Cayman Islands In Landmark Legal Decision

by Amanda Banks, Tax-News.com, London

17 May 2011

A Cayman Islands court has reached a ground-breaking decision assuming the power to grant asset-freezing injunctions over Cayman assets in support of certain foreign legal proceedings.

The Grand Court of the Cayman Islands has made the decision to grant a free standing Mareva injunction, so-called in reference to a 1975 UK case, "Mareva Compania Naviera S.A. v International Bulk Carriers S.A.".

According to the offshore legal firm Ogier, members of which acted for the successful applicant of the injunction, an injunction of this type permits a court to prevent a defendant from transferring assets until the outcome of the law suit is decided, in order to ensure that the defendant’s assets are not dissipated as a means of avoiding a satisfactory judgement.

In this instance, Ogier notes, the Court has held that it has power to grant asset-freezing injunctions over Cayman assets in support of foreign proceedings, where the only relief claimed in the Cayman Islands Court is the asset-freezing injunction itself, and there is no other cause of action against the defendant within the jurisdiction of the Cayman Islands courts, other than the freezing order relief sought.

Commenting on the decision, Ogier Cayman Partner and Head of Litigation Chris Russell, said that: "This case follows a modernising trend, which is to be greatly welcomed, and is a significant contribution to cross-border co-operation and protection".

Recommended