Enforcement of Foreign Judgments in the Cayman Islands

When seeking to enforce a foreign judgment in the Cayman Islands, it is essential to understand the legal framework governing such enforcement. In this article HSM Partner Kerrie Cox highlights the key principles and procedures concerning the recognition and enforcement of foreign judgments.

Statutory Enforcement

Under the Foreign Judgments Reciprocal Enforcement Act (1996 Revision), the Cayman Islands offers a mechanism for the registration of foreign judgments. However, the Act only applies to judgments originating from Australia and its External Territories. As such, the Act is of limited practical applicability.

Common Law Enforcement

In the absence of statutory provisions for the enforcement of foreign judgments, the Cayman Islands follows the common law approach. Upon application, the Grand Court may enforce a foreign judgment subject to a series of formal, mandatory requirements:

• Competent Jurisdiction: The foreign judgment must be issued by a court that has competent jurisdiction. This means the court must have had the authority to hear the case and make a binding decision.
• Liquidated Sum: The judgment must impose a liability to pay a fixed (liquidated) sum of money. It is important to note that the foreign judgment must be in personam, meaning it involves a claim brought against a person to do or refrain from doing a specific act.
• Non-money judgments: may be enforced where the principles of comity apply.
• Final and Conclusive Judgment: The judgment must be final and conclusive, even though it may be subject to appeal in the foreign courts.
• Exclusion of Taxes, Fines, or Penalties: Judgments involving taxes, fines, or penalties are not enforceable under the Cayman Islands’ common law framework. This exclusion ensures that judgments with punitive or regulatory objectives cannot be used to encroach upon the Cayman Islands’ legal system.
• Natural Justice and Public Policy: The foreign judgment must not conflict with the principles of natural justice or public policy in the Cayman Islands. For instance, the judgment should not violate the rights of the defendant in a way that is inconsistent with Cayman Islands law.
• Cayman Trusts: Pursuant to the relevant provisions of the Trusts Act (2021 Revision), the Grand Court will not recognise or enforce a foreign judgment that does not apply Cayman Islands law when determining issues such as: (a) capacity; (b) validity, administration; or (c) the existence and extent of powers under a Cayman trust.

Limitation
Proceedings for the enforcement of a foreign judgment under statutory or common law principles must be brought within six (6) years from the date of the judgment (or any appeal thereof).

Procedure

Statutory Enforcement

The procedure for enforcing a foreign judgment under the Foreign Judgments Reciprocal Enforcement Act requires an ex parte Originating Summons to be issued in the Financial Services Division of the Grand Court in the Cayman Islands supported by an Affidavit which: (a) exhibits the judgment (and any required translation thereof certified by a notary public); (b) states the name, trade or business and the usual or last known place of business of the judgment creditor and debtor; and (c) states that the judgment creditor is entitled to enforce the judgment.

The court may direct that the Summons be served on the judgment debtor. If the court is satisfied that the judgment meets the statutory criteria, it may register the judgment. The judgment creditor is required to serve the Notice of Registration on the judgment debtor, who will have a limited time to apply to set aside the registration. If the judgment debtor does not challenge the registration, the registered judgment is treated as if it were a judgment of the court.

Common Law Enforcement

Alternatively, the procedure for enforcement at common law involves commencing proceedings by filing a Writ of Summons based on the foreign judgment. The Writ must be served on the judgment debtor. Leave of the court will be required if the defendant is located out of the jurisdiction. The judgment debtor must acknowledge service and file a defence. Depending on whether a defence is filed, a judgment creditor may apply for judgment in default or summary judgment.

Remedies

Once a judgment is recognised, it may be enforced through a number of different enforcement remedies available in the Cayman Islands.

Conclusion

While the Cayman Islands has in place a statutory framework which provides a streamlined approach for enforcement judgments from Australia, enforcement of judgments from other jurisdictions relies on common law principles. Specifically, issues related to trusts and asset ownership can introduce complexities that may necessitate further legal analysis.

Should you need assistance with the enforcement of a foreign judgment, or if you have specific questions regarding a particular case, HSM’s experienced litigation team is on hand to provide advice tailored to your situation.