Cayman Islands: Cayman Law Amended To Facilitate The Grant Of Interim Relief In Aid Of Foreign Proceedings

Last Updated: 5 November 2014
Article by David Butler

In modern litigation there is often a strong possibility that obtaining interim relief from the court of the jurisdiction in which you are suing your opponent will not fully protect you against the dissipation by him of assets which you either claim are yours or will in due course seek to realise to satisfy your judgment. The defendant may, for example, have sought to put assets beyond reach by moving them overseas, often into trusts or corporate structures in one of the International Financial Centres.

As every good litigator will know, in the common law world service of process on the defendant is the means by which jurisdiction is established over that defendant. The service requirement presents a problem when the defendant in litigation in an onshore jurisdiction has put his assets offshore in a country in which he is not resident. The traditional rule holds that if you cannot sue the defendant in the offshore jurisdiction then you cannot get any interim relief against him there, either.

In response to the increasing internationalisation of commercial fraud, and concerned that their jurisdictions would gain a reputation for being a place where fraudsters could safely hide assets, the courts of a number of jurisdictions – including Jersey, the Isle of Man, and the BVI – either ignored, departed from or circumvented the traditional rules concerning service and jurisdiction so as to be able to grant interim relief to claimants in support of the onshore litigation. As this judicial activism ran contrary to established principle in the common law world, the legislatures of many of those International Financial Centres have now put the rules on a statutory footing to avoid the judicial development being overruled.

In contrast to the judicial activism seen in the Channel Islands, Isle of Man and other Caribbean jurisdictions, the courts in the Cayman Islands have adhered to the conventional approach. One reason for this was that Cayman’s civil procedure rules made provision for the service of process out of the jurisdiction but expressly prohibited the Cayman courts from granting permission to serve a defendant out of the jurisdiction with proceedings where the only relief sought by the claimant was an interim injunction. The Cayman court has thus felt constrained to follow the policy that its legislature set many years previously and has refused to allow foreign claimants to obtain interim relief against overseas defendants unless it was part and parcel of substantive proceedings being litigated here.

A series of recent cases had limited the practical barriers to freezing assets held by Cayman entities on behalf of wrongdoers, but adherence to the conventional view has the potential to produce some anomalous results. If the defendant has put assets into a Cayman Islands company, it may be possible to obtain interim relief against that company because it is domiciled in the Cayman Islands. There is no need for the claimant to show that it has a substantive cause of action against the company, provided the claimant can show that the assets which the company holds are held beneficially for the defendant and that, by some process of enforcement, the assets can be realised by the claimant to satisfy any judgment which it might obtain. Conversely, however, if the defendant owns land or moveable property in his own name in the Cayman Islands, the claimant cannot obtain interim relief in respect of the land. The availability of the relief against the company has perhaps become more important in light of the recent decision of the English Court of Appeal which reminds litigants that a company is a separate legal person and its assets belong to it, not to its sole shareholder (see Lakatamia Shipping Company v Nobu Su [2014] EWCA Civ 636) such that freezing orders made against a defendant do not apply directly to the assets of a company in which the defendant is the sole shareholder.

New legislation came into force on 20 October 2014 in the Cayman Islands facilitating the granting in the Cayman Islands of interim relief in aid of foreign proceedings. That legislation – the Grand Court (Amendment) Law (Amendment Law) – is in very similar terms to amendments made to Hong Kong’s High Court Ordinance.

By the Amendment Law a new Section 11A is inserted into the Grand Court Law of the Cayman Islands. The new section 11A gives the Grand Court the power to make an order appointing a receiver or orders for any other interim relief which it would have the power to grant in proceedings within its jurisdiction in respect of proceedings which have or are to be commenced in an overseas court which are capable of giving rise to a judgment which may be enforced in the Cayman Islands under any Law or at common law. By section 11A(4) the Grand Court is given the power to make such orders for interim relief even if the cause of action which is being litigated in the foreign proceedings is not a cause of action which could be litigated in the Cayman Islands. It is also expressly provided in section 11A(4) that the order does not need to be ancillary or incidental to any proceedings in the Cayman Islands.

By the new section 11A(5) the Court is entitled to refuse an application for interim relief if in its opinion it would be unjust or inconvenient to make an order. And by section 11A(6) the Court is required to have regard to the fact that the power is ancillary to proceedings that have been or are to be commenced in a place outside the Islands and that the purpose of the power is to facilitate the process of the foreign court that has primary jurisdiction over the dispute.

The enactment of the Amendment Law is a helpful development. It will enhance the reputation of the Cayman Islands as a jurisdiction committed to judicial cooperation in international fraud cases by making it possible for foreign claimants to obtain interim relief in Cayman in aid of their foreign proceedings.

For practitioners the important questions are likely to be what the claimant needs to do to satisfy the Cayman court that it should make an order and the circumstances in which the court will decline to make an order. As to the first, the claimant will obviously need to show that it falls within the conditions specified in section 11A(1), namely that there are proceedings which are or are to be commenced in a court overseas which are capable of giving rise to an judgment enforceable in Cayman.

