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BVI Court confirms third party disclosure orders in aid of foreign proceedings

The BVI Court has handed down a judgment in KS v ZZ BVHICM 2020/0016 that explores in some detail the jurisdiction of the BVI High Court to grant Norwich Pharmacal disclosure relief in aid of foreign legal proceedings. Wallbank J had indicated in the 2019 decision in Q v R that the BVI Court would not follow the English Commercial Court decision in Ramilos (see here). However, in his latest judgment Wallbank J adopts different reasoning from that in Q v R and considers numerous authorities from England and other offshore jurisdictions, particularly the Cayman Islands.

In the cases of Omar and Ramilos the English Courts had decided that Norwich Pharmacal relief was not available where the claimant sought information in aid of foreign proceedings because English legislation provided other mechanisms by which evidence could be obtained for use in foreign proceedings and the English Courts considered that English Parliament had intended for these legislative provisions to exclusively govern the circumstances in which disclosure could be ordered.

Justice Wallbank, sitting in the BVI High Court (Commercial Division) had made it clear last year that he would not apply the principles set out in Ramilos despite there being equivalent legislation in the BVI that provides a mechanism for the disclosure of evidence for proceedings abroad. However, until now the BVI Court had not given any formal judgment on the issue and Wallbank J recognised the importance of making the jurisdiction’s position clear on the availability of Norwich Pharmacal relief in support of foreign proceedings.

In his judgment in KS v ZZ, Wallbank J took the view that it was highly unlikely that the BVI House of Assembly had intended that the legislation in the BVI dealing with disclosure of evidence for use in foreign proceedings should restrict the availability of Norwich Pharmacal relief. Wallbank J took into account that Norwich Pharmacal relief was not a remedy of last resort and he found that the availability of such relief in aid of foreign proceedings was “highly desirable in an offshore financial centre such as the BVI”.

When considering the issue of whether the ability to obtain evidence by way of letter of request should displace the ability to grant Norwich Pharmacal orders, Wallbank J identified what he described as a ‘fatal flaw’ with the letter of request process – while the secrecy of Norwich Pharmacal relief assists in preserving assets, letters of request are generally sought on an inter partes and therefore allow unscrupulous defendants to take steps to evade court process whilst the letter of request procedure is completed. For Wallbank J, this demonstrated that Norwich Pharmacal relief may be a more appropriate remedy in certain contexts.

Wallbank J was also satisfied that the BVI Court’s power to grant Norwich Pharmacal relief was underpinned by statute other than that setting out the process for obtaining evidence for foreign proceedings via letters of request. In particular he considered that the BVI Court could derive its power to grant Norwich Pharmacal orders under the same statutory provisions that give the Court the power to grant injunctive relief, including free-standing Black Swan injunctive relief in support of foreign proceedings.

Whilst Wallbank J himself noted at the beginning of the judgment that the Court rarely has the benefit of determining a contested Norwich Pharmacal application, which may give rise to more balanced arguments on these issues, the clarity the judgment provides is very welcome and illustrates that the court remains ready and willing to assist foreign courts in the appropriate circumstances. The decision also demonstrates that the BVI Court is willing to depart from the English Courts when necessary to ensure that the BVI remains viable; safeguarding the tools of offshore litigation like Norwich Pharmacal relief.

BVI Court confirms third party disclosure orders in aid of foreign proceedings

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