The Receiver represents arguably the most powerful weapon in the armoury available for asset tracing into the BVI. As BVI companies are often utilised as holding vehicles, utilising a receiver to take control of the corporate structure and move “downstream” to the assets is a particularly potent strategy. Recent movements in case law have made this remedy more widely available.
The Court may appoint a receiver where it is just and convenient to do so. Typically, such an application is made where it can be shown that assets are in jeopardy and the appointment is necessary on an interim basis to secure and protect the relevant assets. As explained in JSC BTA Bank v Ablyazov  Bus LR D119, “If, therefore, a freezing does not, of itself, provide adequate protection to a claimant because there is a measurable risk that a defendant may use the structure by which he holds his assets to deal with those assets in breach of a freezing order, then a receivership order will normally be justified”. The receiver therefore “holds the ring” and preserves the assets pending trial.
Seeking the appointment of a receiver has also become increasingly attractive, as the Court has shown more willingness to appoint receivers in a variety of situations. A creditor may, for example, seek the appointment of a receiver in aid of executable execution of a judgment. Receivers can also be appointed in cases where there is a claim for misappropriation of assets, bribes, joint ventures and competing businesses. Receivers may be appointed over shares, LLP interests, bank accounts, contractual rights, rights reserved under a trust or beneficiary entitlement.
With careful drafting, an applicant can ensure that an order appointing a receiver also vests power for the disputed asset to rest with the receiver. The advantage, notably in the BVI, of having shares vested in the receiver is the ability for those to be voted and for the corporate structure to be controlled. That way, assets beyond the BVI can often be accessed and secured without the additional and often alien concept of receiver recognition.
Receiver in aid of execution of a judgment
A receiver can be appointed to aid with equitable execution of a judgment. This tool becomes very helpful where the debtor holds assets through a number of corporate entities. The applicant needs to satisfy the Court that the usual methods of enforcement are insufficient. It is clear from case law that the Court views the remedy of appointing a receiver as a flexible one. This is advantageous to creditors. In a recent case, for example, the Court permitted the appointment of a receiver over a settlor’s power of revocation of a trust. By so doing, the receiver was able to exercise the powers of the settlor over the trust. It is helpful, therefore, that the Court will consider the overriding demands of justice. Where there is a risk of dissipation, it is possible to front-load the appointment to allow the receiver to protect the value of the assets (including those further down the corporate structure) pending execution.
The concept of a receiver having an investigative function is recognised in common law jurisdictions, such as Canada, and it is believed the BVI Courts may be receptive to such an appointment. From the case law available, the Court will need evidence that the creditor’s rights of recovery are in serious jeopardy. The receiver’s function would be to investigate the affairs of the debtor or to review transactions which may include the affairs and transactions of non-parties. A receiver appointed for investigative purposes is likely to have limitations on his power to seize or freeze assets.