Episode Description
In the recent decision of Taiping Trustees Limited v Valley
Stone Industry Fund Ltd, the Cayman Islands Grand Court provided a
timely reminder that public policy factors should not be taken into
account when determining the appropriate forum for a dispute.
The Court recognised that its primary task is to identify the forum
in which the case can be suitably tried for the interests of all
parties and for the ends of justice. The ânaturalâ or
appropriate forum is that which the case has the most real and
substantial connection. In doing so, the Court must consider and
weigh up the connecting factors (or, the Spiliada principles) to
determine where the balance lies.
One argument raised was whether it would be appropriate for policy
reasons for all disputes relating to fiduciaries of Cayman Islands
investment vehicles to be determined in the Cayman Islands.
In considering the principles applicable to forum non conveniens,
Justice Doyle reviewed a number of earlier decisions where public
policy factors had been canvassed; and concluded that it was bound
by the Court of Appealâs judgment in Brasil Telecom SA v
Opportunity Fund where Motley JA held that â[t]o take account
of the public policy considerationsâwouldâbe another
way of placing additional weight to the factor that jurisdiction to
institute proceeding in the Cayman Islands has been founded
as of right, because the respondent is incorporated and is
domiciled in the Cayman Islands.
To do so would make more onerous the burden on the
respondentâ [and give] undue weight to one factorâ Such
public policy considerations cannot co-exist, in this case, with
the interest of the parties and the ends of justice, or fall within
the Spiliada principles.â
While Justice Doyle noted that the Court of Appeal or the Judicial
Committee of the Privy Council might revisit this issue in the
future, he held that his decision to grant the Plaintiff leave to
serve the Defendants out of jurisdiction could not be based on
public policy grounds. As matters stand at present, public policy
factors should not be taken into account by the Court when
determining the question of where the natural forum is
located.
Justice Doyle held that Hong Kong, in whose favour the connecting
factors in this case were âoverwhelmingâ, is the
appropriate forum. The Grand Court stayed the proceedings against
the Cayman Islands Defendant, discharged the ex parte service out
order against the overseas Defendants and declared that the Cayman
Islands court has no jurisdiction over the overseas Defendants in
respect of this claim.
Harneys acted for the successful Defendants in this
application.
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