International arbitration as a method of resolving disputes is growing in the Cayman Islands, where disputes have more traditionally been resolved in court proceedings. Domestic parties as well as international parties to an agreement that has connections with the Cayman Islands are choosing arbitration seated in the Cayman Islands (especially where the contract is subject to substantive Cayman Islands law), to avail themselves of the advantages of arbitration in an environment that is well staffed with experienced practitioners and arbitrators, and where the courts support and uphold arbitration. Further, international arbitration awards are frequently the subject of recognition and enforcement proceedings before Cayman Islands courts.

The Cayman Islands is a leading international financial centre, and the industries that experience international arbitration activity in the Cayman Islands reflect that; as such, the preponderance of international arbitration activity concerns financial services (including investment funds in particular) and professional services. These industries are prevalent in the Cayman Islands and are attracted to the advantages of arbitration, such as confidentiality.

The Cayman International Mediation and Arbitration Centre (CI-MAC) is used for international arbitration in the Cayman Islands, though Cayman-seated arbitrations also take place before other non-Cayman-based institutions (including the London Court of International Arbitration (LCIA) and the American Arbitration Association (AAA)) as well as on an ad hoc basis. No new arbitral institutions have been established in the Cayman Islands in the last 12 months.

The specific court designated to hear disputes related to international and domestic arbitrations is the Financial Services Division (FSD) of the Grand Court of the Cayman Islands. Judges in the FSD are experienced in dealing with arbitration matters.

Two statutes govern international arbitration in the Cayman Islands:

• the Arbitration Act 2012 (the “Arbitration Act”) applies to Cayman Islands-seated arbitrations; and
• the Foreign Arbitration Awards Enforcement Act (1997 Revision) (the “Enforcement Act”) gives effect in the Cayman Islands to the New York Convention, and applies to non-domestic arbitration awards made in a state that is party to that convention.

The Arbitration Act is largely based on the UNCITRAL Model Law but also contains elements based on the English Arbitration Act 1996. The ways in which it diverges from the Model Law include the following:

• the default number of arbitrators, which is a single arbitrator under the Arbitration Act;
• there are more extensive provisions under the Arbitration Act concerning the severability of the arbitration agreement;
• there is power in certain circumstances for the court to grant leave to appeal on a question of law, whereas there is no such power under the Model Law; and
• the time limit for applying to the court to set aside an award is 30 days under the Arbitration Act, as opposed to three months under the Model Law.

The Enforcement Act is substantially similar to the English Arbitration Act 1975.

There have been no significant changes to Cayman Islands arbitration law in the past year, and no legislation is pending.

To be enforceable under Cayman Islands law, an arbitration agreement must be in writing and contained in a document signed by the parties, or in an exchange of letters, faxes, telegrams, electronic communications or other means of communication that provide a record of the agreement (Section 4(3) Arbitration Act).

All types of dispute can be submitted to arbitration by agreement unless the arbitration agreement is contrary to public policy or to Cayman Islands law (Section 26 Arbitration Act).

The basis of arbitrability was considered by the UK Privy Council on appeal from the Cayman Islands courts in FamilyMart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corporation [2023] UKPC 33 in relation to the arbitrability of elements of a just and equitable winding-up petition, and specifically:

• subject matter non-arbitrability, where arbitration is barred because statute preserves the right of access to the courts; and
• remedial non-arbitrability, where certain remedies are barred, albeit that the dispute is itself arbitrable.

In this case, although the granting of a winding-up order was held to be remedially non-arbitral, disputes in a just and equitable winding-up – such as whether a party is in breach of a shareholders’ agreement or whether equitable rights arising out of the relationship have been flouted – may nonetheless be arbitrable even though only the court (and not the arbitral tribunal) has jurisdiction to grant a winding-up order.

The Cayman Islands courts would be likely to take the same approach as the English courts with respect to determining the law governing an arbitration agreement. This approach is that, in the absence of an express choice of governing law, the arbitration agreement will be governed by the system of law with which it is most closely connected; however, if the parties have chosen a seat of arbitration, then as a general rule the law applicable is the law of the seat (see Enka Insat ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38, as discussed in UniCredit Bank GmbH v RusChemAlliance LLC [2024] UKSC 30).

