Cayman Court Confirms Interim Arbitration Awards May Be Enforced As Judgments

• Law Firm: Ogier
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Author: Jeremy Snead
• Published date: 15 February 2023

The wide-ranging enforceability of an arbitration award is one of the major attractions for seeking to arbitrate against clients with assets in different jurisdictions. The costs, length and complexity of arbitral proceedings may factor against them. In a helpful judgment of the Cayman Islands Grand Court, Justice Kawaley has confirmed, for the first time, that interim arbitration awards may be enforced as judgments in the Cayman Islands. This may provide a useful strategic opportunity for parties to ongoing arbitrations.

In the Cayman Islands, the Foreign Arbitral Awards Enforcement Act of 1997 (FAAEA) provides a straightforward process for the recognition of arbitration awards made in pursuance to an arbitration agreement of a state (other than the Cayman Islands) which is a party to the New York Convention (the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards). For more detail see our 2021 article snapshot: enforcement of foreign arbitral awards in the Cayman Islands. As of January this year the New York Convention has 172 state parties, which provides for much greater recognition in the Cayman Islands than for foreign judgments. For the enforcement of domestic arbitration awards there is the Cayman Islands Arbitration Act of 2012 (2012 Act).

Both the Act and the FAAEA expressly provide for the recognition of an arbitration award at an ex parte hearing. Each provide for very limited grounds upon which the Court may refuse judgment, which are to be construed narrowly.

However, the 2012 Act expressly provides for enforcement of provisional or interim awards. The FAAEA does not, and the point has not been the subject of any reported judgment in the Cayman Islands.

In the matter of Al-Haidar v Rao et al (FSD 328 of 2022, IKJ) Justice Kawaley was asked to grant leave to enforce an interim award made in favour of the plaintiff (details of the award were not given). Although counsel referred to Singaporean authority that addressed awards by emergency arbitrators there was no judicial authority that the term "award" used in a foreign enforcement statute such as the FAAEA should, without more, be construed as including an interim as well as a final award and Justice Kawaley considered the argument "resting on academic text authority alone...too ambitious to be accepted in the context of the present ex parte application."

Justice Kawaley then went on to consider...