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International Law

: International Asset Recovery Law Blog

Use of Foreign Depositions in the Cayman Islands

By Rick Rein

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In the United States, 11 U.S.C. Section 1782 allows litigants in non-US proceedings to apply for permission to obtain evidence for use in foreign proceedings. The litigant must establish it is an "interested person" in the foreign proceeding.

In Phoenix Meridian Equity Limited v. Lyxor Asset Management S.A., (CICA 4 of 2009, 24 September 2009), the plaintiff sought Section 1782 depositions in New York of two officers of a U.S. company affiliated to the defendant. The defendant sought to enjoin the depositions on the basis that those officers had provided witness statements in the Cayman action and would be giving oral evidence at trial. Defendants argued that the depositions would subject the witnesses to unwarranted double cross-examination, that the trial would be an unwarranted duplication and that the topics were too broad and intrusive.

The Grand Court recognized that when a party avails itself of a legitimate foreign proceeding, there must be a compelling reason for preventing it from doing so. The court found that Cayman law should not consider the risk of double cross-examination of a future trial witness as per se abuse of process. The court permitted the depositions, but ordered that they could not be used at trial without leave of court.

The practical effect of the ruling is that it may be easier to obtain depositions of witnesses in foreign proceedings using the procedures of those jurisdictions  than under Cayman law, provided use of those foreign depositions will not constitute oppressive or abusive conduct.

Full post as published by International Asset Recovery Law Blog on January 05, 2011 (boomark / email).

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