1 Legal and judicial framework
1.1 Which legislative and regulatory provisions govern the recognition and enforcement of foreign judgments in your jurisdiction?
Judgments from foreign countries are recognisable and enforceable in the Cayman Islands pursuant to the common law and, in a limited number of cases, pursuant to the Foreign Judgments Reciprocal Enforcement Law (1996 Revision).
Foreign arbitration awards may be enforced under the Foreign Arbitral Awards Enforcement Law (1997 Revision) (for further details please see here).
1.2 Which bilateral and multilateral instruments on the recognition and enforcement of foreign judgments have effect in your jurisdiction?
The Cayman Islands has not, of its own accord, entered into any international treaties for the reciprocal recognition or enforcement of foreign judgments (save in relation to Australia).
The United Kingdom has extended to the Cayman Islands its ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (for further details please see here).
In the next 12 months, the United Kingdom may sign up to the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019. If it does so, it is reasonably likely that the convention will be extended to the Cayman Islands.
1.3 Which courts have jurisdiction to hear applications for the recognition and enforcement of foreign judgments?
Applications for the recognition and enforcement of foreign judgments (whether enforcement is sought at common law or under the Reciprocal Enforcement Law) are heard by the Financial Services Division (FSD) of the Grand Court. The FSD has similar powers to the High Court of England & Wales.
2 Requirements for enforceability
2.1 What types of judgments may be recognised and enforced in your jurisdiction? Are any types of judgments specifically precluded from enforcement?
Are any types of judgments specifically precluded from enforcement?
Money and certain non-money foreign judgments are enforceable in the Cayman Islands at common law, whereas only money judgments are enforceable under the Reciprocal Enforcement Law.
Money judgments are enforceable both at common law and under the Reciprocal Enforcement Law. At common law, money judgments may be enforced if they satisfy the following conditions:
- The judgment is in personam rather than in rem (unless the subject matter of the foreign proceeding was property situated in that foreign country);
- The foreign court had jurisdiction over the party against which the plaintiff is attempting to enforce the judgment (see question 5.2);
- The judgment is not impeachable under the relevant common law rules (see question 4);
- The judgment is final and conclusive (see question 2.2); and
- Proceedings are brought within six years of the date of the judgment (see question 2.4).
Under the Reciprocal Enforcement Law, money judgments can be enforced if they satisfy the following conditions:
- The judgment debtor was properly served (in accordance with the law of the foreign country);
- The judgment originates from one of the jurisdictions to which the Reciprocal Enforcement Law applies (currently only Australia and its territories);
- The foreign judgment is final and conclusive;
- Registration is sought within six years of the date of the judgment; and
- At the date of the application, the judgment has not already been wholly satisfied and is still capable of enforcement in the country of the foreign judgment.
The following judgments are enforceable at common law, but not under the Reciprocal Enforcement Law:
- Judgments ordering or prohibiting the doing of acts: Since the Cayman Islands decision in Bandone v Sol Properties (2008 CILR 301), the ability to enforce directly foreign judgments and orders made in personam is no longer confined to judgments for a debt or definite sum of money. Accordingly, a non-money judgment can be recognised and enforced by way of equitable remedies if the principle of comity requires it. Each case will necessitate the exercise of judicial discretion.
- Declaratory judgments: These are enforceable if they meet the relevant conditions outlined above.
- Judgments made without notice (ex parte): These are enforceable if they meet the relevant conditions outlined above.
- Foreign enforcement orders and (pre-judgment) attachment orders: These are enforceable if they meet the relevant conditions.