An arbitral clause may be considered valid even if the rest of the contract in which it is contained is invalid. Cayman Islands law:

• recognises the separability of an arbitration agreement and provides that an arbitration agreement shall be treated as a distinct agreement from the agreement of which it forms or was intended to form part (Section 4(5) Arbitration Act); and
• provides that an arbitration agreement is not void, voidable or otherwise unenforceable only because the agreement of which it forms part is void, voidable or otherwise unenforceable (Section 4(6)).

A dispute about the validity of an agreement is arbitrable pursuant to the arbitration agreement (Section 4(7)) and, for the purposes of the tribunal ruling on its own jurisdiction, the arbitration clause is to be treated as an independent agreement (Section 27(2)).

Parties are free to select arbitrators, subject to challenge before the court regarding:

• impartiality or independence;
• lack of the qualifications agreed by the parties; and
• a continuing duty on arbitrators to disclose circumstances that might reasonably compromise their impartiality and independence (Section 18 Arbitration Act).

Subject to any default appointment procedure that the parties have chosen either specifically or under their chosen rules, the statutory default procedure is appointment by the appointing authority. In the case of a sole arbitrator, appointment is made by the appointing authority at the request of a party. In the case of two or more arbitrators, appointment is made at the request of a party after the other party has failed to appoint an arbitrator within 30 days of a written request (Section 16 Arbitration Act).

The appointing authority is either chosen by the parties or is designated by the court in default of agreement (Section 2(1) Arbitration Act). Where the parties fail to determine the number of arbitrators, the default is a single arbitrator (Section 15 Arbitration Act). There are no default provisions applicable to multiparty arbitrations.

The Cayman Islands courts can intervene in the selection of arbitrators by upholding a challenge (see 4.4 Challenge and Removal of Arbitrators).

A challenge can be made to arbitrators if there are justifiable doubts as to their impartiality and independence, or if they do not possess the qualifications agreed by the parties (Section 18 Arbitration Act). Subject to any agreed challenge procedure, the challenge is first made to the arbitral tribunal, and if unsuccessful the challenge may be referred to the court (Section 19 Arbitration Act).

The court has power to remove arbitrators on the grounds of:

• physical or mental incapacity;
• failure to properly conduct the proceedings or failure to use reasonable dispatch; and
• where substantial injustice will or has been caused (Section 20 Arbitration Act).

An arbitrator is required to disclose – prior to appointment and on a continuing basis – any circumstances that might reasonably compromise their independence or impartiality (Section 18 Arbitration Act).

An arbitral tribunal may rule on a party’s challenge to the tribunal’s own jurisdiction, including any objections to the existence or validity of the arbitration agreement (Section 27 Arbitration Act). This gives effect to the principle of competence-competence, and it was expressly noted by the Cayman Islands court in Al-Haidar v Rao (unreported, 15 April 2024) that “the competence-competence principle forms part of Cayman Islands law”. A challenge to the tribunal’s jurisdiction must be raised no later than submission of the statement of defence (Section 27(4)). Appointment or participation in the appointment of an arbitrator does not preclude a party from challenging the tribunal’s jurisdiction (Section 27(5)).

At the request of either party, the court has the power to rule on the jurisdiction of the arbitral tribunal if the tribunal has itself ruled that it has jurisdiction (Section 27(9) Arbitration Act).

The Arbitration Act does not contain a power for the court to review a negative ruling on jurisdiction by an arbitral tribunal, although an application for leave to appeal on a point of law might be possible.

A party may ask the court to decide on the jurisdiction of the arbitral tribunal within 30 days of notice of the tribunal’s ruling that it has jurisdiction (Section 27(9) Arbitration Act).

In relation to a judicial review of a ruling by the arbitral tribunal as to its jurisdiction, the Cayman Islands courts have adopted the approach of the UK Supreme Court in Dallah Real Estate and Tourism Holding Co v Government of Pakistan [2010] UKSC 46 that the standard of judicial review is de novo (Gol Linhas Aéreas SA v MatlinPatterson Global Opportunities Partners (Cayman) II LP [2020] 2 CILR 704, upheld at [2022] UKPC 21).

