Cayman Islands
Answer ... 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.
Cayman Islands
Answer ... 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 [2011] 1 CILR 79).
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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).
Cayman Islands
Answer ... 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.
Cayman Islands
Answer ... 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.
Cayman Islands
Answer ... 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).
Cayman Islands
Answer ... 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).
Cayman Islands
Answer ... 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.