Fraud claims under Cayman Islands law are governed by principles of equity and common law. They generally involve the need to prove deliberate or reckless deception and loss sustained as a result. Civil fraud claims can be framed in various ways and are not confined to a single cause of action.

False Statements

The making of a false statement can give rise to a claim in the tort of deceit when a false representation has been made knowingly (ie, without belief in its truth) or recklessly (as to whether or not it is true), with the intent that the other party will rely on that false representation. The party making the false representation will be liable for loss and damage caused to the other party in reliance on that false representation.

Claims based on misrepresentations that induce a contract can also be brought under the Contracts Act (1996 Revision) without the need to prove fraud, with the added advantage that the burden of proof is reversed in that party who made the representation must prove that they had reasonable grounds to believe that the facts represented were true.

Conspiracy

As fraud often involves people acting together either wrongfully or to achieve wrongful ends, a conspiracy claim may arise that gives rise to liability. Conspiracy is an economic tort. There are two different types of conspiracy: unlawful means conspiracy and lawful means conspiracy. These are addressed in 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts.

Misappropriation/Breach of Fiduciary Duty

Claims for breach of fiduciary duty are common in commercial fraud cases. Someone who is entrusted with looking after another person’s property and with authority to make discretionary decisions on that person’s behalf owes fiduciary duties in respect of that property. In 1998, the relationship was described by the English Court of Appeal in Bristol and West Building Society v Mothew as follows: “A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty... A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal”. The Cayman court agreed with this formulation in Renova Resources Private Equity Ltd v Gilbertson [2009] CILR 268.

Typical relationships in which a fiduciary duty is owed include a trustee (to the beneficiary), a company director (to the company), an attorney (to the client), a partner (to the other partner(s)) and an accountant (to the client). Fiduciary duties may also be owed by one joint venturer to another where one joint venturer has control of the assets of the joint venture. It should be noted that fiduciary duties may be found to exist in contexts other than these normally recognised relationships, though such cases will be exceptional and rare.

Unjust Enrichment

A claim in unjust enrichment arises where a defendant has been enriched at the expense of the claimant in circumstances where the enrichment was unjust, and where no defences arise. “Enrichment” entails receipt of something of value, such as money, shares or the discharge of an obligation. “At the expense of the claimant” means suffering a loss – namely, that the claimant has given up something of value. Factors that are recognised as unjust include mistake, failure of consideration, duress, and undue influence. Failure of consideration is not consideration in the contractual sense, but essentially the failure of a promise to do something in return. The remedy is restitution. Failure of consideration is not consideration in the contractual sense, but essentially the failure of a promise to do something in return. The remedy is restitution.

Fraudulent Disposition

Fraudulent dispositions of property can be set aside under the Fraudulent Dispositions Act, whereby a disposition of property made with intent to defraud and at an undervalue is voidable at the instance of a party to whom an obligation is owed who was thereby prejudiced. The burden is on the transferee to prove that they did not act in bad faith in order to defend such a claim. These claims do not require an insolvency and are not part of the insolvency legislation (unlike in England and Wales, where the equivalent (although differently worded) provision is at Section 423 of the Insolvency Act 1986). 

In the insolvency context, dispositions of a company’s property made at an undervalue with intent to defraud creditors are voidable at the instance of the official liquidator of the company under Section 146 of the Companies Act. The official liquidator has the burden of establishing an intent to defraud. These claims may be brought within six years of the disposition.

Criminal Law

Fraud is a common-law criminal offence under Cayman Islands law. The main elements of the common law offence of fraud are acting dishonestly with an intent to gain or cause loss or to expose another to a risk of loss.

Under Section 235(1) of the Penal Code, dishonestly appropriating property belonging to another with the intention of permanently depriving the other of it amounts to theft. Other offences relevant in fraud cases include false accounting, forgery, securities fraud and money laundering.

The courts have the power to order payment of compensation.

