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Legal symphony: Courts and arbitration in perfect harmony

16 Apr 2024

The recent decision of the Cayman Islands Court of Appeal (CICA) in Minsheng Vocational Education Company Limited (Minsheng) v Leed Education Holding Limited (the Education Group) serves as a pertinent reminder of the Cayman Islands' commitment to upholding arbitration agreements and facilitating the arbitral process. The judgments of both the Grand Court and CICA highlight the jurisdiction's supportive stance towards arbitration and reinforces the enforceability of interim arbitration measures in Cayman Islands law, consistent with the principles of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (the Model Law).


Minsheng is a Cayman Islands company, listed on the Hong Kong Stock Exchange. The Education Group consists of three investment holding companies incorporated in the British Virgin Islands, which hold various investments in education-related projects in the Peoples Republic of China (PRC).

Minsheng, as purchaser, and the Education Group as seller, entered into a sale and purchase agreement for shares (the SPA) in Leed International Education Group Inc, (LIEG) a Cayman company. The SPA was governed by Hong Kong law and contained a Hong Kong International Arbitration Centre (HKIAC) arbitration clause. In order to facilitate the sale of shares, Minsheng and the Education Group, along with other affiliates, entered into various loan agreements which were governed by PRC law and subject to a China International Economic and Trade Arbitration Commission (CIETAC) arbitration clause. After the transfer of the first tranche of shares (51 per cent of the LIEG shares), a dispute arose between the parties in respect of the remaining shares, triggering the initiation of arbitrations in both the HKIAC (in respect of the SPA) and CIETAC (in respect of the loan agreements).

Minsheng had enforcement rights under a series of share charges granted by the Education Group over the remaining 49 per cent of the shares in LIEG (the Share Charges), which if the Education Group was successful in the arbitrations would be discharged. The Education Group was concerned that before the outcome of the arbitration would be determined, Minsheng would seek to enforce the Share Charges and sell the LIEG shares to a third party, putting the shares beyond the Education Group’s reach should it be successful in the arbitration. To prevent this, the Education Group sought an interim injunction from the Grand Court.

The Grand Court decision

The Grand Court granted the interim injunction restraining Minsheng from exercising the Share Charges until the CIETAC arbitration had concluded (the Injunction). The Injunction was granted subject to two conditions: first, that it was confirmed that CIETAC was unable to grant the injunction sought; and second, that permission was obtained from CIETAC to continue to rely on the Injunction in accordance with the applicable arbitration rules.

The Injunction in this case was regarded as “not an ordinary injunction”  but one needed as a matter of urgency to preserve assets and protect the integrity of the pending arbitration. Justice Segal in the Grand Court considered, on the balance, “the risk of grave and irreparable harm” would result if the injunction was not granted (and the shares were sold), which outweighed the risk of any prejudice to the restrained party.

The appeal

Minsheng appealed and sought to have the Injunction discharged on the following four grounds:

  • the Education Group was obliged to first seek relief in either of the foreign arbitrations from the supervisory courts at the seat of the arbitrations;
  • the Injunction was unavailable because of the competing jurisdiction cause in the share charge calling for judicial resolution;
  • no preservation of property order could (properly) be made in the case; and
  • there can be no injunction to restrain enforcement of security.

All four grounds of appeal were dismissed. Taking a closer look at first ground of appeal, the CICA helpfully sets out a useful summary of principles outlining the framework and considerations involved in international arbitration, as summarised below.

Principles of international arbitration in the context of interim remedies

  • Open textured jurisdiction: The international arbitration jurisdiction, as per Article 17J of the Model Law, is flexible and not specifically categorised. It allows for the issuance of interim measures to support arbitrations in other jurisdictions, adapting to modern arbitration needs.

In the Cayman Islands, section 54 of the Arbitration Act (which mirrors Article 17J) expressly allows the Courts to act in aid of foreign proceedings. It provides:

“(1) A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their seat is in the Islands, as it has in relation to the proceedings in court.

(2) The court shall exercise those powers in accordance with its own procedures and in consideration of the specific principles of international arbitration”.

  • Exercise of ancillary powers with caution: The powers granted must be exercised cautiously, understanding their ancillary nature. The principle of limited court intervention, as established by the Act and recognised in international arbitration, emphasises that courts should not readily interfere with arbitral proceedings. Interim measures should only be sought to assist arbitration and not bypass the arbitral tribunal's authority.
  • No mandatory prior application requirement: There is not a strict requirement for parties first to seek interim measures from the arbitral tribunal or the court at the arbitration's seat before applying under section 54.
  • Exercise of powers in appropriate circumstances: Even if access to the arbitral tribunal or the courts at the seat of arbitration is available, section 54 powers may be exercised under certain conditions, like urgency or when the tribunal or foreign court lacks authority to grant necessary interim measures.
  • Connection requirement: Interim measures sought under section 54 must have a sufficient connection to the foreign arbitration they aim to assist.
  • International enforcement as justification for foreign court application: Seeking relief from a foreign court may be justified if international enforcement is needed, especially if the court sits where assets are located, facilitating enforcement without additional procedural hurdles.
  • Refusal of orders against third parties: Orders against third parties in arbitral proceedings are likely to be refused if the tribunal is properly constituted, and the application has not been brought before it or has been rejected. The Cayman Court exercises discretion in such matters.
  • Emergency arbitrator versus court application: Parties may choose between applying to an emergency arbitrator or the court for interim measures, unless emergency arbitration rules mandate otherwise. This decision is based on circumstances and preferences regarding the timing of relief before the tribunal is constituted.


These principles demonstrate how the arbitration process and the courts co-exist by each having distinct but complementary powers. While arbitration provides a forum for dispute resolution, the courts uphold and enforce arbitration agreements and awards, ensuring coherence and compliance with legal principles.

The Grand Court and CICA judgments are significant as the first interpretation of statutory rules governing the granting of injunctions in support of foreign arbitrations. These rulings offer valuable insights into the fundamental principles guiding court involvement in the support of foreign arbitration proceedings.