international arbitration awards are frequently the subject of recog - nition and enforcement proceedings before Cayman Islands court. 1.2 Key Industries The Cayman Islands is a leading international financial centre, and the industries which experience interna - tional arbitration activity in the Cayman Islands reflect that, so the preponderance of international arbitration activity concerns financial services, including invest - ment funds in particular, and professional services. These are industries which are prevalent in the Cay - man Islands and are attracted by the advantages of arbitration such as confidentiality. 1.3 Arbitration Institutions The Cayman International Mediation and Arbitration Centre (CI-MAC) is used for international arbitration in the Cayman Islands, but Cayman-seated arbitra - tions also take place before other non-Cayman-based institutions including the LCIA and the AAA, as well as on an ad-hoc basis. No new arbitral institutions have been established in the Cayman Islands in the last 12 months. 1.4 National Courts The specific court designated to hear disputes related to international and domestic arbitrations is the Finan - cial Services Division (the FSD) of the Grand Court of the Cayman Islands. Judges in the FSD are experi - enced in dealing with arbitration matters.
There are two statutes which govern international arbitration in the Cayman Islands. The Arbitration Act 2012 (the “Arbitration Act”) applies to Cayman Islands seated arbitrations. The Foreign Arbitration Awards Enforcement Act (1997 Revision) (the “Enforcement Act”) gives effect in the Cayman Islands to the New York Convention, and applies to non-domestic arbi - tration awards made in a state which is party to that convention. The Arbitration Act is largely based on the UNCITRAL Model Law but also contains elements based on the English Arbitration Act 1996. The ways in which it diverges from the Model Law include: • the default number of arbitrators, which is a single arbitrator under the Arbitration Act; • there are more extensive provisions under the Arbitration Act concerning the severability of the arbitration agreement; • there is power in certain circumstances for the court to grant leave to appeal on a question of law, whereas there is no such power under the Model Law; and • the time limit for applying to the court to set aside an award is 30 days under the Arbitration Act, as opposed to three months under the Model Law. The Enforcement Act is substantially similar to the (repealed) English Arbitration Act 1975. 2.2 Changes to National Law There have been no significant changes to Cayman Islands arbitration law in the past year, and no legisla - tion is pending.
3. The Arbitration Agreement 3.1 Enforceability
To be enforceable under Cayman Islands law, an arbi - tration agreement must be in writing and contained in a document signed by the parties, or an exchange of letters, faxes, telegrams, electronic communica - tions or other means of communication that provide
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