{"id":8763,"date":"2024-05-29T13:42:07","date_gmt":"2024-05-29T18:42:07","guid":{"rendered":"https:\/\/www.campbellslegal.com\/?p=8763"},"modified":"2024-05-29T13:42:07","modified_gmt":"2024-05-29T18:42:07","slug":"arbitration-rising-four-recent-judgments-of-the-cayman-courts","status":"publish","type":"post","link":"https:\/\/www.campbellslegal.com\/client-advisory\/arbitration-rising-four-recent-judgments-of-the-cayman-courts-8763\/","title":{"rendered":"Arbitration rising: Four recent judgments of the Cayman Courts"},"content":{"rendered":"

\u00a0<\/strong>The Cayman Islands courts have recently delivered four judgments concerning the law and practice of international arbitration, which is a growing feature of the offshore legal landscape.<\/p>\n

First, in Minsheng Vocational Education Company v Leed Education Holding Limited & Others<\/em><\/strong>[1]<\/strong><\/em><\/a>, the Cayman Islands Court of Appeal (\u201cCICA<\/strong>\u201d) upheld the first instance decision by Segal J to grant an injunction pursuant to section 54 of the Arbitration Act 2012 (the \u201cAct<\/strong>\u201d) in support of foreign arbitral proceedings.<\/p>\n

The factual background involved disputes over complex corporate lending and security interests, including a contested put option for the sale and purchase of shares in Leed International Education Group Inc. (a Cayman Islands company) and related share charges in favour of the Appellant.<\/p>\n

These disputes gave rise to separate arbitral proceedings in Hong Kong and, later, in Beijing.\u00a0 Whereas the Hong Kong arbitration concerned matters including the put option, the Beijing arbitration concerned rights and obligations under the loan agreements. The Beijing arbitration was conducted under the rules of the China International Economic and Trade Commission (\u201cCIETAC<\/strong>\u201d), as stipulated by the relevant loan agreements, whereas the share charges contained a non-exclusive jurisdiction clause in favour of the courts of the Cayman Islands.<\/p>\n

At first instance, Segal J granted an injunction to restrain the Appellant from enforcing the share charges pending the outcome of the Beijing arbitration. The jurisdictional basis for the injunction was Section 54 of the Act, which provides that:<\/p>\n

\u201c(1) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their seat of arbitration is in the Islands, as it has in relation to the proceedings in court.<\/em><\/p>\n

(2) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The court shall exercise those powers in accordance with its own procedures and in consideration of the specific principles of international arbitration.\u201d<\/em><\/p>\n

In the exercise of his discretion, Segal J had applied the well-established American Cyanamid <\/em>principles. The order was made by Segal J before the tribunal in the Beijing arbitration was fully constituted, and evidence had been adduced by the Respondents to the effect that no such protective measures could, in any case, be granted by the tribunal in the Beijing arbitration. Segal J took account of those factors in his order, by requiring the Respondents to apply to the tribunal in the Beijing arbitration within five business days of its constitution for permission to continue to rely upon the interim injunctive remedies. The Respondents duly applied to the Beijing tribunal for such permission, however a decision upon that application remained pending.<\/p>\n

On appeal to the CICA, the Appellant advanced four grounds of appeal against the first instance decision. For the reasons given in the leading judgment delivered by the Hon. Sir Anthony Smellie KC, the CICA unanimously dismissed the appeal and upheld the judgment of Segal J.<\/p>\n

The first ground of appeal<\/strong> was that the Respondents were required to seek relief in either the Hong Kong or Beijing arbitrations, or from the supervisory courts at the seat of the arbitrations. In rejecting this argument, Smellie J.A. summarised the legal position as follows:[2]<\/a><\/p>\n