The Cayman Islands courts are bound (in international arbitration) to uphold the arbitration agreement by staying legal proceedings upon application by a party, unless satisfied that the arbitration agreement is null and void, inoperative or incapable of being performed, or that there is no dispute between the parties (Section 4 Enforcement Act).

Arbitration is a contractual remedy and Cayman Islands law does not allow an arbitral tribunal to assume jurisdiction over non-parties, save that a person claiming “through or under” a party to an arbitration agreement is deemed to be a party (Section 2 Arbitration Act).

Further, in a dispute about whether a company was or was not a party to an arbitration clause, the UK Privy Council upheld a decision of the Cayman Islands Court of Appeal that a respondent was precluded by issue estoppel (a decision of the Brazilian court) from resisting enforcement on the ground that it did not agree to arbitration (Gol Linhas Aereas v MatlinPatterson Global Opportunities Partners (Cayman) II LP [2022] UKPC 21).

The arbitral tribunal is permitted (unless the parties otherwise agree) to:

• grant interim measures to maintain or restore a party to their original position pending determination of the dispute;
• restrain a party from taking action that could harm or prejudice the arbitral process;
• preserve assets out of which an award may be satisfied; and
• preserve evidence (Section 44 Arbitration Act).

The Cayman Islands courts may order interim relief in arbitral proceedings, but may only do so to the extent that the tribunal has no power or is unable for the time being to act effectively. Types of interim relief that the courts can grant include:

• security for the amount in dispute;
• a freezing injunction;
• an interim injunction; and
• orders for the preservation of evidence (Section 43 Arbitration Act). 

More widely, the courts have the same powers to issue an interim measure as they have in relation to proceedings in court, irrespective of whether the seat of arbitration is in the Cayman Islands (Section 54 Arbitration Act). The courts will, in appropriate circumstances, grant interim relief before the tribunal has been constituted.

The CI-MAC rules provide for appointment of emergency arbitrators, but also provide that decisions made by emergency arbitrators will not bind the tribunal (once it is constituted), which will have power to reconsider, modify or vacate any interim order or award issued by the emergency arbitrator, including their ruling on their own jurisdiction. The Cayman Islands courts have not yet ruled on the enforceability of emergency arbitrator relief.

The arbitral tribunal has power to order security for costs, unless otherwise agreed by the parties (Section 38(2)(a) Arbitration Act). The court also has power to order security for costs but may only do so to the extent that the tribunal has no power or is unable for the time being to act effectively.

The parties are free to agree on the procedure of arbitration, and in the absence of agreement the arbitral tribunal can conduct the arbitration in such manner as it considers appropriate (in both cases, subject to the provisions of the Arbitration Act) (Section 29 Arbitration Act). See 7.3 Powers and Duties of Arbitrators.

As stated in 7.1 Governing Rules, the parties are free to agree on the procedure, and the tribunal has discretion in the conduct of the arbitration. The Arbitration Act does contain some procedural steps, including (subject to any agreement to the contrary) the following:

• the claimant is required to state the facts supporting its claim, the points in issues, and the relief or remedy sought, and the respondent is required to state its defence (Section 32 Arbitration Act); and
• the tribunal is required to decide whether to have an oral hearing and on production of documents, and to hold hearings at an appropriate stage on a party’s request (Section 33 Arbitration Act).

Powers

The parties have considerable freedom to confer powers on arbitrators, and many of the powers provided by the Arbitration Act are expressly subject to any agreement between the parties to the contrary. Examples of those statutory powers include the power to:

• decide on their own jurisdiction;
• grant interim relief;
• order security for costs;
• decide upon the procedure;
• exercise default powers, including terminating the proceedings;
• make interim awards;
• award interest;
• award costs; and
• correct computation, clerical and typographical errors in awards.

Duties

The arbitral tribunal is bound to:

• act fairly and impartially;
• allow each party a reasonable opportunity to present its case; and
• conduct the arbitration without unnecessary delay and expense (Section 28 Arbitration Act).

Subject to any agreement to the contrary, the parties are free to choose their representatives in arbitration; they are not required to be represented by a legal practitioner (Section 34 Arbitration Act).