The following judgments cannot be enforced either at common law or under the Reciprocal Enforcement Law:
- foreign judgments adjudicating in rem on the title to, or the right to possession of, immovable property in the Cayman Islands (Tartaglia v Colonial Dev Corp Ltd [1996 CILR Note 4b]);
- foreign judgments purporting to declare that a Cayman Islands trust (or disposition in respect of a trust) is void or liable to be set aside, either because the foreign law does not recognise the trust concept or because of heirship, matrimonial or certain other rights that will not be enforced by the foreign court (Trusts Law 2020 Revision, Sections 91-93);
- foreign tax judgments;
- foreign decisions granting provisional measures. However, under Section 11A of the Grand Court Law, the court has jurisdiction to make interim orders (including injunctive orders and orders for the appointment of receivers) in support of foreign proceedings;
- foreign judgments which are repugnant to the Cayman Islands system of law on grounds of public policy; and
- foreign judgments that relate to the penal laws of another country or that impose punitive damages.
2.2 Must a foreign judgment be final and binding before it can be enforced?
Yes, the foreign judgment must be ‘final and conclusive' between the parties in the court that gave the judgment in order to be enforceable at common law or under the Reciprocal Enforcement Law.
A foreign judgment may be ‘final and conclusive' notwithstanding that it may be subject to an appeal in the foreign courts.
If the judgment is being appealed, however, the Cayman Islands court may decide to grant enforcement subject to conditions which will safeguard the interests of those that have the right to appeal. For example, the court may grant a stay of the execution in respect of its recognition and enforcement decision pending resolution of the foreign appeal.
2.3 Is a foreign judgment enforceable if it is subject to appeal in the foreign jurisdiction?
Under the common law rules, the fact that an appeal is pending in the foreign jurisdiction is not necessarily a bar to bringing an action to enforce the foreign judgment in the Cayman Islands.
Nevertheless, the Grand Court does have the power to stay the proceedings pending resolution of the appeals process in the foreign jurisdiction (Peterdy v Dennis (1998) CILR N-9).
Equally, under Section 7 of the Reciprocal Enforcement Law, if the debtor satisfies the court either that an appeal is pending or that it is entitled to and intends to appeal the judgment, the Grand Court may, "if it thinks fit, and on such terms as it may think just", adjourn the Cayman Islands registration process to enable the applicant to take the necessary steps to have the appeal disposed of.
2.4 What is the limitation period for making an application for recognition and enforcement?
A six-year limitation period applies for enforcement both at common law and under the Reciprocal Enforcement Law (Section 4). This begins to run from the date of the judgment or, where there have been appeals, the date of the last judgment delivered in those proceedings.
3 Recognition and enforcement process
3.1 Is recognition of a foreign judgment a separate process from enforcement and does it have separate legal effects?
Before a foreign judgment can be enforced in the Cayman Islands, it must first be recognised. This is a formal procedure involving an application to the Grand Court for either registration of the judgment or the issuance of new proceedings to obtain a domestic judgment.
Once these steps have been successfully completed, the foreign judgment will be recognised and can be enforced as if it were a local judgment (indeed, where the common law route is followed, there will be a Cayman Islands domestic judgment). The ways in which a domestic judgment may be enforced are discussed in question 7.1.
While it is self-evident that the court must have recognised a foreign judgment before it can enforce it, it does not necessarily follow that the court will enforce every foreign judgment which it has recognised.
For example, a party may seek mere recognition of a foreign judgment to prevent an opposing party from rearguing a point in Cayman Islands proceedings that has already been decided in foreign proceedings between the same parties.
Another example is where a foreign receiver seeks recognition of its appointment in the Cayman Islands. The Cayman Islands court frequently recognises such appointments (applying the ‘sufficient connection' test, which is beyond the scope of this Q&A), but the court will not accede to an application to enforce a receivership. The is because the ongoing supervisory jurisdiction of the foreign court (over the receiver) means that the order is not final and conclusive.
3.2 What is the formal process for recognition and enforcement?
As explained in question 3.1, recognition and enforcement are two separate processes.
As far as enforcement is concerned, at common law, the process is as follows:
- The creditor will commence a claim in the Cayman Islands Grand Court by issuing a writ and statement of claim (seeking payment of the foreign judgment debt) in accordance with the Grand Court Rules.