The causes of action available to a principal whose agent has been bribed arise under general principles and not under specific bribery legislation (which is applicable in respect of bribery of public officers). Those causes of action give rise to the following:

• a claim in the tort of bribery for recovery of the amount of the bribe without proof of loss or gain and, if the loss exceeds the amount of the bribe, the basis of the entitlement being a claim in restitution or unjust enrichment, a claim for compensation for the consequential loss suffered by the principal as a result of the bribe; an essential element of a claim in the tort of bribery is a fiduciary duty owed by the party receiving the bribe – Hopcraft v Close Brothers Ltd [2025] UKSC 33;
• a claim for rescission;
• a claim for damages in fraud;
• a claim in constructive trust; or
• a claim for breach of fiduciary duty (as was found by the English court in Suppipat v Narongdej [2023] 7 WLUK 487).

Claims can be made against parties who assist or facilitate fraudulent acts in various ways, primarily conspiracy, knowing assistance, knowing receipt, and unjust enrichment.

Conspiracy

A civil claim in conspiracy enables a claimant to bring claims against a number of defendants who may not have committed any underlying wrongful act, and the claim can bring in parties who have become involved (although they might not be the main wrongdoer). A conspiracy involves two or more parties combining or agreeing to take concerted action that results in damage being caused to the victim of the conspiracy. As noted in 1.1 General Characteristics of Fraud Claims, there are two types of conspiracy (unlawful means conspiracy and lawful means conspiracy); however, in the context of commercial fraud, unlawful means conspiracy is the more common.

Unlawful means conspiracy

This involves two or more parties combining or agreeing with the intent of injuring another party, taking concerted action using unlawful means (carrying out unlawful acts), resulting in damage actually being caused to that party. As the name suggests, the use of unlawful means is an essential ingredient. Both crimes and civil wrongs can constitute unlawful means. Although what amounts to unlawful means is case-specific, examples of unlawful means include:

• inducing or procuring a breach of contract;
• transactions at an undervalue;
• preferences;
• transactions defrauding creditors; and
• contempt of court.

Although intent to injure the victim of the conspiracy is required, it is not necessary for this to be the sole or predominant intention.

Lawful means conspiracy

This involves two or more parties agreeing or combining to do lawful acts with the sole or predominant intent of injuring the victim, resulting in damage being suffered by the victim. The tort of lawful means conspiracy can make two parties liable for an act that would not have given rise to liability if it had only been carried out by one party. One of the difficulties is proving sole or predominant intent to injure; a common defence is for the defendant to claim that they were pursuing their own self-interest.

Dishonest Assistance

Liability for dishonest assistance involves liability on the part of a non-fiduciary for being an accessory to breach of trust by a fiduciary. The elements are:

• a breach of trust or fiduciary duty;
• the defendant procuring, inducing or assisting in the breach; and
• the defendant acting dishonestly in so doing.

The accessory must have not acted as an honest person would, in the circumstances, have acted. In applying this test, it is assumed that an honest person would not participate in a transaction if they know that it involved a misapplication of trust assets (Royal Brunei Airlines Sdn Bh v Tan [1995] 2 AC 378).

Knowing Receipt

Liability for knowing receipt involves a party receiving assets in breach of trust in circumstances where it would be unconscionable for that party to retain those assets. Liability for knowing receipt requires a disposal of assets in breach of a trust or custodial fiduciary duty, the beneficial receipt by the defendant of assets that are traceable as representing the claimant’s assets, and the defendant’s knowledge that the assets received are traceable to a breach of fiduciary duty (El Ajou v Dollar Land Holdings PLC (No 1) [1994] 2 All ER 685).

In a case involving a company that went into liquidation in the Cayman Islands (Saad Investments Company Limited), the UK Supreme Court has held that a claim for knowing receipt will fail where the claimant’s proprietary equitable interest has been extinguished or overridden by the time of the defendant’s knowing receipt of the property in question (Byers v Saudi National Bank [2023] UKSC 51). A claim in knowing receipt is a personal claim, not a proprietary claim.

