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Grand Court confirms existence of jurisdiction to grant a notification injunction in the Cayman Islands

In the recent case of ArcelorMittal v Essar (which we have previously blogged here) the Grand Court for the first time confirmed that the jurisdiction to grant a “notification injunction,” as an alternative to a freezing injunction, is available in the Cayman Islands. This decision is significant because in circumstances where it may be determined that a freezing injunction is too intrusive such that it is not just and convenient to grant such relief, a notification injunction may still be available provided the grounds for a freezing injunction are established.  Large-scale and high value fraud, asset tracing and cross-border litigation occupies a significant portion of the cases before the FSD Judges. 

The Plaintiff relied on the recent English authority of Holyoak v Candy where Lord Justice Gloster confirmed that a notification injunction is a variant to a freezing injunction, and therefore the general test is the same:   

  • The application must establish a good arguable case on the underlying merits.
  • The applicant must establish a real risk, judged objectively, that a future judgment would not be met because of unjustified dissipation of assets.  In ArcelorMittal v Essar Justice Kawaley remarked (without deciding the point) that it appeared to his Lordship that the bar required for demonstrating a risk of asset dissipation ought to be lower for a judgment creditor than a plaintiff.
  • But not every risk of a judgment being unsatisfied will justify freezing order relief.  Solid evidence is required to support a conclusion that the relief is justified, and what that entails will vary in any given case.  For example, the intrusiveness of the relief will be a highly relevant factor when considering the overall justice and convenience of granting the proposed injunction. Accordingly, even if there is solid evidence of a real risk of unjustified dissipation, an applicant should consider what form of relief the court is likely to accept as being just and convenient in all the circumstances.

In the circumstances, Justice Kawaley did not grant a notification injunction as he determined there was at that stage no serious issue to be tried on the merits.  However, the Judge left the door open to revisit these findings in the event that the Plaintiff is able to demonstrate an arguable case to impugn the validity of the deed relied on by the Defendants in support of their argument that there was no arguable case on the merits. The Judge noted that where a judgement debtor displays a steadfast unwillingness to meet its obligations under a binding arbitral award, the Court should be slow to withhold relief essential by way of enforcement, on technical evidential grounds.

Grand Court confirms existence of jurisdiction to grant a notification injunction in the Cayman Islands

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