- The writ must be served on the judgment debtor in the ordinary way. There are additional requirements if the judgment debtor resides outside of the Cayman Islands (Masri v Consolidated Contractors International Company  1 CILR 79).
- If the debtor fails to acknowledge service of the claim or to file a defence within the specified timeframe, it may be possible for the creditor to obtain a default judgment pursuant to Order 13 of the Grand Court Rules.
- If the debtor does file an acknowledgment of service, it will usually be possible for the judgment creditor to apply for summary judgment under Order 14 of the Grand Court Rules, on the basis that the debtor has no real prospect of successfully defending the claim.
- Once the creditor has obtained a domestic judgment in its favour in respect of the foreign judgment debt, it will be able to enforce the judgment in the same way as any other local Cayman Islands judgment (see question 7.1).
For foreign judgments that fall within the scope of the Reciprocal Enforcement Law, the judgment creditor must apply to have the foreign judgment registered in accordance with Order 71 of the Grand Court Rules:
- The application is made ex parte by originating summons (unless the court directs the summons to be served on the judgment debtor).
- If the court is satisfied that the judgment meets the statutory criteria (see question 2), the judgment will be registered.
- The judgment debtor then has a limited timeframe within which to apply to set aside registration on specified grounds (see question 4 for further details).
- If the judgment debtor fails to apply to set aside, or its set-aside application fails, the registered judgment is treated as if it were a domestic judgment of the Grand Court and domestic enforcement methods are available (see question 7.1).
3.3 What documents are required in support of an application for recognition and enforcement?
The documents that are required in support of an application for recognition and enforcement are similar irrespective of whether the applicant applies under the common law or the Reciprocal Enforcement Law.
The writ (common law route) or ex parte summons (Reciprocal Enforcement Law) must be supported by affidavit evidence. The affidavit must:
- exhibit the foreign judgment (or a certified copy);
- state the name, trade or business, and last known address of both the judgment creditor and judgment debtor;
- assert that the judgment creditor is entitled to enforce the judgment; and
- confirm that the judgment remains unsatisfied.
A certified English translation of the judgment or other supporting documents is required if such documents are written in a foreign language.
For registration under the Reciprocal Enforcement Law, the judgment must be converted into local currency (Cayman Islands dollars), at the rate of exchange prevailing on the date the judgment was given by the foreign court. For enforcement at common law, the fresh proceedings can be expressed in a foreign currency, on the basis that conversion to local currency will take place either when the local judgment is entered or at the time of enforcement.
3.4 What fees are payable for recognition and enforcement?
Generally, fees will comprise:
- a court filing fee for commencing the proceedings in the Financial Services Division (US$6,100);
- legal fees for preparing the application and responding to any challenges;
- translation fees if the foreign judgment is not in the English language or if the originating process must be served in a jurisdiction where English is not the official language;
- the process server's fees; and
- legal and other professional fees for enforcing the judgment (see question 7.1).
These costs are likely to be recoverable as sums payable under the judgment, provided that they are reasonably incurred. The general principle is that the loser pays the winner's costs unless it appears to the Court that in the circumstances of the case some other order should be made.
3.5 Is the applicant required to provide security for costs?
A creditor is not required to give security for costs as a matter of course in enforcement proceedings. However, the court has the power to make such an order upon a defendant's application.
Full details of these rules are beyond the scope of this Q&A, but they can be found in Order 23 of the Grand Court Rules.
In general terms, the Grand Court may make an order for security for costs if it is satisfied, having regard to all circumstances of the case, that it is just to do so.
An example is where the court is satisfied that there is reason to believe that the applicant will be unable to pay the debtor's costs if it is later ordered to do so.
Security for costs is commonly given (typically by way of an undertaking in damages to the court) as a prerequisite for interim relief (see question 3.7).
3.6 How long does it usually take to obtain a declaration of enforceability?
Enforcement proceedings – whether by way of a fresh proceeding or by an application to register a foreign judgment – can take several months.
The duration will vary depending on the length of time required to effect service and, once service is effected, whether the judgment creditor mounts a challenge (and the nature and merits of any such challenge).
