Offshore Litigation

Blog

Offshore Litigation

Contributors

Jonathan Addo
Jonathan Addo
  • Jonathan Addo

  • Partner
  • British Virgin Islands
Jeremy Child
Jeremy Child
  • Jeremy Child

  • Partner
  • London
Julie Engwirda
Julie Engwirda
  • Julie Engwirda

  • Partner
  • Hong Kong
Peter Ferrer
Peter Ferrer
  • Peter Ferrer

  • Partner
  • British Virgin Islands
Claire Goldstein
Claire Goldstein
  • Claire Goldstein

  • Partner
  • British Virgin Islands
Hazel-Ann Hannaway
Hazel-Ann Hannaway
  • Hazel-Ann Hannaway

  • Partner
  • British Virgin Islands
Nick Hoffman
Nick Hoffman
  • Nick Hoffman

  • Partner
  • Cayman Islands
Andrew Johnstone
Andrew Johnstone
  • Andrew Johnstone

  • Partner
  • Hong Kong
Paula Kay
Paula Kay
  • Paula Kay

  • Partner
  • Hong Kong
Phillip Kite
Phillip Kite
  • Phillip Kite

  • Partner
  • British Virgin Islands
Vicky Lord
Vicky Lord
  • Vicky Lord

  • Partner
  • Shanghai
Paul Madden
Paul Madden
  • Paul Madden

  • Partner
  • Cayman Islands
Henry Mander
Henry Mander
  • Henry Mander

  • Partner
  • Cayman Islands
Ian Mann
Ian Mann
  • Ian Mann

  • Partner
  • Hong Kong
William Peake
William Peake
  • William Peake

  • Partner
  • London
Lorinda Peasland
Lorinda Peasland
  • Lorinda Peasland

  • Consultant
  • Hong Kong
Chai Ridgers
Chai Ridgers
  • Chai Ridgers

  • Partner
  • Hong Kong
Nicola Roberts
Nicola Roberts
  • Nicola Roberts

  • Partner
  • Hong Kong
  • Singapore
Paul Smith
Paul Smith
  • Paul Smith

  • Partner
  • Cayman Islands
Andrew Thorp
Andrew Thorp
  • Andrew Thorp

  • Partner
  • British Virgin Islands
Jessica Williams
Jessica Williams
  • Jessica Williams

  • Partner
  • Cayman Islands
Jayson Wood
Jayson Wood
  • Jayson Wood

  • Partner
  • Cayman Islands

BVI Court appoints receiver under Arbitration Act to preserve assets pending arbitration award

Grant Thornton were appointed as receivers over a BVI company under Section 43 of the Arbitration Act 2013 to preserve the value of the company pending the determination of foreign arbitration proceedings. The defendant in the arbitration owned the shares of the BVI Company.

Section 43 of the Arbitration Act 2013 provides that the Court may grant an interim measure in respect of any arbitration proceedings that have been or are to be commenced in or outside the BVI. Section 33(2)(c) defines interim measure as any temporary measure by which, at any time prior to the issuance of the award, the tribunal orders a party to provide a means of preserving assets out of which a subsequent award may be satisfied.

This is a powerful tool in the judgment creditor’s arsenal and demonstrates the pro-arbitration approach taken by the BVI courts to preserve the value of assets pending the outcome of foreign arbitration proceedings.

The creditor needed to show a real risk of a significant loss in value if a receiver was not appointed immediately to oversee the underlying business and take active steps to preserve its value. Justice Kaye was convinced and appointed receivers over the shares of the BVI defendant company on an interim basis for the purpose of preserving its value (including its subsidiary and its assets).

The order provided that the receivers were able to exercise all the powers, authorities and things which they would be capable of exercising (including without limitation voting rights) if, and as if, they were the absolute beneficial owners of the shares. In practice this allowed the receivers to change the directors of the subsidiaries, change legal representation and borrow funds (with the Court’s sanction) to ensure that the business remained a going concern and a valuable asset against which the subsequent award could be enforced.

This illustrates the effectiveness of the interim relief provisions in the Arbitration Act to preserve assets against which an arbitration award will be enforced. This is a useful tool for parties to bear in mind when commencing arbitration if they will ultimately be seeking to enforce against the debtor’s shares in a BVI company.  Section 33 is clear that interim measures are available prior to issuance of the award. This is a reminder to parties to seek advice on enforcement and options for preserving assets while the arbitration is ongoing rather than waiting until they have an award, by which time the horse may have bolted.

BVI Court appoints receiver under Arbitration Act to preserve assets pending arbitration award

Leave A Comment