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Further developments in Black Swan relief

17 July 2013

Harneys successfully acted for an individual seeking free standing relief in aid of foreign proceedings brought in Cyprus. The Cyprus proceedings were a derivative claim brought by the claimant in the name of a Cypriot company. Relief sought included a declaration that the relevant BVI company held property on trust for the Cypriot company and a judgment against the BVI company and others for US$3million. The Cypriot courts granted the applicant interim injunctive relief restraining the BVI company from dealing with the relevant property.

On the application to the BVI Court for “mirror” relief, the applicant successfully argued that the Black Swan jurisdiction applies to prevent non-cause of action defendants from disposing of identified assets – as long as those assets might be available to satisfy a future judgment of a foreign court, in proceedings in which the owner, or arguable owner, of the assets is a defendant.

The BVI Court held that in the circumstances it was just and convenient to make an order restraining the BVI company from giving effect to any dealing that might be attempted in breach of the Cyprus injunction.

Previously, the BVI Court had granted a Black Swan freezing injunction in support of a foreign claim in which part of the relief abroad was sought derivatively. Harneys acted for the successful BVI applicant. This is believed to have been the first example in the BVI of the Black Swan jurisdiction being used to support a foreign derivative action.