CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow and Jae Shin, Appleby
4.3 Court Intervention The Cayman Islands courts can intervene in the selec - tion of arbitrators by upholding a challenge (see 4.4 Challenge and Removal of Arbitrators ). 4.4 Challenge and Removal of Arbitrators A challenge can be made to arbitrators if there are justifiable doubts as to their impartiality and inde - pendence, or if they do not possess the qualifications agreed by the parties (Section 18 of the Arbitration Act). Subject to any agreed challenge procedure, the challenge is first made to the arbitral tribunal, and if unsuccessful the challenge may be referred to the court (Section 19 of the Arbitration Act). The court has power to remove arbitrators on the grounds of physical or mental incapacity, failure to properly conduct the proceedings/failure to use rea - sonable dispatch, and where substantial injustice will be or has been caused (Section 20 of the Arbitration Act). 4.5 Arbitrator Requirements An arbitrator is required to disclose prior to appoint - ment and on a continuing basis any circumstances which might reasonably compromise their independ - ence of impartiality (Section 18 of the Arbitration Act). An arbitral tribunal may rule on a party’s challenge to the tribunal’s own jurisdiction, including any objections to the existence or validity of the arbitration agreement (Section 27 of the Arbitration Act). This gives effect to the principle of competence-competence, and it was expressly noted by the Cayman Islands court in Al - Haidar v Rao (KY 2024 GC 37, 15 April 2024) that “the competence-competence principle forms part of Cayman Islands law”. A challenge to the tribunal’s jurisdiction must be raised no later than submission of the statement of defence (Section 27 (4)). Appoint - ment or participation in the appointment of an arbi - trator does not preclude a party from challenging the tribunal’s jurisdiction (Section 27 (5)). 5. Jurisdiction 5.1 Challenges to Jurisdiction
5.2 Circumstances for Court Intervention The court has the power, at the request of either party, to rule on the jurisdiction of the arbitral tribunal if the tribunal has itself ruled that it has jurisdiction (Section 27 (9) of the Arbitration Act). The Arbitration Act does not contain a power for the court to review a negative ruling on jurisdiction by an arbitral tribunal, although an application for leave to appeal on a point of law might be possible. 5.3 Timing of Challenge A party may ask the court to decide on the jurisdiction of the arbitral tribunal within 30 days of notice of the tribunal’s ruling that it has jurisdiction (Section 27 (9) of the Arbitration Act). 5.4 Standard of Judicial Review for Jurisdiction/Admissibility In relation to a judicial review of a ruling by the arbi - tral tribunal as to its jurisdiction, the Cayman Islands courts have adopted the approach of the UK Supreme Court in Dallah Real Estate and Tourism Holding Co v Government of Pakistan (2010), UKSC 46 that the standard of judicial review is de novo ( Gol Linhas Aéreas SA v MatlinPatterson Global Opportunities Partners ( Cayman ) II LP (2020), 2 CILR 704, upheld at (2022), UKPC 21). 5.5 Breach of Arbitration Agreement The Cayman Islands courts are bound (in internation - al arbitration) to uphold the arbitration agreement by staying legal proceedings upon application by a party, unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is no dispute between the parties (Sec - tion 4 of the Enforcement Act). In Re BDO Cayman Limited (2018), 1 CILR 187 the court granted an anti- suit injunction and awarded indemnity costs against a party who, in breach of an arbitration agreement, had brought court proceedings in New York. As regards arbitrations seated in the Cayman Islands, the Cayman Islands courts are similarly bound to stay legal proceedings upon application by a party in respect of matters of the subject of an arbitration agreement, unless satisfied that the arbitral agreement
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