British Virgin Islands

Thursday, Apr 15, 2021

VI Gov’t praised for ‘swiftly’ passing ECSC Amendment Act 2020

VI Gov’t praised for ‘swiftly’ passing ECSC Amendment Act 2020

The Government of the Virgin Islands, led by Premier and Minister of Finance, Hon Andrew A. Fahie, has been praised for swiftly drafting and passing the Eastern Caribbean Supreme Court (Virgin Islands) (Amendment) Act, 2020.

The Act came into force from January 7, 2021, and does not have retrospective effect.

VI Gov’t & AG ‘must be commended’- Harneys


According to law firm Harneys, interim relief in support of foreign proceedings is now available by way of statute in the VI, thanks to the Act.

“Parties now have a statutory route to obtain free-standing injunctive relief, appointment of receivers and Norwich Pharmacal disclosure in support of foreign proceedings, whether sought against BVI persons or non-BVI persons. Read our post, Black Swan resurrected, for further insight, Harneys stated in a press release on January 8, 2021.

Harneys’ Head of BVI Litigation, Andrew Thorp, commented: “the government of the Virgin Islands and the Attorney General, Honourable Dawn Smith, must be commended for so swiftly drafting and passing this important legislation that will restore clarity and ensure efficacy in cross border asset tracing and recovery efforts.”


Harneys’ Head of BVI Litigation, Andrew Thorp, said the government of the Virgin Islands and the Attorney General, Honourable Dawn J. Smith, must be commended for so swiftly drafting and passing this important legislation. P

Amendments


The Eastern Caribbean Supreme Court (Virgin Islands) (Amendment) Act, inserts a new section 24A into the Eastern Caribbean Supreme Court (Virgin Islands) Act. It provides a statutory jurisdiction to grant interim relief where proceedings have been or are about to be commenced in a foreign jurisdiction, and allows the court to grant any relief which may be granted in relation to matters within the VI Court’s jurisdiction (including freezing injunctions and receivership appointments). It expressly gives the Court power to grant relief against non-cause of action (or “Chabra”) defendants.

The Act, Harneys noted, also confirms the VI Court’s common law jurisdiction to make disclosure orders (e.g. Norwich Pharmacal/Bankers Trust orders) in support of actual or contemplated foreign proceedings, even where a letter of request might also be available to the applicant as an alternative.

"This confirms that the BVI Court will not be bound by the English decision in Ramilos Trading Limited v Buyanovsky EWHC 3175 (Comm). Although several decisions of the BVI Court had already confirmed that it would not follow Ramilos Trading, this legislative amendment adds further certainty in this important area."


According to Harneys, the speed in which the legislation was drafted, approved and enacted in response to the Convoy Collateral decision is a testament to its importance.

Act 'finally' remedies 'lacuna' in VI legislation


Harneys noted that the Act finally remedies a lacuna in the VI’s legislation, which did not previously provide for the Courts to grant interim remedies in support of proceedings on foot outside the VI.

That lacuna had been filled by the so-called Black Swan jurisdiction, named after the case in which Justice Bannister applied the dissenting judgment of Lord Nicholls in Mercedes Benz AG v Leiduck 1 AC 284, and ruled that the VI Court was not bound by the majority decision in that case.

However, in its May 2020 decision in Broad Idea International Limited v Convoy Collateral Limited No 2 (BVICMAP 2019/0026), the Eastern Caribbean Court of Appeal held (overturning Black Swan) that the VI Court was bound by the majority decision in Mercedes Benz; as a result, it found that there was no common law jurisdiction to grant a free-standing freezing injunction against a respondent which was not a party to substantive proceedings in the VI.

“The Court of Appeal remarked that whilst this was an undesirable outcome for the BVI as an international financial lcentre, the lacuna would need to be remedied by legislation, not by the courts,” the law firm stated.


Interim relief in support of foreign proceedings is now available by way of statute in the Virgin Islands, thanks to the Eastern Caribbean Supreme Court (Virgin Islands) (Amendment) Act, 2020.

‘A welcome reform’


Harneys said the speed in which this legislation has been drafted, approved and enacted in response to the Convoy Collateral decision is a testament to its importance.

“It is a welcome reform which will ensure that the BVI Courts remain able to grant effective relief in support of foreign proceedings in an increasingly globalised economy.”

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