In a welcome development for victims of international fraud, the Cayman Islands’ legislature has passed an act giving its courts the power to grant interim relief in aid of foreign proceedings. The act came into force on 20 October 2014.
The act puts on a statutory footing (and extends) the Grand Court’s landmark 2011 decision in VTB Capital Plc v Malofeev, a case in which PCB Litigation LLP acted for the claimants. In that case the Court was asked to, and did, grant a worldwide free-standing freezing injunction against two Defendants in support of proceedings in the English High Court, despite no substantive proceedings being brought in the Cayman Islands.
The Cayman Islands’ Grand Court can now order any interim relief available to it in domestic proceedings in respect of proceedings which have or are to be commenced in an overseas court, and which could give rise to an enforceable judgment in the Cayman Islands. This is even the case where the cause of action being litigated in the foreign proceedings is not one which could be litigated in the Cayman Islands. However, the Courts are reminded in the act that the new power is ancillary to the foreign proceedings, and that the purpose of the power is assist the foreign court which has primary jurisdiction over the dispute. As with similar legislation in other jurisdictions, the Cayman Courts will be entitled to refuse an application for interim relief if it would be unjust or inconvenient to make an order.
The new legislation is timely step forward for the offshore jurisdiction, which is seeking to bolster its reputation as a lead actor in the fight against global fraud and corruption.