When it enacted the Arbitration Law 2012, the Cayman Islands adopted a modern arbitration statute based on the UNCITRAL Model Law on International Commercial Arbitration 1985 (as amended in 2006) and the English Arbitration Act 1996. The legislation supports and protects party autonomy and establishes three fundamental principles: the fair resolution of disputes by an impartial tribunal without undue delay or expense; limits on the scope for court intervention; and flexibility for parties to agree on how their dispute is to be resolved.
However, there are mandatory provisions designed to protect the integrity of the arbitration processes, including provisions relating to impartiality and conflicts of interest, and the confidentiality of proceedings. There are no restrictions on the types of dispute that may be referred to arbitration, provided that the arbitration agreement is not determined to be contrary to public policy and provided that no other law of the Cayman Islands determines the dispute to be non-arbitrable.
The Cayman Islands Foreign Arbitral Awards Enforcement Law (1997 Revision) gives effect to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (the New York Convention).
Parties have the freedom to select arbitrators, agree on the number of arbitrators, the procedure for their appointment, and any qualifications they deem necessary for the arbitrators to possess. The court has powers that can be exercised when necessary to support the arbitration proceedings and Part VIII of the Law contains provisions relating to interim relief based on the UNCITRAL Model Law. Tribunals do not need to seek assistance from the court to grant interim relief.
As a tax neutral jurisdiction with no income, capital gains, consumption or corporation taxes in the Cayman Islands, it is unlikely that there will be any local tax implications relating to an arbitral award made in the Cayman Islands. Transfers of local real estate may attract stamp duty and the importation of goods into the Cayman Islands is subject to duty.
The on-Island expertise makes the Cayman Islands an attractive location for arbitration, with access to accomplished and experienced arbitrators, lawyers, service providers, financial institutions, and investment fund industry participants with a wealth of collective knowledge and experience, drawing from diverse backgrounds, nationalities, genders, expertise, linguistic skills, and qualifications. However, there is no restriction preventing the appointment of foreign arbitrators and attorneys to attend the hearings.
One drawback has previously been the lack of a dedicated and purpose-built arbitration centre. This will change with the opening of the Cayman International Arbitration Centre (CIAC), planned for late 2020. CIAC will offer state of the art facilities consisting of two large hearing rooms, three meeting rooms that can be used for breakout sessions or other meetings, and a boardroom. Emphasis will be placed on confidentiality and privacy through the use of double walls and soundproofing and cybersecurity measures. Located in Camana Bay there is easy access to world class restaurants, shopping, hotels, and beaches. The secure town centre with 24/7 security and walkability is ideal for arbitrations that may be held outside typical working hours due to the different time zones of parties involved. The international airport offers scheduled non-stop service from the United States, the United Kingdom, Canada, Cuba, and Honduras, among others, making the jurisdiction easily accessible.
CIAC’s technology will go beyond simple video conferencing; the goal is to provide technologically advanced hearing rooms with the focus on evidence presentation and video communication, allowing remote appearances for arbitrators, counsel, witnesses, interpreters, court reporters, and other parties. Flexibility and ease of use will be key. The technology is a tool and it is up to the parties to choose which of the options will best service their requirements. The rooms can be configured into multiple floor plans for maximum flexibility. The ability to perform all or part of the hearing remotely is advantageous as it means that the proceedings can move forward without delay, addressing two main complaints about arbitration: expense and slow timelines. CIAC’s users will benefit not just from the wealth of knowledge of the finance, banking, and legal sectors but also from on-island experience and expertise in the use of financial, regulatory, and legal technology.
Human Driven, Technology Enhanced
CIAC’s goal is to be “human driven, technology enhanced.” Despite the focus on innovative technology, the human element won’t be ignored. CIAC’s Secretariat and administration will be full-service, aiming to cater to any needs of the parties, from case management, printing services, technology support, and, through a local immigration service provider, to arrange for the expeditious processing of all temporary work permits for foreign arbitrators and lawyers.
Given the role the Cayman Islands has in global wealth management and international finance, it is a natural fit for CIAC to offer specialised Rules and panels to reduce uncertainty and facilitate dispute settlement. Among CIAC’S list of panel members are retired Grand Court judges, local and international bankers, regulators, and representatives of other market participants, diverse in terms of gender and geographic reach. CIAC aspires to be a great source of collective knowledge and experience relating to financial services disputes and arbitration.
Parties will have the option to choose ad-hoc arbitration, such as under the UNCITRAL Rules, or institutional arbitration, which can be administered by another institution with proceedings physically or virtually held at the centre in Cayman or they may opt for a CIAC administered arbitration, including the option to choose specialised CIAC Rules for financial disputes. While the final version of the rules is still under revision, the main features of the specialised rules include the persons identified on the panel of experts being eligible to be appointed arbitrator, unless otherwise agreed of the parties, rules that emphasise a streamlined, expedient process for the hearing, relating to interim measures, fast track arbitration, availability of arbitrators appointed, and emergency arbitration.
The presence of two nearby arbitration seats in New York and the British Virgin Islands has driven CIAC to set itself apart. It offers the advantage of geographic convenience for many parties and is an alternative for parties who may be reluctant to have their dispute resolved in the United States, as well as harnessing the energy from the local community with initiatives to work with local and international legal practitioners, the financial and wealth management sectors, and the new Cayman chapter of the Chartered Institute of Arbitrators (CIArb), as well as the Cayman Islands law school and the rapidly growing technology sector in Cayman.
Having established itself as a leading international financial centre over the last 50 years, Cayman now intends to establish itself as a leading international dispute resolution centre given its financial market expertise, neutral position, arbitration friendly legislation, and infrastructure, Cayman is a logical choice for conducting arbitral hearings and aims to be a “port of entry” into the arbitration world for the Caribbean and a hub for financial services related arbitration and dispute resolution.
Megan is an attorney with Paget-Brown Chambers and is the CEO of the Cayman International Arbitration Centre. Her practice areas include Arbitration and Mediation, Trusts, Corporate Governance, Blockchain Technology and Digital Assets. She is admitted to Practice Law in the Cayman Islands, the District of Columbia, Wyoming and Missouri.