Pursuant to section 91 of the BVI Business Companies Act, Revised Edition 2020 (BCA), a company shall at all times have a registered agent, except if it is in liquidation.

Section 218A(1) of the BCA provides that:

As such, the practice has been to engage a registered agent for the company, for the purpose of seeking the restoration which is immediately followed by the insolvent liquidation.

Unfortunately, as happened to the Claimant in AS PNB Banka (in liquidation) v Registrar of Corporate Affairs, the engagement of a registered agent is often difficult for creditors because creditors will invariably not have all the KYC documents and information that registered agents are statutorily required to obtain. No registered agents were willing to act for the Claimant , leading the Claimant to apply to the Court for restoration without the appointment of a registered agent.

Upon considering the parties’ arguments, Justice Mangatal accepted the Claimant’s submission that a creditor’s ability to exercise its rights to seek restoration cannot depend upon the “discretionary commercial risk appetite of private licensed entities”. She also noted that the appointment of a registered agent would cause delay and incur unnecessary costs, especially since section 91 of the BCA clearly states that no registered agent is required for a company in liquidation, being what the dissolved company will immediately enter into upon restoration.

Justice Mangatal considered what the Claimant was seeking as a “single composite judicial act”: restoration of the dissolved company and the appointment of liquidators. The company therefore never exists in a state requiring a registered agent pursuant to the BCA, and hence no registered agent need be appointed for applications of this nature.

Conversely, the two-stage approach creates a "circular barrier to enforcement": restoration is required to appoint liquidators, yet the appointment of a registered agent, which may itself depend upon cooperation from those whose conduct may warrant investigation, would become an indispensable threshold condition. Restoration would become impossible "precisely in those cases where corporate management has disappeared or is unwilling to cooperate – circumstances which most strongly justify investigation through insolvency proceedings".

Importantly, the judge was satisfied that the Claimant’s construction does not dilute the AML objectives underpinning section 218A of the BCA. In the insolvency context, regulatory and investigative oversight is provided by court-appointed liquidators operating under the supervision of the court and within the statutory framework of the Insolvency Act, rather than by a registered agent.

In permitting the Claimant’s composite solution, the judge interpreted the permissive language in section 218A of the BCA as providing a guide for the exercise of judicial discretion rather than an inflexible jurisdictional precondition incapable of contextual interpretation.

While Justice Mangatal considered leave to appeal unnecessary, she nonetheless granted leave to the Registrar of Corporate affairs on the basis "it concerns important issues that are likely to arise again, and the point is not free from difficulty”. For now, this judgment removes a very common obstacle to the exercise of creditor rights and is a positive development in this area of law.