Cayman Islands: The How And W5 Of Jurisdiction Clauses

Last Updated: 14 December 2006
Article by Wanda O'Connor

Why Have it?

In today’s global economy, a company’s particular jurisdiction is without doubt of great importance to the daily workings and management of most companies whether they are domestic or abroad and whether its clientele is local, international or in most cases a combination of both. It follows that when companies enter into legally binding agreements, locally or abroad, jurisdiction clauses will play an important role in most commercially drafted agreements.

Unfortunately, for the most part, the first time these clauses receive any great scrutiny is when they receive their deserved attention from the litigator, at which point it is often too late and after the damage has been done when a dispute has already erupted between the parties. But this does not have to be the case. If the jurisdiction clause is given some careful consideration at the outset then in the event of a dispute the parties can have more control and some degree of certainty of how matters will be resolved.

Certainly the absence of a jurisdiction clause or one that is inappropriate can have a significant impact on how the dispute will be determined. It is all too common a scenario where a party is under the misapprehension that its country’s laws will automatically apply should a dispute arise. However, unless there is a clause in the contract that is crystal clear on this very point it may be that an unfamiliar system of law may be applied to oversee any dispute that arises and ultimately hear the case with unforeseen results and remedies. Alternatively, as is often the case, without a provision in the contract on jurisdiction should a dispute arise a jurisdictional battle may ensue causing significant delay and causing considerable costs to mount up which can quickly chip away at a company’s ready financial resources.

Gone are the days that jurisdiction clauses can be considered remote and irrelevant; nothing more than a boilerplate clause put in the contract as an all sweeping afterthought. Jurisdiction clauses must be planned ahead and considered so that a party is not caught off guard in the event of a dispute. In order to avoid such surprises careful consideration needs to be given to jurisdiction clauses at the initial drafting stage.

What is it?

A jurisdiction clause determines which country’s courts will determine a dispute. It is frequently the case that more than one court may regard itself as entitled to assert jurisdiction over a dispute.

The effect of a particular country’s court determining a dispute is that it will determine which procedural law or code will govern the proceedings. If, for example, jurisdiction is given to the Cayman Islands, then proceedings will be governed by The Grand Court Rules, or if say in the English Courts, then the Civil Procedure Rules.

A common mistake is to mix the governing law clauses with jurisdiction clauses. Whilst jurisdiction clauses determine which country’s court will hear a dispute and therefore the relevant procedural rules, the governing law clause in an agreement will determine which country’s substantive law applies.

Who? Qui? Quien?

If the jurisdiction is a foreign court, then proceedings will be conducted and heard in the local language. Thus litigation in a foreign language may require the use of an interpreter and certified legal translator of legal documents for which such services can be very expensive. It does also run the risk of mis-communication between parties and /or lawyers and their clients which creates increased risks in litigation and may also serve to increase costs overall.

It is worth noting the contracting parties’ state or locality. If the jurisdiction in the contracting parties’ state or country is known to be slow in its judicial process it may be worth considering, if the option is available, contracting with another subsidiary company or indeed the parent company if the same is located in another jurisdiction that is more familiar and/or considered to have a more efficient judicial process.

Where’s the Money!

It is important to consider what assets, if any, the contracting party has in the jurisdiction that you have elected to resolve any disputes under the jurisdiction clause. If assets are located outside of the jurisdiction consideration should be given as to the procedural hoops of having a foreign judgment enforced. There are various treaties, conventions and reciprocal agreements between countries that allow enforcement of foreign judgments without having to commence proceedings in those countries. However, countries that are not members or signatories to these various treaties/agreements may require a party to commence new enforcement proceedings, or some countries may refuse to recognize or enforce a foreign judgment at all.

It is also important to consider what other remedies are available such as injunctions in order to preserve/freeze assets, what damages for breach of contract may be awarded, recovery of legal costs, and specific performance as these remedies may not be available in certain jurisdictions and this may prove problematic and detrimental to a case if such a remedy is an integral part to the successful outcome of a dispute.

How Will the Game be Played?

Procedural rules of chosen jurisdiction may very well help or hinder your case should a dispute arise. For example, proceedings in countries in courts that operate under a codified legal system, normal procedural requirements such as full disclosure and cross examination of witnesses may not be available whereas in commonwealth jurisdictions where CPR or equivalent rules apply where, for example, full disclosure must be made, whether it is of assistance or detrimental to your case.

When Will Matters be Resolved?

It is worth considering the length of time that it will take to obtain a judgment in a case and whether there is procedure for appeal. In some countries it can take years from the time a claim is issued to the time of judgment and then the subsequent appeals process depending on whether or not there are grounds of appeal. In other jurisdictions, a party can appeal as of right, irrespective of the merits of its case.


In light of the complex rules used to determine the relevant jurisdiction, it is without doubt wiser to seek to agree contractually as to which jurisdiction applies and also which law will govern the agreement. If parties agree to submit to a particular jurisdiction, then in most cases, the courts will not interfere. A simple jurisdiction clause to the effect that a contract will be governed by and construed in accordance with the laws of Cayman Island, UK, Canada, or wherever and that the parties agree to submit to the exclusive jurisdiction of the courts of these countries will probably suffice while at the same time providing peace of mind to the parties to the contract that should there be a disagreement or litigation over the contract it will be resolved in a jurisdiction with which the contracting party is familiar with the who, the what, the where, the why, the how and when.

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”

Related Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions