CAYMAN ISLANDS Law and Practice Contributed by: Sam Dawson, Peter Sherwood and Denis Olarou, Carey Olsen
However, the parties should remember that the court has considerable discretion on the issue of costs and may well take pre-action conduct into consideration. 3.2 Statutes of Limitations Limitation periods are prescribed by statute (Limita- tion Act (1996 Revision)) and vary depending on the nature of the claim. Claims under contract expire six years after the date of breach. Claims under a special- ty (including a deed) expire 12 years after the cause of action arises, unless a shorter period of limitation is otherwise applicable. Tort claims have a six-year limitation period, which usually commences on the date the damage is incurred. However, for personal injury, libel and slander, the time limit is three years. Actions for sums recoverable under a legislative pro- vision must be started within six years from the date when the sum became due. Claims for recovery of land can be commenced up to 12 years from the date when the right accrued (or 30 years if the claim is against the Crown). In certain circumstances, limitation periods can be extended or abrogated altogether. For example, if the right of action has been deliberately concealed from the claimant by the defendant or if there has been acknowledgement of the debt or part payment, the limitation period may be extended. Limitation periods do not apply at all in claims by a beneficiary against a trustee for fraudulent breach of trust or the recovery for trust property. In all cas- es, aside from limitation, claims might also become barred through delay (“laches”). In claims against companies, limitation stops running if a winding-up order is made in respect of the company. Special limi- tation rules apply to some claims available to com- pany liquidators. It is also possible for parties to enter into standstill agreements to pause limitation periods while settlement negotiations are ongoing. 3.3 Jurisdictional Requirements for a Defendant The basis of jurisdiction is primarily territorial and is generally founded on valid service of proceedings within the jurisdiction. As such, a person residing in the Cayman Islands or a company incorporated there may generally be sued in the Cayman Islands courts
as of right, provided service of process is duly effect- ed. However, it is potentially open for such a defend- ant to argue that the Cayman Islands courts should decline to exercise their jurisdiction over the claim in favour of a foreign court that is clearly and distinctly the more appropriate forum (forum non conveniens). Jurisdiction Agreements and Service Outside the Cayman Islands The Cayman Islands courts will also generally accept jurisdiction over disputes that fall within an express jurisdiction agreement between the parties designat- ing the Cayman Islands courts as the forum. Jurisdic- tion may also be established if a defendant voluntar - ily submits to the jurisdiction of the Cayman Islands courts by other means, for example by taking a sub- stantive step in the proceedings (other than by disput- ing jurisdiction). Jurisdiction may also be established over defendants residing or registered outside of the Cayman Islands if the court grants leave to serve the originating pro- cess outside of the Cayman Islands (see 3.5 Rules of Service ). 3.4 Initial Complaint Writ of Summons Generally, a civil lawsuit is commenced by filing and serving a writ of summons. The writ may be indorsed with the full statement of claim from the outset. How- ever, this is not mandatory and the writ may also be issued indorsed with a concise statement of the nature of the claim and the relief sought. In the latter case, the statement of claim must be filed as a sepa- rate pleading at a later date. Originating Summons Other specialist modes of commencing proceedings are also available, and, in some cases, they are man- datory. For example, proceedings that are not expected to involve any substantial dispute of fact, such as where the plaintiff seeks declaratory relief in relation to issues of pure contractual interpretation or interpretation of law, may be commenced by an originating summons, which invokes a simplified procedure to trial. The origi- nating summons must set out the statements or ques-
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