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03 May 2019
The BVI Court of Appeal recently denied the appellant in Emmerson International Corp v Starlex declaratory relief and upheld the respondents' relief from sanction, as granted by the lower court.
In underlying proceedings, the respondents, having been validly served with an ancillary claim, failed to file an acknowledgement of service or defence within the requisite timeframe due to a breakdown in communication between the companies' agents in Belize and their officers in London and Moscow. In short, the appellant sought declaratory relief to the effect that the respondents had admitted its claim in full while the respondents sought relief from such sanction on the basis that their failures had been due to an inadvertent breakdown in communication.
For relief from sanctions to be granted, all of the preconditions outlined in Eastern Caribbean Civil Procedure Rule 26.8(2) must be satisfied and the applicant must show that:
Failing to satisfy any of these three pre-conditions would be fatal to such an application.
The Court of Appeal considered each of the constituent parts of Rule 26.82(2) in turn and agreed with the lower court that, in this case, these thresholds had been met. The bases for this decision were as follows:
While this judgment will inevitably provide some comfort to those that find themselves facing sanctions having inadvertently failed to comply with a rule, practice direction or order, it is a timely reminder for everyone that it is better to remain vigilant and compliant than to rely on the court's jurisdiction to grant relief from sanction.
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