By way of example, at common law (which is the route most commonly taken), the procedure is as follows:
- Once the creditor has served the writ and particulars of claim, the debtor will normally have 14 days to file an acknowledgement of service and up to 28 days to file and serve a defence.
- If the debtor files an acknowledgement of service and admits the claim, the creditor can apply to the court for judgment.
- If the debtor fails to file an acknowledgement of service or defence within the specified timeframe, the creditor can apply to the court for a default judgment.
- If the debtor serves an acknowledgement of service indicating an intention to defend, it will usually be possible for the creditor to apply for summary judgment. Such an application will normally take several weeks, as both parties will need to serve evidence in relation to the application. The timing will also depend on the court's availability for hearing the application.
- If the creditor is unable to obtain summary judgment, the claim must proceed to trial (which will take several months).
3.7 Can the applicant seek injunctive relief while the process is ongoing?
While the recognition process is ongoing, the creditor may apply for injunctive relief.
Such relief might include a freezing injunction to prevent the judgment debtor from dissipating its assets or removing them from the jurisdiction. While a detailed analysis of the rules on such applications is beyond the scope of this Q&A, the creditor will need to demonstrate a good arguable case that:
- the creditor is entitled to payment from the debtor;
- the debtor has assets within the jurisdiction;
- there is a real risk that the debtor will dissipate its assets or remove them from the jurisdiction; and
- it is just and convenient, in the circumstances of the case, to grant the injunction.
4.1 On what grounds can the defendant challenge recognition and enforcement of a foreign judgment?
The Cayman Islands Grand Court will not usually make enquiries into an apparently regular foreign judgment; nor will it entertain any attempt to reopen the merits of the underlying dispute. However, a debtor is entitled to raise a challenge on one or more of the following grounds:
- The debtor was not given proper notice of the foreign proceedings;
- The foreign court did not have jurisdiction over the claim;
- The foreign judgment is contrary to Cayman Islands public policy;
- There exists a previous Cayman Islands judgment between the parties in relation to the same dispute;
- There is a previous foreign judgment that can be recognised and enforced in the Cayman Islands between the parties in relation to the same dispute;
- The foreign proceedings (from which the foreign judgment was obtained) were contrary to natural justice; or
- The foreign judgment was obtained by fraud.
At common law, in response to the fresh writ proceeding, the judgment debtor may also be able to raise as a counterclaim any other liability that the creditor has to the debtor (including another foreign judgment in the debtor's favour).
See question 5 for a more detailed analysis of certain grounds of challenge.
4.2 What is the limitation period for filing a challenge?
The process and timing for challenging the recognition of a foreign judgment depend on whether the common law rules or the Reciprocal Enforcement Law applies.
Common law: Upon being served with the writ and statement of claim, the debtor should (if it intends to contest the proceedings) file an acknowledgement of service within the relevant timeframe. The acknowledgement should indicate an intention to defend. Thereafter, the debtor should serve a defence setting out the basis on which it claims the judgment is not enforceable in the Cayman Islands.
A further challenge will be available by way of appeal (to the Court of Appeal) from any adverse decision of the Grand Court. Appeals may be brought pursuant to the Court of Appeal Law (as revised).
Reciprocal Enforcement Law: A judgment creditor's application to register the foreign judgment in the Cayman Islands will be made ex parte, unless the court otherwise directs. Therefore, the judgment debtor will normally be unaware of the registration until a provisional order has been made by the Grand Court. To give the judgment debtor an opportunity to raise any objection, a provisional order will state the period within which an application may be made to set aside the registration. The provisional order will not be enforceable until such period expires. The period is commonly 14 to 28 days.
4.3 Can the defendant seek injunctive relief to prevent enforcement while a challenge is pending?
Theoretically, the judgment debtor can apply for an anticipatory injunction to prevent enforcement steps being taken by the judgment creditor. However, this would be an exceptional course, as the recognition and enforcement processes outlined above already have safeguards built in to ensure that any judgment debtor may raise its objections at an early stage.