For most claims by victims of fraud, the limitation period is six years from the date on which the cause of action accrues, which is usually the date when the damage was suffered. Where there has been fraud, deliberate concealment or mistake, the six-year period does not begin to run until the claimant has discovered, or could with reasonable diligence have discovered, the fraud, concealment or mistake. The Cayman court will treat the English authorities as relevant to construction if the Cayman provision is materially identical to the English provision (Primeo Fund v Bank of Bermuda (Cayman) Ltd [2023] UKPC 40).

There is no limitation period for a claim by a beneficiary under a trust in respect of a trustee’s fraud or a trustee’s conversion of property.

A claimant may assert an equitable proprietary claim in respect of any property that they were induced by fraud to transfer, as well as in respect of property representing the converted proceeds of the initially-transferred property (which is identified by the process of tracing). Such a claim may be asserted against the fraudulent party to whom the claimant’s property was transferred. Such a claim may also be asserted against any person who subsequently receives the property (or its traceable proceeds) either:

• with notice of the fraud at the time of receipt; or
• for no consideration (ie, as a volunteer).

However, a proprietary claim will not be available against a party that acquires the property or its traceable proceeds as a purchaser in good faith without notice of the fraud at the time of receipt – such receipt will extinguish the proprietary claim, unless the property is re-acquired by a previous recipient of the property against whom a proprietary claim would have been available. Subsequent acquisition of notice or receipt by an otherwise good-faith purchaser cannot “revive” a proprietary claim against them.

Funds that have been mixed with other funds may be the subject of an equitable proprietary claim – although the rules used to identify traceable proceeds from such mixed funds may vary from case to case (including first-in/first-out, rolling charge, and pari passu distribution bases). However, if property has non-fungible properties that allow it (by adducing appropriate evidence) to be identified with certainty from what would otherwise appear to be a “mixture”, such rules may have no application. This may be the case, for example, for certain types of crypto-assets.

There are no pre-action protocols applicable to fraud claims. Often fraud claims are preceded by an application for a freezing injunction sought without notice to the other party in circumstances where giving such notice would have given that party the opportunity to dissipate assets that would render any order nugatory. However, in the absence of such an application, the overriding object requires parties to help the court to deal with cases in a just, expeditious and economic way and thus pre-action correspondence would be expected. The court has the power to penalise a party for failing to do so in costs.

A victim of fraud can, in appropriate circumstances, obtain a freezing injunction from the Cayman Islands courts to restrain a defendant from disposing of or dealing with assets. This remedy ‒ one of the “nuclear weapons” of civil litigation ‒ provides an effective mechanism for the preservation of assets throughout the duration of the order until judgment can be obtained or enforced.

It is necessary to show a good arguable case that:

• the defendant has assets within or (in the case of a worldwide freezing order) outside the Cayman Islands (although the court will generally exercise greater caution in granting relief in respect of assets overseas unless there is a clear connection with the Cayman Islands);
• a real risk of dissipation of assets that would otherwise be available to meet any judgment that the claimant might obtain; and
• it is just and convenient for the court to make the order.

Where the claimant asserts a proprietary claim to the assets sought to be frozen, there is no requirement to show a risk of dissipation. 

A freezing injunction can be sought in support of foreign proceedings where there are no substantive proceedings in the Cayman Islands (Section 11A of the Grand Court Act, the equivalent power to that provided for in England and Wales by Section 25 of the Civil Jurisdiction and Judgments Act). The Cayman Islands court can also grant a worldwide freezing order. A freezing order operates in personam, but binds third parties, such as banks, who are given notice of the order.

Court fees are on a sliding scale where a claim for a debt or a liquidated sum is made, up to a maximum of KYD15,000 (USD18,000), but where the freezing injunction is sought in respect of foreign proceedings and no substantive claim is made in the Cayman Islands, the fee would be KYD5,000 (USD6,000).

