Until July last year, the law governing arbitration in the Cayman Islands did not meet modern international standards and was used primarily for resolving domestic disputes. The new Arbitration Law, which came into force on 2 July 2012 and applies to all Cayman-seat arbitrations commenced after that date, completely overhauled the arbitration regime and has brought it in line with the current UNCITRAL Model Law.

The Cayman Islands Grand Court rules committee has now approved a wholly revised suite of procedural rules, together with necessary amendments to the existing rules for financial services proceedings and service of process out of the jurisdiction. This will provide practitioners with a comprehensive procedural code for arbitration-related court applications and applications to enforce arbitral awards.

The Role of The Court

The 2012 law is expressly founded on three fundamental principles that are a hallmark of modern arbitration: fair resolution of disputes by an impartial tribunal without undue delay or expense; maximum party autonomy, subject only to safeguards in the public interest; and limited judicial intervention. The Grand Court rules governing arbitration proceedings are expressly required to be construed in accordance with these principles.

These rules reflect the principle of minimising court intervention in matters where the parties have agreed to arbitrate. However, a balance must be struck between, on the one hand, providing sufficient judicial support to arbitrations and exercising a supervisory role (in limited, defined circumstances) to maintain the integrity of an arbitration process; and, on the other hand, enabling too much intervention so that an arbitral process is undermined and respondents are given the opportunity to delay, or even derail, an arbitration through parallel court proceedings.

The Grand Court rules seek to strike this balance by providing a procedural framework in which the court will secure the just, expeditious and economical disposal of arbitration applications; by giving procedural effect to the 2012 law, which generally limits the court’s ability to intervene in the substantive arbitration proceedings except in circumstances where the tribunal is unavailable or incapacitated or to where all available tribunal processes have first been exhausted; and by providing for the stay of legal proceedings commenced in breach of an arbitration agreement.

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