The enforcement toolkit available in the BVI is similar to many other common law jurisdictions. However, the BVI Courts have tailored their approach to meet the challenges a creditor may face when looking to enforce over a complex structure.
While it has its own legal system, the BVI is a British Overseas Territory. It is therefore heavily influenced by judicial decisions made in England and Wales - widely recognised as one of the fairest jurisdictions in the world. Parties also have the added benefit of being able to appeal to the Privy Council, where Supreme Court judges regularly hear appeals from the BVI.
We set out below a high level overview of the areas in which we regularly assist our clients.
Enforcement of foreign judgments
Subject to certain criteria being met, BVI Courts are able to recognise many foreign Judgments and have strong legal frameworks in place in this regard. Drawing from both common law and statute, the Courts offer well tested and flexible procedures that are adaptable to global developments.
Norwich Pharmacal Orders (NPOs)
In the BVI it is not compulsory to make publically available all company records, such as minutes of meetings and the decisions behind the minutes. However, they are kept by a “registered agent” located on the island. Sometimes companies do make these records available and for a small fee we can check the record. Alternatively, if there has been wrongdoing, the BVI Courts have a powerful weapon in being able to compel the registered agents (and other entities such as banks and internet service providers) to release information to your client identifying wrongdoers, proving wrongdoing or identifying assets for enforcement. NPOs can be accompanied by “seal and gag” orders meaning that if successful, the registered agent cannot tell its client that such an order has been made.
Where there is a risk that assets or proceeds may be dissipated, BVI Courts are frequently used to grant freezing injunctions. These are a powerful tool to prevent any steps being taken to dissipate assets pending the outcome of the wider proceedings (even if those proceedings are in other jurisdictions). The requirements to obtain a freezing injunction are similar to other common law jurisdictions but are flexible so as to recognise the way assets are held in offshore jurisdictions.
Generally speaking, a freezing injunction cannot be granted where no other relief is sought within a jurisdiction. That is to say, a party seeking an injunction must have some form of underlying course of action within that jurisdiction. However, the BVI Courts recognise that for the purposes of enforcement, freestanding injunctions are important weapons in the hands of litigants.
Interestingly, the legal position in the BVI is due to be examined by the Privy Council in early 2021 who will consider an appeal made against a freestanding or “Black Swan” injunction.
Methods of enforcement
BVI Courts have powers to grant charging orders over shares, property or other assets belonging to a debtor (to include beneficially ownership). If successful a charge will be imposed on a judgment debtor’s assets. If the debt remains unsatisfied, further steps can be taken to enforce a sale of the charged asset to satisfy a Judgment or other award.
Creditors can make an application to the BVI Courts for monies to be paid directly to them which are held by a third party. This method of enforcement is commonly used to take possession of funds held in a debtor’s bank account.
Appointment of a receiver
One of the most powerful weapons in the BVI enforcement toolkit is the appointment of a receiver. Given offshore companies are often used as holding vehicles, receivership allows a receiver to take control of a corporate structure and move “downstream” to recover assets. In simple terms, a receiver can stand in the Judgment debtor’s shoes to gather in and realise property. This has the added advantage of immediately preventing a judgment debtor from dealing with that property.