Sanctions for non-compliance include contempt proceedings leading to a possible fine, sequestration of assets, or imprisonment, as well as the appointment of a receiver to police the freezing injunction.

The claimant is also required to give a cross-undertaking in damages. As applications for freezing injunctions are almost always made without notice, the claimant is under a duty of full and frank disclosure or fair presentation, whereby the claimant must disclose all matters that are material to the court in deciding whether to grant the injunction and, if so, on what terms.

An order (a Chabra order) can be made against third parties where they hold assets that are beneficially owned by the main defendant.

The Cayman Islands courts also have the jurisdiction to grant a “notification injunction” as an alternative to a freezing injunction. Where a freezing injunction is intrusive to the extent that it is not just and convenient to grant one, a notification injunction may still be available, provided the grounds for a freezing injunction are established. Once a notification order is made, if the defendant wishes to dispose of an asset, they must first notify the claimant so as to give the claimant the opportunity to seek an order preventing the notified disposition (Arcelormittal USA LLC v Essar Steel Limitedand others – 2 July 2019).

Ancillary to the granting of a freezing injunction, an order is made for the defendant to disclose their assets so as to:

• ensure that the freezing injunction is effective in preserving assets;
• facilitate the policing of the freezing injunction by identifying the nature and extent of the respondent’s interest in assets; and
• allow the claimant to take further steps to prevent asset dissipation (Perry v Lopag Trust and others – FSB 205 of 2017).

The order will normally specify that this includes assets that are not in the defendant’s own name, jointly owned assets, and assets from which the defendant benefits. This is part of the freezing injunction for which a cross-undertaking in damages is required.

The Cayman Islands courts have jurisdiction to make a search (Anton Piller) order (the other “nuclear weapon” in civil litigation). Search orders are a form of injunction that requires a respondent to allow the applicant’s solicitors to enter the respondent’s premises and search for and remove all items covered by the order. The purpose of a search order is usually to preserve evidence or property that is (or may be) the subject of an action or as to which a question arises in an action. These are very intrusive orders and the applicant must show:

• an extremely strong prima facie case;
• very serious actual or potential harm to the claimant;
• clear evidence of potentially incriminating evidence in the respondent’s possession; and
• a real prospect of destruction of such evidence.

Norwich Pharmacal Orders

Disclosure of documents and evidence to identify a proper defendant or obtain information to plead a claim may be obtained from third parties by way of a Norwich Pharmacal Order (NPO). The requirements for an NPO are that:

• a wrong must have been committed, or it is arguable that a wrong has been committed, by an ultimate wrongdoer;
• Norwich Pharmacal relief is necessary to enable a claimant to commence proceedings against the wrongdoer; and
• the third party has been “mixed up” in the wrongdoing.

Bankers Trust Orders

Furthermore, Bankers Trust Orders can be sought against third parties who may possess information on or evidence of financial activities that may aid in the identification, recovery or preservation of property. To obtain such relief, an applicant will need to demonstrate that there are:

• good grounds to argue that the property about which information is sought belonged to the applicant; and
• real prospects that the information sought will lead to the recovery or preservation of the property.

The interests of the applicant and the detriment to the respondents must be balanced in making such an order, which should be directed at identifying the whereabouts of the property.

Restrictions as to Use

In the cases of both Norwich Pharmacal and Bankers Trust relief, applicants will be subject to express and implied undertakings to use the information or evidence for the purposes for which the leave was granted and not to use such information or evidence for any ulterior or collateral purpose. Applicants will be normally required by the court to provide express undertakings as to the use of any documents or information obtained (in addition to undertakings as to costs of compliance and cross-undertakings in damages).

