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Submission to the jurisdiction and Nilon- the Privy Council’s view

The Board of the Privy Council handed down its judgment on 17 August 2017 in Chen v Ng [2017] UKPC 27, an appeal from the Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands) as to the beneficial ownership of shares in a BVI company. 

The BVI company was a nominal defendant to the proceedings.

While a number of interesting issues were considered, the focus of this piece is the Board’s decision on the Appellant’s application that the BVI court did not have jurisdiction to determine a claim against the BVI company to rectify its register of members. She based her argument on the Board’s earlier decision in Nilon Ltd v Royal Westminster Investments SA [2015] UKPC 2 (Nilon) that under BVI legislation “proceedings for rectification can only be brought where the applicant has a right to registration by virtue of a valid transfer of legal title, and not merely a prospective claim against the company dependant on the conversion of an equitable right to a legal title by an order for specific performance of a contract”. 

Interestingly, the Appellant had not raised the issue of jurisdiction at first instance. It was only upon the publication of the Nilon decision, which came after the hearing before the Court of Appeal in this claim, that the Appellant decided to raise it. 

The Board found that the facts of this case set it apart from Nilon in that the Appellant had in fact successfully applied to be joined to the proceedings voluntarily and unconditionally, and she did so on the basis that the real issue was not between the company and the Claimant, but rather between her and the Claimant as to the beneficial ownership of the shares. As she effectively invoked the jurisdiction of the BVI court, she could not subsequently challenge it.

 

Submission to the jurisdiction and Nilon- the Privy Council’s view

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