CAYMAN ISLANDS Trends and Developments Contributed by: Matthew Dors, Natascha Steiner-Smith, Annalisa Shibli and Kirsten Bailey, Collas Crill
Contested applications In line with the well-established “pro-enforcement” policy embedded in the New York Convention and adopted by the Cayman Islands, the Grand Court has developed a practice of granting applications for leave to enforce foreign arbitral awards on the papers, with - out the need for an oral hearing (see, for example, the recent case of In the matter of Section 5 of the Foreign Arbitral Awards Enforcement Act (1997 Revi - sion) (Unreported, 8 March 2024)). Where there is no opposition to the enforcement action, this can result in significant time and costs savings for the applicant. However, irrespective of the relatively straightforward procedures available in the Cayman Islands for the enforcement of foreign judgments and arbitral awards, when contested, enforcement proceedings have the potential to be protracted and expensive, and parties should be mindful as to the position on costs as well as their duty to give full and frank disclosure in con - tested enforcement proceedings. A prime example of protracted enforcement proceed - ings is the case of Gol Linhas Aereas SA v MatlinPat- terson Global Opportunities Partners (2022) UKPC 21, which ran for over three years from commencement in the Grand Court to final determination by the Judicial Committee of the Privy Council. Recent decisions of the Grand Court in relation to applications to set aside ex parte orders granting leave to enforce foreign arbitral awards illustrate the types of challenges that might be faced by an appli - cant wishing to enforce a foreign award in this juris - diction. It is noteworthy that all of these challenges to enforcement were ultimately dismissed by the Grand Court. However, the time and costs associated with contested in-person hearings (including, in Al-Haidar v Rao , the costs of instructing foreign law experts) were incurred as a result of the defendants contesting the enforcement of the award, notwithstanding that the Grand Court had determined the initial applications for leave to enforce in favour of the applicants. In the Matter of Al-Haidar v Rao et al (Unreported, 8 March 2024) On 23 December 2022, the plaintiff applied by ex parte originating summons for leave to enforce a provisional
indication thereon, under the law of the country where the Convention Award was made; • the defendant 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 Convention 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 Convention 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 law of which, it was made; • the Convention Award is in respect of a matter that is not capable of settlement by arbitration; or • it would be contrary to public policy to enforce the Convention Award. The Arbitration Act 2012 (the “Arbitration Act”) extends the relevant provisions of the Enforcement Act in rela - tion to enforcement of foreign arbitration awards to all arbitrations, regardless of where such award is made. An application for leave to enforce an arbitral award may be made by ex parte originating summons. If the application is successful, the resultant order usually provides for judgment to be issued in the Cayman Islands in the same terms as the foreign award (pro - vided that a prescribed period has elapsed without the ex parte order being challenged). A foreign arbitral award becomes enforceable upon the expiry of the 14-day period after service of the enforcement order, during which time period the defendant has an opportunity to file an opposition application. If an opposition application is filed, the foreign arbitral award will only become enforceable once the Grand Court has disposed of said applica - tion.
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