As noted in 2.3 Obtaining Disclosure of Documents and Evidence From Third Parties, applications for freezing injunctions, search orders and NPOs/Bankers Trust Orders can be made without notice. In those circumstances, the applicant is under a duty of full and frank disclosure (as described in 2.3 Obtaining Disclosure of Documents and Evidence From Third Parties).

In the Cayman Islands, victims of fraud increasingly pursue dual-track approaches, seeking redress through both criminal and civil processes. The Financial Crime Investigation Unit of the Royal Cayman Islands Police Service handles fraud investigations, with prosecution conducted by the Office of the Director of Public Prosecutions under relevant legislation including the Penal Code (2014 Revision) and the Proceeds of Crime Act (2025 Revision).

The court has the discretion to stay civil proceedings when criminal matters are ongoing.

The benefits of pursuing criminal redress potentially include:

• compensation orders under Section 33 of the Penal Code;
• access to confiscation proceedings under the Proceeds of Crime Act; and
• lower effort required by the victim (as prosecution is conducted by the State).

However, victims have limited control over criminal proceedings, with decisions on prosecution and case management resting with authorities. Fraud victims who have the funds to do so often prioritise civil remedies.

Judgment in default can be awarded where a defendant does not participate in the proceedings, by not filing an acknowledgement of service or a defence within the prescribed time. Summary judgment can be awarded, without the need for a full trial, where the defendant has no defence to the claim or to the relevant part of the claim, in that the defendant has not shown a fair or reasonable probability that they have a real, or bona fide, defence (Merren v Cayman National Bank [2008] CILR 428).

As a matter of professional conduct, an attorney must not make any allegation of fraud or dishonesty unless they have clear instructions to do so and have satisfied themselves that there is reasonably credible material supporting a prima facie case (Rule 8.04 of the Code of Conduct for Cayman Islands Attorneys-at-Law).

The Cayman Islands courts have recognised that it is permissible for claimants to issue proceedings, and for courts to award injunctive relief, against defendants identified other than by name (“persons unknown”) (Ernst & Young Ltd v Department of Immigration [2015] 1 CILR 151). Pleadings against such “persons unknown” must be made with sufficient particularity that any person to whom any court order (against “persons unknown”) is shown should be able to know whether or not it is descriptive of (and therefore directed to) that person.

Due to the difficulties relating to service of documents to “persons unknown”, claimants will generally need to apply for:

• dispensation of personal service; and
• authorisation of alternative or substituted service by means that could reasonably be expected to notify the persons likely to be affected by the terms of any order.

The Cayman Islands courts have broad powers and wide discretion to provide for substituted service (see 4.2 Service of Proceedings out of the Jurisdiction). Examples of such methods from more recent English authorities (which will have persuasive effect in the Cayman Islands) in the crypto-fraud context are likely to be illustrative for similar cases in the Cayman Islands. In 2022, in the case of D’Aloia v Persons Unknown [2022] EWHC 1723 (Ch), the English High Court authorised service on unknown crypto-fraudsters in the form of non-fungible tokens via Airdrop into the digital wallets into which the claimant had been fraudulently induced into transferring their crypto-assets.

The Cayman Islands courts have the power to issue subpoenas to compel witnesses to give oral evidence in legal proceedings.

Further, where a person (whether or not a party to the proceedings) swears an affidavit in the litigation, the court has the power to order that person to attend the court for cross-examination in respect of their affidavit evidence. In fraud proceedings, it can be important to cross-examine a defendant on their asset disclosure affidavit ‒ for example, where it is incomplete or inaccurate, as part of the policing of the freezing injunction. However, the court does not have power to compel a witness who is not within the Cayman Islands to attend for cross-examination (In The Matter of a Company [2025] CIGC (FSB) 13).

The Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters has been extended to the Cayman Islands by the UK. In respect of witnesses who are outside the Cayman Islands, the Cayman Islands courts will grant letters of request for information and testimony, and likewise will receive letters of request and make orders for a witness in the Cayman Islands to be examined in relation to proceedings in another convention state.

