Enforcement of Foreign Judgments

Stuarts Litigation and Dispute Resolution team advises on all aspects of the procedure for recognising and enforcing a foreign judgment in the Cayman Islands. In addition, our team also has considerable experience advising parties seeking to resist enforcement of a foreign judgment.

Legal Framework

The Cayman Islands regime for enforcing foreign judgments is well established.

Although the Cayman Islands has passed the Foreign Judgments Reciprocal Enforcement Act (1996 Revision), at present, this Act only applies to Australian money judgements¹.

All other judgments from foreign countries are recognisable and enforceable in the Cayman Islands subject to the common law.

Common Law Criteria for Enforcement

Foreign judgments are readily enforceable at common law where they satisfy the following conditions.

1. Final and Conclusive Judgment

The judgement must be final and conclusive on the merits in the originating court. A judgment is not final if it is subject to appeal or if the issuing court retains jurisdiction to revisit it².

The burden of proving that a foreign judgement is final rests on the Plaintiff / Applicant. A foreign judgement will be treated as final and conclusive if it is recognised as such in its own jurisdiction and all domestic appeal procedures have been exhausted. A default judgment may be enforceable as a final and conclusive judgment even though it is liable to be set aside in the foreign jurisdiction. The approach that has been adopted is that, until steps are taken to set the judgment aside, the foreign judgment is enforceable as a final and conclusive judgment³.

2. Personal Jurisdiction

The foreign court must have had jurisdiction over the defendant according to Cayman Islands conflict of laws rules⁴. The Cayman Islands court must be satisfied that the judgment debtor was either:

• Present in the foreign jurisdiction at the time proceedings were served;
• Participated as a plaintiff or counter-claimant;
• Voluntarily submitted to the jurisdiction as a defendant⁵; or
• Contractually agreed to submit to the court’s jurisdiction.

This is based on the principles of Common Law set out by the English Court of Appeal in Adams v Cape Industries plc [1991] Ch 433 (CA)⁶.

3. Judgment for a Fixed or Ascertainable Sum

Only judgments for a definite sum of money are enforceable. The Grand Court will not enforce judgements for unpaid foreign taxes, fines or in respect of enforcing the public laws of a foreign country (i.e. those laws that involve the exercise or assertion of a sovereign right). In certain circumstances, non-monetary orders could be recognised and enforced by way of equitable remedies, such as specific performance where the principles of comity require enforcement⁷.

This requirement, in turn, raises some interesting questions regarding the enforcement of a foreign judgement that is expressed in cryptocurrency, such as Bitcoin.

4. No Contravention of Public Policy

A foreign judgment will not be enforced if enforcement would contravene Cayman Islands public policy⁸.

5. Breach of Natural Justice

As a matter of common law, foreign judgments can be impeached in circumstances where:

• The judgment was obtained by fraud;
• The foreign court was not a court of competent jurisdiction; or
• The judgment arose in circumstances contrary to natural justice.

A foreign judgment will be impeachable for fraud on the basis of newly discovered material facts that were not before the foreign court⁹. The issue to be determined is whether there was an irregularity in the proceedings in the obtaining of the judgement rather than the substantive matters determined in the foreign judgement itself. Mistakes of fact and / or law in the foreign judgement may give rise to a right of appeal in the jurisdiction where the judgment was obtained but may not of themselves be a reason to resist recognition and enforcement in the Cayman Islands¹⁰. For reasons of practicality, the Cayman Islands courts proceed on the basis that proper procedure has been followed unless the contrary is established by way of evidence.

“Contrary to natural justice” has been defined as “When applied to foreign judgments it relates merely to alleged irregularities in the procedure adopted by the adjudicating court, and has nothing to do with the merits of the case¹¹.

Procedure

Initiating Proceedings

The judgment creditor must initiate fresh proceedings in the Cayman Islands Grand Court by issuing a writ of summons. This must be served on the judgment debtor. If the judgment debtor is outside jurisdiction, permission for service out must be obtained¹².

Summary Judgement

If the foreign judgement satisfies the common law criteria, the claimant may seek summary judgement under GCR Order 14. The burden shifts to the defendant to show a bona fide triable issue¹³.

Conclusion

Although the Cayman Islands does not offer automatic enforcement of foreign judgments, it provides a structured and predictable common law route. Enforcement is generally straightforward for judgments where proper procedure has been followed and the judgement has a proper jurisdictional grounding.

As a related point, in the Cayman Islands Grand Court decision in Guoan International Limited [2021] (2) CILR 625, the Court confirmed that a judgment creditor can rely on a foreign judgment as the basis for seeking a winding up order against the judgment debtor company without first applying for the judgment to be recognised.