Harney Westwood & Riegels updates

Reverse engineering: Court of Appeal in rare reversal of findings of fact
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 29 November 2018

The BVI Court of Appeal recently considered the scope of its jurisdiction to interfere with findings of fact made at first instance. This is the second time in 2018 that the court has addressed this issue. While the threshold for intervention is high, the court will intervene on appropriate occasions. The thoroughness of the evaluation of evidence and the credibility of the judge's conclusions at first instance are likely to be pivotal to that determination.

Receivers – gateway to unlocking disabled bearer shares
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 08 November 2018

In two recent BVI Court of Appeal decisions, disabled bearer shareholders were found to have a constitutional right not to be deprived of their property without compensation. It is now abundantly clear that even where BVI disabled bearer share companies are still without functionaries (ie, directors) to facilitate the traditional redemption of those shares, the court has flexible jurisdiction to appoint receivers to redeem those disabled shares, thereby ultimately restoring the companies to a functional state.

Are you wearing the right hat? Directors' duties revisited by Court of Appeal
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 25 October 2018

The Court of Appeal judgment in Antow Holdings Limited v Best Nation Investments Limited continues the development of the law regarding BVI directors' duties following the Independent Asset Management appeal, which established – for the first time in the British Virgin Islands – clear guidance regarding the proper purpose test. The decision is arguably at the extreme end of the spectrum, with the court describing the motives of the Best Nation directors as self-serving.

Think before you blink: court halts cross-border requests without consideration
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 18 October 2018

The BVI courts have again stepped in to ensure that proper thought and process is applied to requests made by foreign governmental bodies. In the first case of its kind to successfully challenge the exercise of the attorney general's powers under the Criminal Justice (International Cooperation) Act, the BVI High Court held that the attorney general is required to do more than rubber stamp the requests received under the act.

Court appoints receiver under Arbitration Act to preserve assets pending arbitration award
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 11 October 2018

A BVI court has appointed Grant Thornton as a receiver over a BVI company under Section 43 of the Arbitration Act 2013 in order to preserve the value of the company pending the determination of foreign arbitration proceedings. The decision illustrates the effectiveness of the interim relief provided under the Arbitration Act to preserve assets against which an arbitration award will be enforced.

Stanford v Akers: asking a BVI court to reverse a liquidator's decision
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 04 October 2018

In a recent case, the BVI Court of Appeal addressed standing in the context of applications under Section 273 of the Insolvency Act 2003, whereby an aggrieved person can ask the courts to reverse or vary a liquidator's decision. The court held that, as a shareholder of a company in liquidation, the appellant was an outsider to the liquidation who had no legitimate interest that entitled him to standing under Section 273.

Revisiting costs awards – BVI Court of Appeal varies costs order based on US appeal decision
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 20 September 2018

In Fairfield Sentry Limited (In Liquidation) v Farnum Place LLC the BVI Court of Appeal varied a costs order based on a material change of circumstances – namely, a decision of the US Court of Appeals for the Second Circuit. The BVI court held that the US decision was a "material change of circumstances" which allowed it to vary the costs award by disallowing the costs of Farnum's expert.

Appointing liquidators after alleged loss of substratum
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 06 September 2018

The Court of Appeal recently considered the test for appointing liquidators to a company following an alleged loss of substratum. The case provides insight on the principles of loss of substratum, particularly in a case where a company's object is not prescribed by its memorandum and articles of association.

Discretionary beneficiaries' rights to trust information
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 30 August 2018

In separate but related proceedings, the BVI courts have permitted an applicant to inspect documentation relating to the liquidation of certain BVI companies. The decisions solidify the open justice policy and highlight the importance of allowing beneficiaries to oversee trustees' activities in order to ensure that the trust property is properly managed and that trustees can be held to account accordingly.

Singapore and BVI courts cooperate against cross-border fraud
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 16 August 2018

The Singapore Court of Appeal recently ruled to reinstate and expand a Mareva injunction against fraudster defendants in a conspiracy claim, providing strong support for an earlier decision of the BVI Commercial Court in related proceedings. The decision demonstrates the importance of consistency between courts in multiple jurisdictions in complex cross-border cases.