In the Cayman Islands, the attribution of an individual’s knowledge to a corporate entity follows English common law principles ‒ primarily, the “identification doctrine” articulated in Meridian Global Funds Management Asia Ltd v Securities Commission (1995) 2 AC 500 and Bilta (UK) Ltd v Nazir (2015) UKSC 23.

Under this approach, a corporate entity can be liable for fraud when:

• the fraudulent acts or knowledge are attributable to individuals who represent the company’s “directing mind and will” – typically, directors, senior officers, or those with authority to bind the company;
• the individual was acting within the scope of their authority; and
• the acts were performed in the course of corporate business.

The Cayman Islands courts have confirmed this approach (Primeo Fund (in Official Liquidation) v Bank of Bermuda (Cayman) Ltd [2023] UKPC 40 and HSBC Securities Services (Luxembourg) SA [2017] 2 CILR 334). An important limitation applies through the “fraud on the company” exception recognised in In re Hampshire Land Co [1896] 2 Ch 743. Where a director or officer perpetrates fraud against the company itself, their knowledge is not attributed to the company.

For financial services companies operating in the Cayman Islands, the Anti-Money Laundering Regulations (2025 Revision) impose additional requirements designed to prevent fraud, with potential corporate liability for regulatory breaches even without direct board knowledge, if proper systems were not established.

Direct claims against ultimate beneficial owners (UBOs) are possible in Cayman Islands courts by piercing or lifting the corporate veil in limited circumstances. Cayman Islands courts have confirmed in Algosaibi v Saad [2018] 3 CILR 1 that they will take the same approach as in Prest v Petrodel Resources in the UK Supreme Court ‒ namely, where the corporate structure is a mere “façade” concealing true facts, the company is being used as a device to evade legal obligations or frustrate legal remedies, and there is evidence of impropriety beyond the fact that the company was used for wrongdoing.

The Cayman Islands Court of Appeal noted in Walkers v Arnage Holdings Ltd [2021] 1 CILR 347 that a decision to lift the corporate veil is one that involves an intense scrutiny of the facts and that the exceptional circumstances that permit disregard of the separate legal personality of a corporation are highly sensitive to the facts of the particular case. 

Alternative ways of seeking remedies against UBOs include claims on the basis that:

• the UBO acted as a shadow director of the company ‒ ie, was a person whose directions or instructions the directors of the company were accustomed to acting in accordance with (Section 89 of the Companies Act);
• the UBO was involved in an unlawful means conspiracy;
• the UBO was liable in knowing receipt or dishonest assistance or for restitution (as described in 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts).

The Cayman Islands allows shareholders to bring derivative claims on behalf of companies against fraudulent directors, subject to obtaining permission from the court to continue the claim once a defendant has given notice of intention to defend.

The Cayman Islands court confirmed in Renova Resources Private Equity Ltd v Gilbertson (see 1.1 General Characteristics of Fraud Claims) that shareholders may bring claims under the “fraud on the minority” exception to the rule in Foss v Harbottle. The court in Renova agreed with the principle stated in Gower’s Modern Company Law that where such an action is allowed, the shareholder is not really suing on their own behalf nor on behalf of the members generally, but on behalf of the company itself.

For shareholders pursuing such claims, the Cayman Islands court may order interim relief, including injunctions restraining directors’ actions or appointing receivers over company assets pending resolution.

As a leading international financial centre, fraud proceedings in the Cayman Islands almost invariably involve seeking relief against parties from other jurisdictions, and the ability to join overseas parties is a long-established and vital part of Cayman Islands law and practice. The Cayman Islands courts may grant leave to serve proceedings on parties outside the Cayman Islands where the court is satisfied that:

• there is a serious issue to be tried against the relevant defendants;
• there is a good arguable case that the claim falls within at least one of the jurisdictional gateways set out in Order 11, rule 1 of the Grand Court Rules; and
• the Cayman Islands is clearly or distinctly the appropriate forum where the case can be tried in the interests of all parties and for the ends of justice and the court ought to exercise its discretion to permit service of the proceedings out of the jurisdiction (see, for example, the helpful summary of these principles in MYF Maximus Limited v DNB Bank ASA and others – 3 June 2024).

