Back to Basics- Disputes Series

Statutory Assistance – Designated Jurisdictions

• The ability of a foreign officeholder such as a receiver, liquidator or bankruptcy trustee to obtain recognition of his appointment together with assistance from the courts in the British Virgin Islands is largely determined by (i) the nature of their appointment in the foreign jurisdiction[1], and (ii) whether they were appointed in proceedings of a “relevant foreign country”.
• The BVI Financial Services Commission has designated the jurisdictions that are a “relevant foreign country” [2] for the purposes of Part XIX ​of the Insolvency Act 2003 (Orders in Aid of Foreign Proceedings).
• Foreign officeholders appointed in the context of collective insolvency proceedings in a designated relevant foreign country, can apply for wide-ranging assistance from the BVI Court under Part XIX of the Insolvency Act for orders in aid of the foreign proceedings, including:

o    orders for delivery up to the officeholder of the assets of the debtor;

o    anti-suit injunctions to restrain proceedings against the debtor or his property;

o    appointment of interim receivers over BVI assets of the debtor;

o    examination orders; and

o    orders restraining the exercise or enforcement of any right or remedy over the debtor’s property.

• The Court has a wide discretion to order such other relief as it deems appropriate.
• Foreign officeholders will only have standing to apply for assistance under Part XIX of the Insolvency Act where they are appointed in foreign proceedings pursuant to a law relating to insolvency: section 466 the Insolvency Act.  This excludes other officeholders, for example a receiver appointed under Proceeds of Criminal Conduct legislation seeking to deal with BVI assets. Different considerations apply to such officeholders.

Common Law Recognition – Non-Designated Jurisdictions

• Where an officeholder is not appointed in a relevant foreign country, the officeholder cannot obtain assistance from the BVI Court under the statutory regime: Net International Property Limited v Adv. Eitan Erez (BVIHCMAP2010/0010). They may, however, apply under common law for recognition of their status as a foreign insolvency officeholder in the BVI but such recognition does not amount to entitlement to seek orders for assistance under Part XIX. Accordingly, assistance at common law is not available in the BVI.

Other Practical Routes to Assistance​​

• Foreign officeholders from non-designated countries who do not have standing to apply for assistance under Part XIX will need to explore other routes.  Such options may include letters of request pursuant to the provisions of the Evidence (Proceedings in Foreign Jurisdictions) Act or the instigation of parallel insolvency proceedings in the BVI with the appointment of an overseas practitioner alongside a BVI Insolvency Practitioner.
• The BVI Court is a signatory to the Judicial Insolvency Network guidelines, which provide a ‘best practice’ approach ​​aimed at assisting co-operation between parties and communication between Judges supervising cross-border insolvency proceedings.

[1] The statutory and common law position outlined relates only to foreign officeholders appointed in the context of insolvency.
[2] Australia, Bahamas, Barbados, Belize, Bermuda, Canada, Cayman Islands, Finland, Guernsey, Guyana, Hong Kong, Ireland, Isle of Man, Jamaica, Japan, Jersey, New Zealand, Nigeria, Singapore, Trinidad and Tobago, Turks and Caicos, United Kingdom, USA, and Member States and Territories of the Organisation of the Eastern Caribbean States (i.e., Anguilla, Antigua and Barbuda, Dominica, Grenada, Guadeloupe, Martinique, Montserrat, St Kitts and Nevis, St Lucia and St Vincent and the Grenadines).