The dispute concerned three Bahamian family trusts – the Winter, Spring and Summer Trusts (the Trusts) – which were settled for the benefit of the Volpi family by Gabriele Volpi, an Italian-Nigerian businessman with substantial interests in logistics, ports and energy. Mr Volpi’s children, Matteo, Simone and Isabella, were discretionary beneficiaries.

In 2016 the corporate trustee, Delanson Services Ltd (Delanson), distributed the entire assets of the Trusts to Garbriele Volpi. Matteo Volpi challenged those distributions, claiming they were made in breach of trust and contrary to Delanson’s duties to the wider family. Matteo alleged that his father had directed or authorised the payments and that Delanson had simply followed his wishes. The trust instruments contained exclusive arbitration clauses, therefore the dispute was referred to arbitration seated in The Bahamas.

A three-member arbitration tribunal was appointed, comprising Lord Neuberger of Abbotsbury, Dr Georg von Segesser and Professor Alberto Malatesta (the Tribunal). The proceedings were divided into two phases, dealing with liability and quantum.

In June 2020 the Tribunal issued a Phase I partial award finding that the distributions were in breach of trust and that Gabriele had known this when he received them. Court challenges to that award by Gabriele and Delanson were dismissed, and Phase II (quantum and valuation) was listed for a hearing in October 2025.

Days before that hearing, Gabriele began fresh court proceedings seeking to remove the Tribunal under section 35 of the Bahamian Arbitration Act 2009 (the Removal Claim) based on allegations that several procedural decisions showed bias or unfairness. He also asked the Supreme Court to stay the arbitration until that removal claim could be determined.

Matteo opposed the stay, arguing that the removal claim was weak and that any further delay would cause serious prejudice, as the arbitration had already been running for seven years. Delanson, Simone and Isabella supported the stay.

The question for Chief Justice Winder was whether to exercise the Court’s discretion to stay the arbitration while the Removal Claim was pending. The question was therefore whether the Removal Claim had sufficient merit to justify a stay and where the balance of prejudice lay between the parties.

Following a review of the Court’s powers under section 16(3) of the Supreme Court Act and rule 26.1(2)(q) of the Civil Procedure Rules, alongside section 45(1) of the Arbitration Act, which confirms that procedural and evidential matters are for the Tribunal, Winder CJ refused the stay. In doing so, Winder CJ also noted that Article 17(1) of the UNCITRAL Rules requires the Tribunal to treat the parties equally and to avoid unnecessary delay or expense.

Winder CJ accepted that stays of this kind are exceptional. Drawing on guidance from Justice Klein in an earlier judgment between the same parties, Delanson Services Ltd v Volpi & ors, he held that a stay depends on the balance of harm, the prospects of the underlying challenge and the broader policy of arbitration proceeding without interruption.

After reviewing the alleged procedural missteps, including the Tribunal’s refusal to recuse itself after viewing a document said to be privileged, the Court found that the Tribunal’s reasoning was detailed and fair. The recusal decision (Procedural Order No 26) showed that the contested document was irrelevant to quantum, and that exposure to such material did not indicate bias.

In arriving at his decision, Winder CJ noted that the arbitration had already “been delayed some four years as a result of stays pending challenges and appeals by Gabriele and Delanson” and commented that while "both Gabriele and Matteo can each demonstrate prejudice or harm […] The issue which tips the scale in Matteo's favor […] is that [the Removal Claim] does not appear to have particularly strong prospects of success” as there was no evidence of actual or apparent bias.

1. Exceptional relief and apparent bias

There are similarities between the Cayman and Bahamian legislative frameworks. Under section 29 of the Cayman Islands Arbitration Act 2012 (the Cayman Arbitration Act), the parties may agree the rules to be followed by a tribunal, failing which the tribunal may conduct the arbitration in such manner as it considers appropriate. A tribunal also has broad powers relating to evidential matters. In similar terms to section 35(3) of the Bahamian Arbitration Act, sections 20(3) of the Cayman Arbitration Act confirms that a tribunal may continue arbitration proceedings and make an award whilst an application to the court for the removal of a tribunal member is pending.

Under section 9(2) of the Cayman Arbitration Act, the Grand Court of the Cayman Islands will stay court proceedings brought where an agreement provides for arbitration, unless the agreement is invalid. However, a stay of the arbitration itself is different, and the Grand Court of the Cayman Islands has no power to do so when faced with an application for the removal of tribunal members, even when there is a risk of apparent bias on the part of tribunal members.

2. Tribunal independence

Section 28 of the Cayman Arbitration Act, mirrors Article 17 of the UNCITRAL Rules. Tribunals must act fairly and impartially, allow each party a reasonable opportunity to present its case and avoid unnecessary delay or expense. The Grand Court respects that autonomy within an international framework, and where interim measures are sought from the Court, it must consider the “specific principles of international arbitration” in accordance with section 54 of the Cayman Arbitration Act.

3. Delay and cost

The Court gave weight to the procedural history in Volpi, including that the arbitration had already been delayed by four years of litigation. This caused a practical difficulty in rescheduling a complex international hearing. Cayman tribunals face similar realities, albeit the risk of delay by parties seeking a stay of arbitration proceedings is somewhat diminished as the Court has no power to intervene in this way.

4. Guidance for Cayman practitioners

• Understand tribunal autonomy: In contrast to the Bahamian position, the Cayman court does not have an express power to stay an arbitration simply because a challenge to an arbitrator is pending. This places procedural control squarely with the arbitrators, not the court.
• Challenge does not mean pause: A pending application to remove or challenge an arbitrator does not automatically halt the proceedings in Cayman. Unless and until the tribunal elects to suspend the process, parties should assume that hearings and procedural steps may proceed. Parties should therefore maintain full engagement with the arbitration timetable and be ready to continue even while a tribunal challenge is pending.
• Minimal curial intervention: The guiding statutory principle is one of minimal judicial intervention. The Grand Court will only intervene in the arbitral process where expressly permitted by the Act, and its powers to do so align with supporting the arbitration process; for example, the Court may appoint or remove arbitrators, grant interim relief only if the tribunal lacks power or is unable to act effectively or by enforcing or setting aside arbitral awards.
• Comparative seat analysis required: Practitioners handling cross-border arbitrations should be alert to the important difference from other jurisdictions such as The Bahamas, where the court may intervene to stay an arbitration. In Cayman, intervention is not currently available unless it is within the narrow confines allowed by the Cayman Arbitration Act.

The decision in Volpi  reinforces a principle well recognised in both The Bahamas and the Cayman Islands: courts are reluctant to interfere with the arbitral process unless a serious injustice is shown. Weak claims of bias or unfairness will not justify stopping an arbitration that is otherwise ready to proceed. In the Cayman Islands, the position is strict: the tribunal controls the continuation of proceedings during a challenge, and the Grand Court has no power to stay the arbitration in those circumstances.

For Cayman counsel and parties to arbitration, the practical lesson is simple. When a tribunal-removal claim is launched, the safer assumption is that the arbitration may continue, and the best course is to prepare for the hearing rather than wait for the tribunal to order a stay of its own proceedings.