Enforcement Of Foreign Arbitral Awards In The Cayman Islands

• Published date: 01 September 2023
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Baker & Partners
• Author: Mr Adam Crane and Nia Statham

This article is a republication of an article published in American Bankruptcy Institute International Committee August 2023 Newsletter. © 2023 AMERICAN BANKRUPTCY INSTITUTE REPRINTED WITH PERMISSION, ALL RIGHTS RESERVED. 66 CANAL CENTER PLAZA, SUITE 600 ALEXANDRIA, VA 22314

The Cayman Islands implemented the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (otherwise known as the "New York Convention") via the Foreign Arbitral Awards Enforcement Act (1997 Revision) (the "Enforcement Act"). As such, arbitral awards made in any state that is a party to the New York Convention ("Convention Awards" can be recognised and enforced in the Cayman Islands under the Enforcement Act.

Non-Convention Awards (also referred to in this article as "Foreign Awards") are enforced in the Cayman Islands under the Arbitration Act, 2012. Section 72(5) of the Arbitration Act provides that an arbitral award, irrespective of the country in which it was made, is treated as binding and can be enforced by an arbitral creditor making an application to the Grand Court of the Cayman Islands. Order 73, rule 31 of the Grand Court Rules, which deals with the enforcement of foreign arbitral awards, directs that applications should be made by way of an ex parte Originating Summons.

Leave to enforce Foreign Awards and Convention Awards against an arbitral award debtor must be sought from the Grand Court and is subject to sections 6 and 7 of the Enforcement Act. In essence, these sections require applicants to submit a duly authenticated or certified copy of the arbitral award; an original or certified copy of the arbitration agreement; and a certified translation of the same where the documents are in a foreign language. Furthermore, Convention Awards and Foreign Awards are both subject to the same limitations imposed in section 7 of the Enforcement Act, which sets out the circumstances in which enforcement of these awards may be refused.

The list in section 7 is extensive, but some examples include:

1. incapacity of a party;
2. invalidity of the arbitration agreement under its governing law;
3. lack of notice of the arbitration proceedings to a party and
4. whether the award is binding on the parties.

The court may also refuse to enforce an award where the matter was not capable of settlement by arbitration or if it would be contrary to public policy to enforce the award.

Once an award is recognised by the Grand Court and becomes enforceable¹, an arbitral award creditor can...