ARTICLE
10 April 2024

Enforcement Of Foreign Arbitral Award In The Cayman Islands: A Recent Review

The recent decision of Kawaley J of In the Matter of s.5 of the Foreign Arbitral Awards Enforcement Act (the Judgment) serves as both a practical guide to the regime...
Cayman Islands Litigation, Mediation & Arbitration
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The recent decision of Kawaley J of In the Matter of s.5 of the Foreign Arbitral Awards Enforcement Act (the Judgment) serves as both a practical guide to the regime for obtaining leave to enforce foreign arbitral awards and also as a reminder that the Cayman Islands is readily accessible as a jurisdiction for those looking to do so.

More specifically, the Judgment concerns an application for leave to enforce a Final Award of the Swiss Chambers' Arbitration Institution made under the Foreign Arbitral Awards Enforcement Act (1997 Revision) (the FAAEA). The FAAEA permits recognition in the Cayman Islands of arbitral awards issued pursuant to an arbitration agreement made in a state that is a party to the New York Convention (Arbitral awards issued pursuant to an arbitration agreement made in a state that is not a party to the New York Convention are enforceable in the Cayman Islands under the Arbitration Act (Act 3 of 2012)).

In the Judgment, Justice Kawaley notes the procedural steps to enforce an arbitral award under the FAAEA require the applicant to produce the arbitral award and the arbitration agreement (originals or duly certified copies). Where either document is in a foreign language, a certified translation must also be adduced. The Grand Court Rules also require that leave applications of this nature must be made ex parte. The policy principles underpinning the rationale for mandating this approach were observed by Kawaley J in his earlier decision of Lam Global Management, cited in the Judgment, being that “The pro-enforcement policy of the New York Convention is well recognised by this Court and understood” and that “The grounds for refusing enforcement are limited, should be construed narrowly and the respondent will bear the burden at any inter partes hearing of demonstrating that such grounds are made out”.

As the application must be made ex parte, the common law requirements of fair presentation and to give full and frank disclosure are superimposed over the statutory requirements detailed above. However, Kawaley J observes that the duty will be easier to discharge in this context as once a prima facie case for granting leave is made out, there is effectively a presumption in favour of enforcement. Further, only eligible grounds which are obviously strong at the stage leave is sought are likely to undermine the merits of the application. As set out by His Lordship at paragraph 10, in most cases the duty of full and frank disclosure will be discharged by informing the Court:

  1. whether any application has been made to the curial court or any other competent court, to set aside the award (and, if so, the result or other status of the proceedings); and
  2. what grounds for refusal, if any, have been or could be raised by the respondent.

On the facts in this case as presented, Kawaley J granted the Applicant leave to enforce the Final Award. The Judgment underscores the Grand Court's experience of and receptive approach to applications for leave to enforce foreign arbitral awards in the Cayman Islands where the relevant requirements are met.

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.

ARTICLE
10 April 2024

Enforcement Of Foreign Arbitral Award In The Cayman Islands: A Recent Review

Cayman Islands Litigation, Mediation & Arbitration

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