Prior to the Amendment, litigants could not obtain free-standing freezing orders (also known as Mareva injunctions) against foreign defendants to freeze Cayman Islands property that was at risk of dissipation pending determination of the legal proceedings on foot in another jurisdiction where there was no cause of action justiciable in the Cayman Islands. In one recent instance, the Court did grant an interim order without there being any cause of action in the Islands. However, subsequent cases confirmed the Court’s lack of power to do so, absent legislative amendment.
Pursuant to the Amendment, the Court now has the power to appoint a receiver or grant other interim relief (including any interlocutory injunction) to parties in relation to proceedings which have been or are to be commenced in a court outside the Islands and are capable of giving rise to a judgment which may be enforced in the Islands, under its legislation or at common law.
The Court may exercise this power notwithstanding that (a) the subject matter of such proceedings would otherwise not give rise to a cause of action over which the Court would have jurisdiction or (b) the appointment of the receiver or the interim relief sought is not ancillary or incidental to any proceedings in the Islands.
An order may be made either unconditionally or on such terms and conditions as the Court thinks fit. The Court may, however, refuse an application for the appointment of a receiver or the grant of interim relief if, in its opinion, granting the application would be unjust or inconvenient.
In discussing the legal and technical developments that gave rise to the Amendment, the Cayman Islands Law Reform Commission stated “it has now been accepted that the Mareva injunction and similar forms of interim relief are appropriate and a necessity in the context of modern realities…. [In addition, there] is a need to expressly avoid any notion that the Cayman Islands can be viewed as a cover for persons wishing to evade liabilities imposed on them by the courts to which they are subject.”
The Amendment effects a very significant and welcome broadening of the powers of the Court, not only addressing the increased demand in the modern international world for multi-jurisdictional enforcement, but also reflecting the role that the Cayman Islands wish to play in meeting that demand.