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Articles

Legal analysis by Harneys lawyers

Incredible Power - leave requirements in a derivative action BVI BCA 2004

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Publication Date:
30 September 2016



Harneys recently acted for the successful claimant on an application for her costs of a discontinued strike out application which was brought by the defendants as part of an ongoing multi-jurisdictional family dispute. The claimant’s substantive action in the BVI involved derivative proceedings which she had brought on behalf of a company that was domiciled in Liberia, for the recovery of funds which she alleged had been wrongfully paid to another entity. In considering that application, the BVI Commercial Court gave clear guidance on whether the provisions of section 184C of the BVI Business Companies Act 2004 (the BCA) will apply in respect of companies incorporated out of the jurisdiction.
 
In finding for the claimant, the Honourable Sir Bernard Eder QC agreed and held that it was plain that the section 184C requirement to obtain leave relates only to derivative claims on behalf of a company incorporated under the provisions of the BCA, namely a company incorporated in the BVI.
 
This decision is a welcome clarification of the operation of section 184C. It also makes the jurisdiction a more attractive forum in which to bring derivative claims on behalf of foreign companies, since any prospective claimant will be able to commence those proceedings without needing to undergo the additional step of obtaining leave from the BVI Court beforehand.
 

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