The jurisdictional gateways typically relevant to fraud cases include:

• a claim for an injunction ordering the defendant to do or not to do acts within the Cayman Islands;
• a claim to which the defendant is a necessary or proper party where another party has been or will be served within or outside the Cayman Islands; and
• a claim for tort, fraud or breach of duty where the damage was sustained or resulted from an act committed in the Cayman Islands.

The defendant against whom leave to serve out of the jurisdiction has been granted can challenge the granting of leave and may challenge the jurisdiction of the Cayman Islands courts on the grounds of forum non conveniens ‒ namely, that the Cayman Islands is an inappropriate forum.

The application is made supported by an affidavit setting out (among other things) the grounds of the application and the belief that the claimant has a good cause of action. The affidavit should also explain why the case is a proper one for service out of the jurisdiction. The application is usually made without notice to the defendants, and accordingly the applicant is under a duty of full and frank disclosure and fair presentation.

As service can be difficult, slow and cumbersome to serve in some jurisdictions, an order can be sought for substituted service where it is impracticable for any reason for personal service to be effected. Substituted service is service by other means ‒ for example, by service on a lawyer or agent, by post, or by electronic means (see 2.8 Claims Against “Unknown” Fraudsters relating to service in the crypto context). However, the steps to effect service must not be contrary to the law of the country in which they are to be taken. Delay of itself is unlikely to be a sufficient reason for an order for substituted service. However, significant delay coupled with prejudice to the efficient progress of the litigation can be incompatible with the due administration and hence satisfy the impracticality test (Maples FS Limited v B&B Protector Services, PJSC National Bank Trust and PJSC Oktritie Financial Corporation [2022] 2 CILR 59).

If a defendant fails to comply with an order or judgment, then enforcement steps can be taken by the claimant. In fraud cases, methods of enforcement include the following.

• A charging order – this is an order where a charge is created over the debtor’s property, leading to a right to realise the charged property. A charging order over company shares is particularly effective in the Cayman Islands.
• Appointment of a receiver ‒ the court may appoint a receiver over a debtor’s assets by way of equitable execution where it appears to the court just and convenient to do so.
• A post-judgment freezing order ‒ a freezing order can be made after judgment, preventing the defendant from dissipating assets pending enforcement.
• Contempt proceedings ‒ depending on the nature of the order, contempt proceedings may be commenced against the defendant, which may result in the defendant being imprisoned, fined and/or having their assets sequestrated.
• A garnishee order ‒ this is an order requiring a party who owes money to the defendant to pay it to the claimant instead.
• Winding-up or bankruptcy proceedings ‒ proceedings can be issued to wind up a corporate debtor or for the bankruptcy of an individual debtor.

Foreign judgments are (save in the case of Australian judgments) enforced by way of common-law enforcement. This involves issuing proceedings in the Cayman Islands based on the foreign judgment. The foreign judgment must be final and conclusive. A foreign judgment that is subject to appeal in the foreign country may still be final and conclusive.

Traditionally, a foreign judgment could only be enforced if it was for a debt as described in 5.1 Methods of Enforcement; however, this area of law changed significantly following the case of Bandone v Sol Properties [2008] CILR 301, where the Cayman Islands court enforced a foreign court’s order for specific performance of a contract for the transfer of shares by ordering rectification of the company’s Register of Members. The court case confirmed that the direct enforcement of foreign judgments should no longer be confined to those for a debt or specific sum of money; non-money judgments may now be recognised and enforced by way of equitable remedies.