5 Court analysis and decision
5.1 Will the court review service of process in the initial proceedings?
Whether the judgment creditor brings an application for recognition and enforcement pursuant to common law or the statutory scheme, the Cayman Islands court will not generally make enquiries into an apparently regular foreign judgment. As such, the Grand Court will not generally review service of process in the initial proceedings unless the judgment debtor raises a specific challenge on that ground.
If a challenge is raised, the Grand Court may refuse to recognise and enforce a judgment if the judgment debtor did not receive proper notice of the proceedings or was not given sufficient opportunity to be heard (meaning that the initial proceedings failed to adhere to the rules of natural justice).
5.2 Will the court review the jurisdiction of the foreign court in the initial proceedings?
Whether the judgment creditor brings an application for recognition and enforcement pursuant to common law or the Reciprocal Enforcement Law, the Cayman Islands court will wish to be satisfied that the judgment debtor had:
- been present in the foreign jurisdiction at the time the proceedings were instituted;
- participated as a plaintiff or counterclaimant in the foreign proceedings;
- voluntarily appeared in the foreign proceedings as a defendant; or
- submitted to the foreign court's jurisdiction as a defendant by prior agreement.
5.3 Will the court review the foreign judgment for compliance with applicable law and public policy?
The Cayman Islands court can refuse to recognise and enforce a foreign judgment where to do so would be contrary to Cayman Islands public policy. For example, the Cayman court may refuse to recognise and enforce judgments obtained in breach of an anti-suit injunction or judgments that breach the judgment debtor's fundamental rights, including essential procedural rights.
On public policy grounds, for example, the Grand Court will not enforce a debt judgment of a foreign court in respect of taxes, fines or other penalties; nor will it enforce a foreign judgment where the effect would be to assist a foreign state to collect tax.
It has been said that the Grand Court will not aid an attempt by a foreign state to act in excess of its jurisdiction by enforcing sovereign acts of that state outside its own territory (Tasarruf Mevduati Sigorta Fonu v Merrill Lynch Bank and Trust Co (Cayman) Ltd 2008 CILR 267).
5.4 Will the court review the merits of the foreign judgment?
No, the Cayman court will not generally review the merits of the foreign judgment, regardless of the jurisdiction in which the foreign judgment was obtained.
5.5 How will the court proceed if the foreign judgment conflicts with a previous judgment in relation to the same dispute between the same parties?
The Cayman Islands court can refuse to recognise and enforce a foreign judgment if it is irreconcilable or inconsistent with a previous Cayman Islands judgment, or a previous foreign judgment which can be recognised and enforced in Cayman Islands, between the same parties in relation to the dispute.
5.6 Are there any other grounds on which the court may refuse to recognise and enforce the foreign judgment?
Subject to certain provisos, the Grand Court will not recognise or enforce foreign judgments which purport to find that any Cayman trust (or a deposition pursuant to such a trust) is void or liable to be set aside on the grounds that the foreign law does not recognise the trust concept or because of heirship, matrimonial or certain other rights. These so-called Cayman Islands ‘firewall' provisions are beyond the scope of this Q&A, but they can be found in the Trusts Law (2020 Revision) at Sections 91-93.
5.7 Is partial recognition and enforcement possible?
Yes, it is possible for the Cayman Islands courts to allow recognition and enforcement of part of a foreign judgment.
5.8 How will the court deal with cost issues (eg, interest, court costs, currency issues)?
Reciprocal Enforcement Law: When the judgment creditor takes steps to register a judgment pursuant to the Reciprocal Enforcement Law, the evidence in support of the application should set out:
- the amount of interest that has accrued up to the date of the application or the rate of interest;
- the date from which interest is recoverable; and
- the date on which it ceases to accrue.
If the foreign judgment includes a determination of costs by the foreign court, this can also be enforced as part of the judgment.
Any registration order which is granted will state the amount of the judgment in Cayman Islands dollars.
