Suning v Carrefour: Guidance on Service of Arbitral Enforcement Orders

In a Nutshell

The Cayman Islands Court of Appeal (“CICA”) has clarified the circumstances in which the Cayman courts will order service in a manner which departs from that envisaged under the Hague Convention for service of proceedings to enforce a foreign arbitral award².

Decision

The Grand Court (the “Court”) granted Carrefour an ex parte order giving it leave to enforce an arbitral award against Suning in the Cayman Islands, directing that service be effected on Suning by delivering the court documents (including the ex parte order) to Suning’s arbitration counsel in Hong Kong. Suning applied to the Court to set aside the order on various grounds. The main ground was that the order had not been validly served because the method of service authorised by the Court was irregular and not in accordance with the Hague Convention. The Court dismissed Suning’s application but granted leave to appeal on the basis that this issue was a matter of public importance.

The Approach to Service

GCR Order 73, rule 31(6) provides that an order giving leave to enforce an arbitral award may be served personally, by sending to the respondent’s usual or last known place of residence or business, or “in such other manner as the Court may direct, including electronically”. The CICA considered that the wording of rule 31(6) confers a wide discretion on the Court.

As for the exercise of that discretion, the CICA confirmed that the provisions of the Hague Convention (where applicable) must be considered. This raises a question of when a court can order service in a manner which departs from that envisaged under the Hague Convention. To answer that question, the CICA adopted the approach of the English Commercial Court in M v N³.

M v N establishes that, where the Hague Convention is applicable, the court must be satisfied that there is ‘good reason’ to depart from Hague Convention service channels before ordering an alternative method of service. However, if the destination state has made an objection under Article 10 of the Hague Convention, a further requirement is imposed: the court will only order an alternative method of service in ‘exceptional’ or ‘special’ circumstances. At paragraph 16 of his judgment in M v N, Foxton J⁴ identified various factors that have been held sufficient to satisfy the ‘exceptional’ or ‘special’ circumstances requirement, including the need for speedy finality in the case of the enforcement of an arbitration award, and the fact that the respondent had engaged fully in the arbitration process giving rise to the award.

The CICA recognised it would be contrary to the public interest if enforcement of arbitral awards were to become slow and protracted because of a requirement to effect service through Hague Convention channels. Accordingly, the CICA indicated the Cayman courts will readily order alternative service where it is appropriate to do so: “if an application contains all the necessary information and if the matter is then considered by the court in the light of the specific facts of the case, I see no reason why, as set out in M v N, the court should not… ‘usually’ or ‘routinely’ decide that good reason or exceptional circumstances, as the case may be, are made out so as to justify an order for service other than through the relevant Central Authority”.

The Required Evidence

In light of the above considerations, the CICA made clear that any application seeking an order for service which departs from the Hague Convention service channels must be supported by appropriate evidence addressing the following issues:

• the practicalities of effecting service on the relevant party in accordance with the Hague Convention, including the expected timeframe for, and reliability of, the relevant service channel(s);
• any urgency regarding service, and which of the factors described by Foxton J at paragraph 16 of his judgment in M v N are in play;
• whether the destination country has made an Article 10 objection (to confirm whether ‘exceptional’ or ‘special’ circumstances are required); and
• the reasons why alternative service is appropriate in the circumstances.

Decision

The CICA dismissed Suning’s appeal and held that while the first instance judge (and the CICA) had not been provided with the necessary information to properly apply the Hague Convention considerations above (such as how long service via the Central Authority would take), this was to be treated as an irregularity under GCR Order 2, rule 1 that did not require setting aside the Order. The CICA noted that these were unusual circumstances where the appropriate procedure to be followed in relation to GCR Order 73, rule 31(6) had not previously been clarified until the CICA’s present judgment.

Key Takeaways

This case is a helpful statement of the relevant procedure. The guidance in relation to evidence should be closely followed: the CICA noted that having now clarified the proper approach, failure to follow it in future cases “is likely to result in any service being treated as ineffective”.

The case also emphasises the pragmatic and pro-enforcement approach of the Cayman Islands to service in arbitration enforcement proceedings, and the Cayman courts’ readiness to depart from the Hague Convention service channels where appropriate. This will be welcome news to award creditors seeking to take enforcement action in the Cayman Islands.

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¹ [2025] CICA (Civ) 11.
² The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the “Hague Convention”).
³ [2021] EWHC 360 (Comm).
⁴ As he then was.