BVI courts have jurisdiction to grant standalone injunctions (or Black Swan orders) in support of foreign proceedings. These are 'standalone' in the sense that an injunction order can be made where no other substantive relief is sought within the jurisdiction.
This approach was first taken in 2009 in Black Swan Investment ISA v Harvest View Limited(1) and subsequently approved by the Court of Appeal in Yukos CIS Investments Limited v Yukos Hydrocarbons Investments Limited.(2) It was developed further in Osetinskaya v Usilett Properties Inc;(3) more recently, guidance was given in early 2016 in Bascuñan v Elsca(4) and PT Ventures SGPS SA v Tokeyna Management Limited.(5)
A Black Swan order is a helpful tool in support of proceedings where an applicant or claimant has instigated – or intends to instigate – proceedings in a foreign jurisdiction. Notwithstanding that the British Virgin Islands has no local legislation equivalent to Section 25 of the UK Civil Jurisdiction and Judgments Act, the Black Swan principles entitle a BVI court to act in aid of foreign proceedings where it can be shown that there is property situated in the British Virgin Islands which:
- belongs to the defendant to the foreign proceedings; and
- may be enforced against the defendant in the event that those foreign proceedings are successful.
In such circumstances, the BVI court may use its territorial jurisdiction over the defendant to preserve the property pending the outcome of the foreign proceedings.
For relief to be granted, the BVI court must have in personam jurisdiction over the assets or property which is sought to be frozen. In Osetinskaya v Usilett Properties Inc the court confirmed that shares in a BVI company represent assets for the purpose of a Black Swan freezing order. The court must be satisfied that it is necessary in the circumstances and that the relief sought in the main proceedings before the foreign court will lead to a judgment which will be enforceable in the British Virgin Islands.
The Black Swan jurisdiction is an invaluable tool in asset tracing, since it provides a means of opening up a new front to freeze assets without the need to bring a claim for substantive relief.
For further information on this topic please contact Mungo Lowe at Harney Westwood & Riegels by telephone (+1 284 494 2233) or email ([email protected]). The Harney Westwood & Riegels website can be accessed at www.harneys.com.
Endnotes
(3) BVIHC (Com) 2013/0037 (July 25 2013)
(4) BVIHC 2015/0128 (February 3 2016)
(5) BVIHC (Com) 2015/0134 (March 4 2016).
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