CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow and Jae Shin, Appleby
• the foreign court was not competent to pronounce the judgment, because it lacked jurisdiction over the person against whom it was pronounced; • the foreign judgment was obtained in proceedings contrary to natural justice or where the defendant’s rights were grossly violated; • the foreign judgment is of a type that cannot be enforced in the Cayman Islands (eg, a tax or other similar charge or a fine or other penalty); or • it would be contrary to public policy to recognise or enforce the foreign judgment – for example, where the foreign law is repugnant to Cayman Islands law. Once service is effected, the defendant is required to file an acknowledgement of service and a defence within the prescribed time limits. In enforcement cases, the defence will generally be limited to the defences set out above. In the absence of filing such an acknowledgement of service or defence, the claim - ant may apply for default judgment. If the defendant does file a defence, the claimant may nevertheless apply for summary judgment on the grounds that the defence raised is spurious and that there is no real triable defence to the action. It would be very unu - sual for the matter to go to full trial in the absence of exceptional circumstances, as the merits of the under - lying case will generally not be re-examined by the Cayman Islands court. 6. Privileges 6.1 Invoking the Privilege Against Self- Incrimination Privilege against self-incrimination is a statutory right in the Cayman Islands (Section 55 of the Evidence Act) where answering a question or producing a docu - ment would tend to expose that person to a criminal offence. Thus, a defendant to a civil fraud claim may invoke the privilege against self-incrimination but only to that extent. Exposure to civil liability would not give rise to that right. 6.2 Undermining the Privilege Over Communications Exempt From Discovery Legal professional privilege in the Cayman Islands comprises two types of privilege:
• legal advice privilege – covering confidential com - munications between lawyers and clients for the purpose of giving or receiving legal advice; and • litigation privilege – covering communications cre - ated for the dominant purpose of litigation. Both of these are subject to the “fraud exception” or “iniquity exception”, which prevents their application where communications are made in furtherance of fraud or other criminal purposes. Practically, challenging privilege on fraud grounds typically involves an application for disclosure, with the court often conducting an in camera review of documents to determine if the exception applies. The threshold is high, requiring more than mere allega - tions, but once established, all related communica - tions lose protection. 7. Special Rules and Laws 7.1 Rules for Claiming Punitive or Exemplary Damages Damages in Cayman Islands law are compensatory – namely, to compensate the claimant for the losses they have suffered, rather than to punish the defend - ant. Punitive or exemplary damages will be “sparingly granted”, but may be available, for example, to confis - cate profit where a party has deliberately committed a tort with guilty knowledge such that it would pay them to take a risk of the consequences ( Origami Partners III LLP v Pursuit Capital Partners (Cayman) Ltd [2021] 2 CILR 191). 7.2 Laws to Protect “Banking Secrecy” The Cayman Islands maintains a robust but evolving framework of financial confidentiality laws, balancing privacy protection with transparency requirements for legitimate investigations. The primary legislation gov - erning banking secrecy is the Confidential Information Disclosure Act 2016 (CIDA). Under the CIDA, the disclosure of confidential infor - mation without consent is prohibited, with criminal penalties for violations. However, the CIDA contains significant exceptions that facilitate evidence gather - ing in fraud claims, including that the court may order
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