Black Swan: Stand-alone injunctions in support of foreign proceedings

The BVI court has jurisdiction to grant “stand-alone” injunctions in support of foreign proceedings. These are “stand-alone” in the sense that an injunction order can be made where no other substantive relief is sought within the jurisdiction.

This approach was first taken in 2009 in Black Swan Investment ISA v Harvest View Limited BVIHC (Com) 2009/399, and subsequently approved by the Court of Appeal in Yukos CIS Investments Limited v Yukos Hydrocarbons Investments Limited HCVAP 2010/028. It was developed further in Osetinskaya v Usilett Properties Inc BVIHC (Com) 2013/0037 (25 July 2013), and more recently guidance has been given earlier this year in Bascuñan and others v Elsca and others BVIHC 2015/0128 (3 February 2016) and PT Ventures SGPS SA v Tokeyna Management Limited BVIHC (Com) 2015/0134 (4 March 2016). 

The Black Swan Order is a very helpful tool in support of proceedings where an applicant/claimant has instigated, or intends to instigate proceedings, in a foreign jurisdiction. Notwithstanding that the BVI does not have any local legislation equivalent to section 25 of the UK Civil Jurisdiction and Judgments Act, the Black Swan principles entitle the BVI Court to act in aid of foreign proceedings where it can be shown that there is property situated in the BVI which belongs to the defendant to the foreign proceedings, and which may be enforced against in the event that those foreign proceedings are successful. In such circumstances, the BVI Court may use its territorial jurisdiction over the defendant/ respondent in order to preserve them pending the outcome of the foreign proceedings. 

For relief to be granted, the BVI court must have in personam jurisdiction over the assets or property which is sought to be frozen. In this regard, in Osetinskaya v Usilett Properties Inc the Court confirmed that shares in a BVI company represent assets for the purpose of a Black Swan freezing order. The court must be satisfied that it is necessary in the circumstances; and that the relief sought in the main proceedings before the foreign court will lead to a judgment which will be enforceable in the BVI.

The Black Swan jurisdiction is an invaluable tool in asset tracing as it provides a means of opening up a new front to freeze assets without the need to bring a claim for substantive relief.