The Arbitration Law, 2012 ("the Law") has now been
passed in the Cayman Islands and will come into force on a date to
be appointed by the Governor in Cabinet.
On a global basis, arbitration has been increasingly recognised
as an important alternative to Court proceedings in order to
resolve commercial disputes. This is because many parties to
commercial contracts prefer being able to conduct legal disputes
without the publicity and formality associated with a courtroom.
The arbitration procedure is more flexible and normally entails
meaningful cost savings when compared with Court proceedings.
In the offshore market, purchasers of financial services and
products have increasing regard to the quality of dispute
resolution mechanisms in choosing between competing
The Cayman Islands will now be able to foster an arbitration
regime which implements modern international arbitration practices.
The Law provides an unitary regime of arbitration based on the
UNCITRAL Model Law on International Commercial Arbitration with
some additional provisions to suit local conditions and other
refinements taken from legislation that has been a success in
comparable jurisdictions which have adopted the Model Law
(including the Bahamas, Singapore and Hong Kong).
The Law is expressly founded on 3 fundamental principles: 1) a
fair resolution of disputes by an impartial tribunal without undue
delay or expense; 2) maximum party autonomy, subject only to
safeguards in the public interest; and 3) limited judicial
intervention. For international commercial enterprises which are
already attracted to using the Cayman Islands because of the
quality of its dispute resolution services, these features are very
likely to increase the choice of Cayman as the seat to conduct
It must be recognised that further steps will be required in
order to fully develop the Cayman Islands as an effective seat of
arbitration. These include public education and training for
practitioners, the establishment of an arbitration centre, and the
alignment of administrative policies and procedures to support
implementation of the Law. We will alert you to such developments
as they occur.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The claim followed the conclusion of two years of litigation (ORD 12/0035 & ORD 12/0034) between the parties in respect of the Bank's contractual claim for amounts owed by TSEL to the Bank pursuant to certain business loans.
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