The parties have freedom to agree the evidential procedure, and this is often (but not always) achieved by the adoption of the rules of an arbitral institution such as CI-MAC. Subject to that, as part of its power to decide on the procedure to be adopted, the arbitral tribunal can decide evidential procedure (including admissibility and weight of evidence), and has specific power to order discovery of documents, interrogatories, witness evidence on affidavit or oath (Section 38 Arbitration Act).

Subject to any agreement to the contrary, the arbitral tribunal is not bound by the rules of evidence but may inform itself in relation to any matter as it thinks fit (Section 33(6) Arbitration Act). However, given the duty of fairness and that an award may be set aside on the grounds of misconduct or breach natural justice, tribunals are cautious about the means in which evidence is admitted. Arbitrations conducted pursuant to institutional rules will be subject to their provisions as to evidence, and it is common in international arbitration to use the IBA Rules on the Taking of Evidence in International Arbitration.

Subject to any agreement to the contrary, the arbitral tribunal has power to order discovery and for a party or witness to be examined on oath (Section 38(2) Arbitration Act). The court has power to compel a witness in the Cayman Islands to attend and give evidence, and to produce specified documents (Section 40 Arbitration Act).

Subject again to any agreement to the contrary, if any person, whether or not a party to the arbitration agreement, refuses or fails to do the following, a party may apply to the court for an order requiring them to do so before the court:

• attend for examination when required by subpoena or by the arbitrator to do so;
• take the oath or affirm;
• answer a question that the arbitrator has required them to answer;
• produce a document as required by subpoena or the arbitrator; or
• do anything required by the arbitrator (Section 41 Arbitration Act).

Arbitral proceedings in the Cayman Islands are to be conducted confidentially and in private; the statements of case, evidence, rulings and awards are confidential, and the parties are under a duty of confidentiality. Information in arbitral proceedings can be disclosed in certain circumstances, including if it can reasonably be considered as necessary to protect a party’s lawful interests, or if is necessary in the interests of justice (Sections 2(1) and 81 Arbitration Act).

Cayman Islands law contains requirements as to the form and content of the arbitral award. It must be signed by the arbitrator(s), state the reasons on which the award is based (unless the parties have agreed otherwise) and state the date and seat of the award, and a copy must be delivered to each party (Section 63 Arbitration Act). 

Unless the arbitration agreement contains a time limit for delivery of the award, there is no set time within which an award must be delivered. Where an award is remitted by the court to the arbitral tribunal, the arbitral tribunal must make its award within three months of the order remitting the award (unless the order provides otherwise) (Sections 76(8) and 78(3) Arbitration Act).

The parties can agree on the remedies that the arbitral tribunal can award, and in the absence of such agreement the arbitral tribunal can award any remedy or relief that could have been ordered had the dispute proceeded in court (Section 57 Arbitration Act).

Although there is no statutory entitlement to interest or legal costs, subject to any agreement of the parties otherwise, interest and costs are at the discretion of the arbitral tribunal. Post-award interest runs at the same rate as for judgment debts unless the award directs otherwise (Sections 58 and 64 Arbitration Act).

There is no entitlement to appeal an arbitral award to the Cayman Islands courts. The courts can give leave to appeal an arbitral award on a question of law arising out of the award. The requirements for granting leave include that the determination of the question will substantially affect the rights of one or more of the parties, and the decision is either obviously wrong or the question is one of general public importance (Section 76 Arbitration Act).

The courts also have the power to set aside an arbitral award on the following grounds:

• a party was under an incapacity or entered into an arbitration agreement under duress;
• the arbitration agreement was not valid;
• the party was not given proper notice, or was otherwise unable to present their case;
• the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of that submission;
• the composition of the tribunal or arbitral procedure was not in accordance with the parties’ agreement;
• the award was induced or affected by fraud, corruption or misconduct on the part of the arbitrator;
• breach of natural justice;
• the subject matter of the dispute was not arbitrable; or
• the award is contrary to public policy (Section 75 Arbitration Act). 

The courts have held a dispute not falling within the terms of the submission to arbitration (see the fourth point above) to be “effectively the same as saying that the tribunal did not have substantive jurisdiction to determine the issue in dispute” (Appalachian Reinsurance (Bermuda) Ltd v Mangino, Hall, Tobin and Greenlight Reinsurance Ltd [2014] 1 CILR 152).