The term “a judgment which may be enforced in the Islands” in section 11A(1)(b) raises an interesting point. A proceeding in a foreign jurisdiction which imposes a penalty under that country’s criminal law or seeks the payment of tax will not be enforceable in the Cayman Islands at common law so there is little prospect of any orders in aid being obtained in respect of such proceedings. The issue which raises the most potential for difficult issues to arise is whether a claim in the foreign court which seeks a proprietary remedy or an order for specific performance – for example the transfer of property other than money said to have been stolen – is a judgment which “may be enforced” in the Cayman Islands. Judgments which order specific performance and which are sought to be enforced in another jurisdiction are strictly speaking the subject of proceedings for recognition in that other jurisdiction, not proceedings for their enforcement. There are some decisions of the Cayman court which hold that it is possible to “enforce” a judgment or order for specific performance, but that is a departure from the conventional wisdom which holds that only a judgment for a sum of money which is ascertained or ascertainable may be “enforced” at common law and there are conflicting first instance decisions on the point. It may be that the Cayman court will adopt a purposive, rather than a literal interpretation of the provision so as to permit orders in aid of proprietary claims, and in many cases the difficulty may be avoided by seeking monetary damages in the alternative in the action in the primary jurisdiction.

The claimant will also need to demonstrate to the court that it is not unjust or inconvenient to make the order sought. That effectively means the Cayman court will need to be satisfied at a minimum that the claimant would be granted the order if the application had been made in domestic proceedings in the Cayman Islands. So in the case of an application for a freezing order, the court would need to be satisfied that the claimant has a good arguable case against the defendant and that there is solid evidence of a real risk that the judgment will remain unsatisfied if no order is made. In a case where the underlying cause of action in the primary proceedings is not one that has a readily identifiable counterpart or analogue in the Cayman Islands, it may be necessary to obtain expert evidence on the laws of the primary jurisdiction to establish to the satisfaction of the Cayman court that the action which has been brought in the primary jurisdiction is justiciable there.

The Court will also need to be satisfied that considerations of justice and convenience favour the grant of the interim relief. This is reflected in section 11A(5), which provides that the court may refuse the relief if it considers it unjust or inconvenient to grant the application.

The Cayman court will not be without guidance as to what considerations of justice and convenience entail when considering an application for interim relief in aid of foreign proceedings. As has already been noted, many countries have for many years had rules permitting the grant of interim relief in aid of foreign proceedings and this question has already been the subject of consideration in those courts. Factors which the Cayman court is likely to take into account include:

(a)          Whether there are assets in the Cayman Islands which are sought to be frozen or whether any other relief sought would have the greatest effect if made by the Cayman court.
(b)          Whether the Cayman court can enforce the order effectively once it has been made.
(c)           In cases involving an application for a freezing order without notice to other parties, whether the Cayman court can be satisfied that all of the relevant material has been put before it by the applicant. In this regard, the Cayman court has been astute to ensure that full disclosure of all facts and matters which may be relevant to its decision or to the respondents’ objection to the order are disclosed. In VTB Capital plc v Malofeev the Cayman court ordered the plaintiff to disclose to a third party against whom a freezing order had been made all of the evidence which had been produced to the primary court in the main proceedings as the third party was not a party to those main proceedings.
(d)          Whether the order is necessary or will lead to duplication of relief or additional cost. If the primary court has made a worldwide freezing order, for example, it may not be necessary for an ancillary order to be made in Cayman. Equally, orders for disclosure of assets (often made as standard as part of the freezing order) may not be necessary in an order made in Cayman where the order made in the primary jurisdiction requires disclosure of assets wherever they are situated. In addition, it may not be necessary for the Cayman court to make a freezing order if sufficient assets to satisfy any judgment have been frozen in the primary jurisdiction or in the primary jurisdiction and another jurisdiction in which an ancillary order has been obtained.
(e)          Whether the applicant has failed to make, or the primary court has refused, an application for relief which is sought in the Cayman court.

The final substantive point of note is that the Amendment Law also brings about a subtle but important change in respect of the availability of interim relief against third parties who are resident within the Cayman Islands and who, it is alleged, hold assets beneficially on behalf of the defendant against whom the substantive claim is being prosecuted in the primary jurisdiction. Before the Amendment Law came into force, the position was that the third party within the jurisdiction of the Cayman court could be made the subject of a freezing order only if it could be shown (among other things) that the cause of action brought against the defendant in the primary jurisdiction was justiciable in the Cayman Islands. That was the position arrived at by the Cayman Islands Court of Appeal in VTB Capital plc v Malofeev [2013] (2) CILR 94. Sections 11A(1) and (4) of the Amendment Law have, however, removed that limitation such that interim relief is available in relation to foreign proceedings without the need to show that the foreign cause of action is justiciable in the Cayman Islands.

While the Amendment Law is now in force, the changes which it is necessary to make to the Grand Court Rules to provide for service out of the jurisdiction of this new form of relief have not yet been implemented. It is to be hoped that those changes are implemented swiftly, and that the absence of the necessary amendments to the rules of court does not impede the availability of this relief in the interim.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.