Cayman Islands: Jurisdiction To Grant Interim Relief In Aid Of Foreign Proceedings

In our December 2014 update article "Amendments to the Grand Court Law" we noted that the Grand Court Law (2008 Revision) (the "Law") had been amended by the Grand Court (Amendment) Law, 2014 (the "Amendment Law") to provide a clear statutory basis for the Grand Court to grant interim relief in the Cayman Islands (including by way of a freezing order) in support of substantive proceedings in other jurisdictions – so-called "free-standing" interim relief. 

Until now such free-standing interim relief was only available when the defendant was located in the Cayman Islands.  So, even if the defendant had assets in the Cayman Islands, it was not possible to obtain an interim injunction if that defendant was outside the jurisdiction.  That was because, under the Cayman Islands Grand Court Rules (the "GCR"), the plaintiff must first show that its claim fell within certain prescribed types of claim (as set out in GCR O.11 r.1).  Seeking interim relief in support of a foreign proceeding was not one of those types of claim.¹ 

That has now been changed.  New GCR Order 11, rule 1(n) allows for the service out of the jurisdiction of any action, with leave of the Court, where "the claim is brought for any relief or remedy pursuant to section 11A of the Grand Court Law (2008 Revision) (as amended by the Grand Court (Amendment) Law, 2014)".  

Accordingly, pursuant to section 11A of the Amendment Law and GCR Order 11, rule 1(n) the Grand Court has the jurisdiction to make an interlocutory injunction against a defendant, appoint a receiver or grant any other interim relief in relation to proceedings which (i) have been or are to be commenced in a court outside of the Cayman Islands; and (ii) are capable of giving rise to a judgment which may be enforced in the Cayman Islands under any Cayman Islands statute or at common law. 

The Amendment Law has expressly extended the Grand Court's jurisdiction to permit orders for interim relief even if the cause of action being litigated in the foreign proceedings is not a cause of action which is known to Cayman Islands law or could be pursued in the Cayman Islands.  That reverses a limitation imposed by the Cayman Islands courts prior to these amendments, to the effect that the substantive claim (wherever brought or pursued) must be founded on a cause of action recognised by the Cayman Islands court.²  However, the Grand Court must still, of course, be satisfied that such interim orders would be appropriate in the circumstances and that the foreign court has primary jurisdiction over those proceedings.  

By making it possible for claimants in foreign proceedings to obtain free-standing interim relief in the Cayman Islands against foreign defendants, these amendments have expanded and clarified the Grand Court's ability to provide effective judicial assistance and cooperation in cross-border disputes.

¹  See VTB Capital v Malofeev [2011] 2 CILR 420 (Court of Appeal).

²  See VTB Capital v Universal Telecom Investment Strategies Fund SPC [2013] 2 CILR 94.

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