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Heads I win, tails you lose: traps for the unwary under the BVI Arbitration Act 2013

In Hector Finance Group Limited v Caldicott Worldwide Limited (BVIHCVAP 2020/0012), the EC Court of Appeal declined to consider the merits of an appeal from the grant of an injunction pursuant to the Arbitration Act on the basis that it had no jurisdiction to do so.

The appeal arose from the continuation of an injunction order made by Justice Wallbank against the company in relation to arbitral proceedings following a successful stay of court proceedings in favour of arbitration by the company. The relevant order stated that "the Respondent be restrained by a freezing order in the form set out in Schedule 1 hereto until after the trial of the Claim or further order of the Court". Additionally, in the judgment, Justice Wallbank stated that the injunction should be continued, or in the alternative, a fresh injunction granted in identical terms under section 43 of the Arbitration Act…”. Although it is clear that an injunction was granted, it was not clear whether Justice Wallbank continued the injunction under section 24 of the Eastern Caribbean Supreme Court (Virgin Islands) Act (Supreme Court Act) or granted a fresh injunction under section 43 of the Arbitration Act. The significance of the distinction was that if the injunction was granted under the former there is a right of appeal to the Court of Appeal, however, under the latter, there is no right of appeal.

Section 43 of the Arbitration Act allows a Court to grant interim measures, such as injunctions, in relation to any arbitral proceedings which have been or are to be commenced in or outside the BVI. Critically, an order granting an injunction under section 43 is not subject to appeal. In assessing whether the injunction was continued under the Supreme Court Act or granted under the Arbitration Act, the Court of Appeal considered that the wording of the order did not support the continuation of an injunction previously granted under the Supreme Court Act but rather it was more consistent with the Court granting a fresh injunction under the Arbitration Act. The Court of Appeal also considered that, unlike the 1996 UK Arbitration Act, the BVI Arbitration Act gave a BVI judge making an injunction order under section 43 wider powers to grant an injunction which was not limited in duration under the effective constitution of the arbitration tribunal. Ultimately, the Court of Appeal held that the injunction was granted pursuant to the Arbitration Act and not the Supreme Court Act and accordingly, there was no right of appeal.

The case is a stark reminder of the need for clarity as to the basis of orders sought and granted and of the Court’s limited supervisory role in relation to arbitration under the BVI Arbitration Act 2013.

Heads I win, tails you lose: traps for the unwary under the BVI Arbitration Act 2013