Cayman ISLANDS Law and Practice Contributed by: Sam Dawson, Peter Sherwood and Denis Olarou, Carey Olsen
6.6 Third Parties and Injunctive Relief A freezing order may be effective against third parties, depending on its terms. For example, an “extended definition” freezing order, which encompasses the respondent’s assets held on its behalf by third parties. Moreover, third parties who knowingly assist the respondent in violating the freezing injunction will be in breach of the freezing injunction. 6.7 Consequences of a Respondent’s Non-compliance A respondent who breaches a freezing injunction is at risk of being found in contempt of court. This can have a variety of consequences that are prejudicial to the respondent, including, in the most serious cases, committal of a natural person to prison. Trials are adversarial in nature. The role of the judge is to adjudicate on the parties’ compet- ing factual and legal cases, rather than to con- duct an inquisitorial procedure on the judge’s own account. This is not to say, however, that the judge is restricted to the role of a passive observer (see 7.7 Level of Intervention by a Judge ). Trials are conducted orally, with each side pre- senting oral arguments and cross-examining witnesses live in front of the presiding judge. It is usual to have opening and closing oral sub- missions summarising the case. 7. Trials and Hearings 7.1 Trial Proceedings However, trials are preceded by the submissions of extensive written pleadings, witness state- ments, and expert reports, upon which subse-
Whenever injunctive relief is granted ex parte the applicant is under the strict duty of full and frank disclosure to the court. This is an obligation to disclose to the court fully and fairly all matters, whether factual or legal, that are material to the applicant’s position (including adverse matters). Failure to give full and frank disclosure at the ex parte hearing may lead to the injunction being discharged inter partes regardless of the sub- stantive merits. 6.4 Liability for Damages for the Applicant It is a condition of obtaining a freezing injunction that the applicant must undertake to compen- sate any losses suffered by the respondent if it is later ruled that the injunction should not have been made. In certain circumstances, the court may order for this undertaking to be fortified by the applicant providing security. In any event, the applicant should expect to have to disclose to the court information relevant to its ability to honour the undertaking in damages. 6.5 Respondent’s Worldwide Assets and Injunctive Relief Injunctive relief is available against the assets of the respondent both in the Cayman Islands and worldwide. A worldwide freezing order may be granted where the value of respondent’s assets in the Cayman Islands is unlikely to meet the value of the applicant’s claim. However, the court will often require the applicant to come back to obtain permission before enforcing the freezing order in a foreign jurisdiction.
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