CAYMAN ISLANDS Trends and Developments Contributed by: Matthew Dors, Natascha Steiner-Smith, Annalisa Shibli and Kirsten Bailey, Collas Crill
As for the Full and Frank Disclosure Point, the defend - ants asserted (which was not denied by the plaintiff) that the plaintiff failed to tell the Grand Court at the ex parte stage that: • the defendants had applied to set aside the Hong Kong Court’s ex parte order granting leave to enforce the final award in Hong Kong; • there were separate arbitration proceedings between the parties which were ongoing and could give rise to a complete or partial defence, set-off or counterclaim by the defendants against the plain - tiff; and • the plaintiff would be applying to be substituted as petitioner in Hong Kong winding-up proceedings brought against one of the defendants. The Grand Court held that none of these facts needed to be disclosed because they had no relevance to the enforcement of the final award (which may only be refused in the circumstances prescribed by the Enforcement Act). The points raised in relation to the Irregularities in the Ex Parte Order amounted to a misstatement of the interest claimed by the plaintiff, which the Grand Court held should be remedied by way of amendment, on the basis that it caused no prejudice to the defendants. The stay application was also given short shrift by the Grand Court, which described the application as “a thinly veiled form of refusing to enforce an unim - peached foreign award on grounds which contravene the express terms of [the Enforcement Act]”. The defendants’ set-aside application was therefore dis - missed in its entirety and the ex parte order upheld. White Crystals Ltd v IGCF General Partner Limited (Unreported, 2 April 2024) In this case, the plaintiff applied to enforce an arbitral award issued by the London Court of International Arbitration against IGCF General Partner Limited, the general partner of a Cayman Islands registered fund. The issue in the arbitration was the entitlement of the plaintiff as a limited partner of the fund to access the books and records of the partnership through its contractual entitlement under the Limited Partnership
Deed, as well as under Sections 22, 29, 30 and 31 of the Exempted Limited Partnership Act. In January 2024, the Grand Court granted the plain - tiffs’ application to enforce the arbitral award on the papers. The general partner opposed the application and sought an order: • to discharge or vary the enforcement order on the grounds of public policy; and/or • for an injunction restraining the plaintiff from using the books and records once obtained, on confiden - tiality grounds. The Grand Court rejected the general partner’s appli - cation on the basis that “…this court does not have jurisdiction to add a rider or addendum to an award… the court’s jurisdiction is limited to enforcing an award or refusing to enforce it where any of the grounds in Section 7 of the [Enforcement Act] is established”. On the contrary, the Chief Justice who heard the case determined that public policy required the court to enforce the arbitral award on its terms. Costs in contested applications As noted previously, parties ought to be mindful of their exposure as to costs when challenging ex parte orders to enforce arbitral awards. This point was dem - onstrated in the scathing judgment in In the matter of Sharq Insurance LLC (Unreported, 16 June 2023), in which the Grand Court not only dismissed an appli - cation by the defendant to set aside an enforcement order but penalised the defendant for its conduct by imposing indemnity costs (the standard order as to costs is that the winning party is entitled to recover costs that were reasonably incurred; by contrast, an indemnity costs order allows the winning party to recover a higher level of costs such that only costs that are unreasonably incurred are disallowed). Indem - nity costs orders are used by the court to show its disapproval of the losing party’s conduct. The defendant had applied to set aside the enforce - ment order but was unclear as to its grounds. In its skeleton argument ahead of the oral hearing, the defendant relied on seven grounds for the enforcement order to be dismissed. The Grand Court noted that the “defendant was desperately trying to invent any argu -
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