1. What legislation applies to arbitration in your country? Are there any mandatory laws?
The principal arbitration related legislation in the Cayman Islands is the Arbitration Law 2012 (the "Arbitration Law") and the Foreign Arbitral Awards Enforcement Law (1997 Revision) (the "Foreign Awards Law").
The Arbitration Law is based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended in 2006) and the English Arbitration Act 1996. It applies where the seat of the arbitration is the Cayman Islands (Section 3(1) of the Arbitration Law).
The Foreign Awards Law adopts the provisions of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the "New York Convention") into Cayman Islands law.
2. Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?
Yes. There are no reservations to the general obligations of the New York Convention.
3. What other arbitration-related treaties and conventions is your country a party to?
Pursuant to the Arbitration (International Investment Disputes) Act 1966 (Application To Colonies Etc.) Order 1967, the United Kingdom extended certain provisions of the Arbitration (International Investment Disputes) Act 1966 to the Cayman Islands.
For practical purposes however, the effect of this extension has been largely (if not entirely) been superseded by the Arbitration Law and the Foreign Awards Law.
4. Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two?
Yes, see response to question 1 above. There are no significant differences.
5. Are there any impending plans to reform the arbitration laws in your country?
Not at present.
6. What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?
There is no arbitral institution in the Cayman Islands at present. However, the Cayman International Arbitration Centre ("CIAC") is planning to open in the Cayman Islands in 2021. In addition to providing modern hearing facilities, the CIAC intends to introduce an official set of institutional rules and arbitration clauses, which are currently in draft form
7. Is there a specialist arbitration court in your country?
No. However, whilst there is no dedicated court, applications pursuant to the Arbitration Law and the Foreign Awards Law are made to the Financial Services Division of the Grand Court of the Cayman Islands (the "Grand Court"), a division of the Grand Court staffed by specialist judges dealing with commercial cases.
8. What are the validity requirements for an arbitration agreement under the laws of your country?
For an arbitration agreement to be valid it must be in writing and contained in either a document signed by the parties or by means of communication that provide a record of the agreement (Section 4(3) of the Arbitration Law).
An arbitration agreement will also be deemed effective if a party asserts its existence in a pleading, statement of case or any other document which calls for a reply and the assertion is not denied (Section 4(4) of the Arbitration Law).
9. Are arbitration clauses considered separable from the main contract?
Yes. Section 4(5) of the Arbitration Law states that an arbitration agreement which forms, or was intended to form part of, an agreement shall be treated as a distinct agreement. This is also reflected in Section 27(2) of the Arbitration Law.
10. Do the courts of your country apply a validation principle under which an arbitration agreement should be considered valid and enforceable if it would be so considered under at least one of the national laws potentially applicable to it?
No, although the Grand Court may set aside an award in circumstances where the arbitration agreement is not valid under the law to which the parties have subjected it.
11. Is there anything particular to note in your jurisdiction with regard to multi-party or multi-contract arbitration?
12. In what instances can third parties or non-signatories be bound by an arbitration agreement? Are there any recent court decisions on these issues?
Tribunals are not generally permitted under Cayman Islands law to assume jurisdiction over individuals or entities that are not parties to the arbitration agreement.
In Unilever plc v ABC International [2008 CILR 87], the Grand Court granted an anti-suit injunction restraining the defendant from initiating arbitration proceedings against various companies which had previously owned a party to an arbitration agreement with the defendant, but were no longer the owners.
However, pursuant to Sections 4 and 11 of the Contracts (Rights of Third Parties) Law, 2014 a third party may, in their own right, enforce a term of an arbitration agreement if the agreement is executed after 21 May 2014 and expressly provides that they are entitled to do so.
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.