A defendant may seek to challenge the authority of or basis for the foreign judgment on the following limited grounds:

• the foreign judgment was obtained by fraud, either on the part of the court or the opposing party;
• the foreign court was not competent to pronounce the judgment, because it lacked jurisdiction over the person against whom it was pronounced;
• the foreign judgment was obtained in proceedings contrary to natural justice or where the defendant’s rights were grossly violated;
• the foreign judgment is of a type that cannot be enforced in the Cayman Islands (eg, a tax or other similar charge or a fine or other penalty); or
• it would be contrary to public policy to recognise or enforce the foreign judgment ‒ for example, where the foreign law is repugnant to Cayman Islands law.

Once service is effected, the defendant is required to file an acknowledgement of service and a defence within the prescribed time limits. In enforcement cases, the defence will generally be limited to the defences set out above. In the absence of filing such an acknowledgement of service or defence, the claimant may apply for default judgment. If the defendant does file a defence, the claimant may nevertheless apply for summary judgment on the grounds that the defence raised is spurious and that there is no real triable defence to the action. It would be very unusual for the matter to go to full trial in the absence of exceptional circumstances, as the merits of the underlying case will generally not be re-examined by the Cayman Islands court.

Privilege against self-incrimination is a statutory right in the Cayman Islands (Section 55 of the Evidence Act) where answering a question or producing a document would tend to expose that person to a criminal offence. Thus, a defendant to a civil fraud claim may invoke the privilege against self-incrimination but only to that extent. Exposure to civil liability would not give rise to that right.

Legal professional privilege in the Cayman Islands comprises two types of privilege:

• legal advice privilege – covering confidential communications between lawyers and clients for the purpose of giving or receiving legal advice; and
• litigation privilege ‒ covering communications created for the dominant purpose of litigation.

Both of these are subject to the “fraud exception” or “iniquity exception”, which prevents their application where communications are made in furtherance of fraud or other criminal purposes.

Practically, challenging privilege on fraud grounds typically involves an application for disclosure, with the court often conducting an in camera review of documents to determine if the exception applies. The threshold is high, requiring more than mere allegations, but once established, all related communications lose protection.

Damages in Cayman Islands law are compensatory ‒ namely, to compensate the claimant for the losses they have suffered, rather than to punish the defendant. Punitive or exemplary damages will be “sparingly granted”, but may be available, for example, to confiscate profit where a party has deliberately committed a tort with guilty knowledge such that it would pay them to take a risk of the consequences (Origami Partners III LLP v Pursuit Capital Partners (Cayman) Ltd [2021] 2 CILR 191).

The Cayman Islands maintains a robust but evolving framework of financial confidentiality laws, balancing privacy protection with transparency requirements for legitimate investigations. The primary legislation governing banking secrecy is the Confidential Information Disclosure Act 2016 (CIDA).

Under the CIDA, the disclosure of confidential information without consent is prohibited, with criminal penalties for violations. However, the CIDA contains significant exceptions that facilitate evidence gathering in fraud claims, including that the court may order disclosure of confidential banking information when relevant to proceedings, and explicitly permission for disclosure pursuant to statutory provisions, including the Mutual Legal Assistance (United States of America) Act and the Proceeds of Crime Act.

The Cayman Islands courts are well practised at granting orders in respect of crypto-assets. Although the question as to whether crypto-assets amount to property has not yet been decided by the Cayman Islands courts, decisions of the English courts that crypto-assets may be treated as property are likely to be persuasive ‒ see, for example, AA v Persons Unknown [2020] 4 WLR 35 and D’Aloia v Persons Unknown [2025] 1 WLR 821 (in which the English High Court accepted that Bitcoin and USD Tether, respectively, constituted property in English law).

The Cayman Islands courts grant NPOs in crypto-fraud claims ‒ for example, against crypto-exchanges that are subject to Cayman Islands jurisdiction ‒ to identify the owners of wallet addresses, to identify assets, and to provide KYC information, and also grant freezing injunctions.