The Cayman court will usually order that the costs of the application for registration be assessed and added to the amount of the foreign judgment.
Common law: For judgments that fall within the common law rules, the creditor will need to commence fresh proceedings. If the creditor is seeking interest on the judgment, the particulars of claim should set out the basis on which interest is claimed and how it has been calculated.
If the foreign judgment includes a determination of costs by the foreign court, this should also be included in the particulars of claim, since it may be recoverable.
6.1 Can decisions in relation to the recognition and enforcement of foreign judgments be appealed?
Yes, decisions of the Grand Court (whether under the common law or the Reciprocal Enforcement regime) can be appealed to the Court of Appeal. Such appeals may be founded on several bases, including appeals relating to issues of fact, law and/or jurisdiction.
The Cayman Islands Court of Appeal Law and Rules will apply in the usual way (and appeals will be subject to the usual leave requirements).
6.2 Can the applicant seek injunctive relief while the appeal is pending?
Yes, either party can seek injunctive relief pending appeal. Most commonly, a judgment debtor might seek a stay of the Grand Court decision (granting recognition) pending appeal.
A creditor, on the other hand, might apply for a freezing injunction while the appeal is pending (eg, where it becomes aware of steps being taken by the debtor to dissipate assets), although it is likely that the creditor will have applied for a freezing injunction at an earlier stage.
7 Enforcing the foreign judgment
7.1 Once a declaration of enforceability has been granted, how can the foreign judgment be enforced?
Various enforcement options are available. These include:
- examination of the judgment debtor (to ascertain the means available to the debtor to satisfy the judgment);
- writs of fieri facias (seizure and sale of the judgment debtor's goods and chattels to satisfy the debt and costs of the execution);
- charging orders (providing to the judgment creditor security over the judgment debtor's assets);
- garnishee proceedings (where a person indebted to the judgment debtor must pay monies owed directly to the judgment creditor);
- appointment of receivers by way of equitable execution; and
- attachment of earnings orders (requiring a debtor's employer to deduct money from the debtor's wages and pay it directly to the creditor).
Alternatively, the creditor may petition to wind up the judgment debtor (if it is a company) on the basis that the debtor is unable to pay its debts. The mere threat of liquidation is sometimes enough to encourage the judgment debtor to settle its debt. If the threat alone is insufficient, on the making of a winding up order, an official liquidator will take control of the debtor's affairs, gather in its assets and use those assets to satisfy the debtor's liabilities (which will include the foreign judgment).
7.2 Can the foreign judgment be enforced against third parties?
In the Cayman Islands, a judgment – whether domestic or foreign – cannot be enforced against a party other than the judgment debtor.
It may be possible, however, to apply for an order against a third party to assist with enforcement of the judgment against the debtor. For example, an application for a garnishee order (mentioned at question 7.1) may be used by the judgement creditor to obtain payment directly from a bank which holds funds for the debtor. Alternatively, an application for an attachment of earnings order may be used to obtain payment directly from the debtor's employer (by way of a deduction from the debtor's wages).
8 Trends and predictions
8.1 How would you describe the current enforcement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
A draft amendment to the Foreign Judgments Reciprocal Enforcement Law was published in 2013 (contemplating, among other things, expansion of the number of countries that may register judgments in the Cayman Islands and removal of reciprocity requirements); however, it never materialised into a bill. It seems unlikely that the draft will be revived any time soon.
The United Kingdom is considering whether it will sign up to the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters 2019. If the United Kingdom does join, it is likely that the convention will be extended to the Cayman Islands similar to the way in which the United Kingdom extended the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (for further details please see here).
9 Tips and traps
9.1 What are your top tips for smooth recognition and enforcement of foreign judgments, and what potential sticking points would you highlight?
It is important to identify at the outset which specific rules apply to the judgment in question and to carefully follow the relevant procedures.
Legal advice should be sought from counsel practising in the originating foreign jurisdiction and from a reputable Cayman Islands law firm with specialist experience in this field.
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.