In relation to both an appeal or an application to set aside an award, the applicant must first have exhausted every available arbitral process of appeal or review and for correction of the award. The time limit for applying for leave to appeal or to set aside the award is one month from the date of the award or, if there has been any appeal or review by the arbitral tribunal, from the date that the applicant was notified of the result (Section 77 Arbitration Act).

Parties can agree to exclude the right to apply for leave to appeal against an award (Section 76(2) Arbitration Act), but not the right to challenge the award under Section 75 of the Arbitration Act. There is no statutory provision entitling the parties to expand the scope of appeal, and this question has not been considered by the Cayman Islands courts.

The standard of judicial review in respect of an appeal on a point of law is deferential rather than de novo, involving an analysis of the arbitral tribunal’s decision.

The Cayman Islands is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards as a UK overseas territory. The UK submitted a notification to extend territorial application to the Cayman Islands in 1980, limited to the enforcement of awards made in another convention state.

The Cayman Islands has ratified the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards, and has had three bilateral investment treaties extended to it by the UK (with Belize, Panama and St Lucia).

The Cayman Islands is also a party to the 1967 ICSID Convention, as the UK extended the operative provisions of the Arbitration (International Disputes) Act 1966 to the Cayman Islands by the Arbitration (International Investment Disputes) Act 1966 (Application to Colonies etc.) Order 1967.

A Cayman-seated award may be enforced, with leave of the court, in the same manner as a court judgment or order to the same effect (Section 72(1) Arbitration Act). A New York Convention award may be recognised and enforced under the Enforcement Act in the same manner as a Cayman-seated award (Section 5). Originals or duly authenticated copies of the award and the arbitration agreement are required, together with certified translations if in a language other than English (Section 6 Enforcement Act). The same procedure applies to the enforcement of both Cayman-seated and foreign awards. 

Application is made by an ex parte originating summons with a supporting affidavit. Following the issuance and service of an order for the enforcement of the award, the respondent may apply within 14 days for the order to be set aside. The award may not be enforced until the later of the expiry of the 14-day period or the determination of the application for the order to be set aside.

The general approach of the Cayman Islands courts to the recognition and enforcement of arbitration awards (including the standard for refusing enforcement on public policy grounds) is a pro-enforcement one, and Section 7 of the Enforcement Act (giving effect to Article V of the New York Convention) exhaustively prescribes the only grounds on which enforcement may be refused (as stated in Bright Sugar Group Co Ltd and Another v Great Ally Group Limited and Others (unreported, 16 July 2025)).

Cayman Islands law does not provide for class action or group arbitration.

As regards ethical codes and professional standards, counsel and arbitrators who are Cayman attorneys are subject to the Code of Conduct for Cayman Islands Attorneys-at-Law. Arbitrators are required by Section 28 of the Arbitration Act to act fairly and impartially and to allow each party a reasonable opportunity to present their case.

Third-party funding is permissible under Cayman Islands law by virtue of the Private Funding of Legal Services Act 2020. This Act, and the Regulations made in relation to it, contain requirements as to the form and content of litigation funding agreements, and impose limitations in relation to uplift on attorney fees and to contingency fee agreements which involve a percentage of the value of the property recovered in proceedings. These provisions expressly apply to arbitral proceedings.

An arbitral tribunal seated in the Cayman Islands does not have the power to order the consolidation of separate arbitral proceedings or the holding of concurrent hearings, unless the parties agree to confer such power on the tribunal. The parties may agree to the consolidation of proceedings or concurrent hearings (Section 36 Arbitration Act).

Third parties can be bound by an arbitration agreement or award in limited circumstances, as the Arbitration Act (Section 2(1)) defines a “party” to include “any person claiming through or under” a party to an arbitration agreement or to the arbitration proceedings.

Third parties can be granted or acquire rights to enforce a contractual term, for example through assignment or novation, agency or subrogation. In those circumstances, the third party may elect to be treated as a party to an arbitration agreement (Section 11 Contracts (Rights of Third Parties) Act 2014).