Reformers ask for input on new arbitration laws
(CNS): The Law Reform Commission is asking for public comment and contribution regarding its review of Cayman’s Arbitration Laws. The review has been prompted by the fact that the financial services industry does not generate any international arbitration business which is actually conducted in the Cayman Islands. Although the majority of civil work concerning the financial services industry is dealt with satisfactorily in the Grand Court, considered an advantage for the judiciary, the Legal department believes that the outmoded Arbitration Law is a deterrent to securing more arbitration business.
The goal of the review is to introduce proposals for the reform of a legislative regime which could drive business to Cayman. According to the review document (available on the GIS website) arbitration is a mechanism of binding dispute resolution which is the equivalent of litigation in the courts. At the same time however, it is distinct from the various forms of non-binding dispute resolution techniques, such as negotiation or mediation. An arbitration may be classed as international if the parties to the arbitration are domiciled in different countries and the dispute originated in a foreign state or the subject matter of the dispute involves a state other than the state in which the parties are nationals. The critical aspect of arbitration is that it is based on an agreement between parties to conduct proceedings outside of the publicity and formality of the courts.
Among the potential advantages that may emerge from engaging in arbitration proceedings are the flexibility of the arbitration procedure, privacy of arbitration proceedings, opportunity to determine choice of arbitrator, finality of arbitration proceedings, opportunity to identify a neutral forum to conduct the proceedings, efficiency in the conduct of the proceedings and cost effectiveness.
Arbitration matters are dealt with in the Cayman Islands under the Foreign Arbitral Enforcement Law (1997 Revision), the Arbitration Law (2001 Revision) and the Grand Court Rules 1995 (Revised Edition) Orders 56 and 73. However, there is wide spread support for its repeal and replacing it with a new law substantially based upon the UNCITRAL Model Law, which would apply to both domestic and international arbitrations.
The Law reform commission has also suggested the elimination of administrative obstacles by changes to the immigration law regarding temporary work permits to facilitate the free movement of arbitrators, parties, witnesses and advocates.
“If Cayman sees value in transforming itself into an effective international arbitration venue, it must further enhance its own legislative strengths which would be considered by parties upon choosing Cayman as their seat of international arbitration. The main strength is provision of the appropriate legislative framework which offers the legal safeguards to protect the arbitration system. We believe that these safeguards are rooted in the UNCITRAL Model Law,” the commission writes.
Members of the public are invited to submit their comments on any aspect of the Discussion Paper.
Category: Business