Court of Appeal reaffirms that it will rarely reverse findings of fact
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 09 August 2018

The BVI Court of Appeal recently dismissed an appeal against the liquidators of BVI company Pioneer Freight Futures Company Limited and reaffirmed the established law regarding reversing findings of fact. The court held that it will intervene only in rare cases, such as when there is no evidence to support the conclusion, the conclusion was based on a misunderstanding of the evidence or the conclusion was one that no reasonable judge could have reached.

Trusts and disclosure: a recent lesson
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 02 August 2018

A recent BVI decision highlights the need for trustees to think carefully and, if in doubt, take advice before refusing an information request from a beneficiary. The consequences of getting this wrong (not least in potential personal cost exposure for the trustee) can be severe.

Sixtieth anniversary of New York Convention – time to choose BVI arbitration and enforcement
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 05 July 2018

The British Virgin Islands is a pro-arbitration jurisdiction. Under the Arbitration Act, with regard to both New York Convention awards and non-New York Convention awards, the party against which the award has been made can make representation to the court regarding a refusal to enforce. An example of the British Virgin Islands' pro-enforcement approach can be seen in Belport Development Limited v Chimichanga Corporation.

Freezing injunction: what is a good arguable case?
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 21 June 2018

The BVI Commercial Court has provided helpful guidance as to the threshold for a good arguable case, dismissing an application to discharge a worldwide freezing injunction obtained by a claimant. The court held that where there is a good arguable case that a defendant has acted fraudulently or dishonestly, or with "unacceptable low standards of morality giving rise to a feeling of uneasiness about the defendant", further evidence is often unnecessary to justify a freezing injunction.

Avoiding evasion: court takes pragmatic approach to serving uncooperative defendants abroad
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 14 June 2018

International litigation and asset recovery require the pursuit of defendants and their assets across borders; therefore, it is a routine aspect of BVI litigation for claimants to serve legal documents abroad. Two recent decisions should significantly decrease the delay in effecting service abroad and pave the way for a more efficient approach to service out in the future.

No armchair liquidators – court confirms appointment of provisional liquidators to Swiss company
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 07 June 2018

In the latest judgment regarding the DPH liquidation, the BVI Court of Appeal upheld the appointment of BVI provisional liquidators in respect of a Swiss company and clarified that evidence of dissipation of assets (in the Mareva sense) may not be a pre-condition to the appointment of provisional liquidators.

Tick, tock – the need to keep an eye on the clock in liquidator applications
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 24 May 2018

A recent Court of Appeal decision serves as a useful reminder to keep an eye on the clock when seeking the appointment of liquidators to a company in the British Virgin Islands. The decision makes clear that any extension must be expressly granted and legal practitioners must therefore keep an eye on the clock to avoid a deemed dismissal under Section 168 of the Insolvency Act.

Court strikes out passing-off claim in relation to goodwill held outside British Virgin Islands
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 17 May 2018

Claims of passing off are rare in the British Virgin Islands and a recent attempt to bring a BVI action in relation to goodwill held outside the jurisdiction has failed. The court examined the law and relevant English authorities on the tort of passing off. It opined that goodwill is governed by territoriality and that in order to succeed, the claimant must prove that it has goodwill in the form of customers in the jurisdiction in which the suit is undertaken.

Court of Appeal provides guidance on directors' powers
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 18 January 2018

A recent Court of Appeal ruling provided guidance on directors' powers after considering whether a fresh issuance of shares by directors which altered the balance of voting power between the shareholders was done for a proper purpose. The court held that directors should not issue shares in a manner that could affect the balance of power between groups of shareholders or create new majorities, irrespective of whether the old or new majority have a proprietary interest in the fund.

Launching an ICO in British Virgin Islands
Harney Westwood & Riegels
  • Private Client & Offshore Services
  • British Virgin Islands
  • 14 December 2017

Interest in the setting up and distribution of initial coin offerings (ICOs) in the British Virgin Islands and other offshore locations has increased rapidly during 2017, and this is expected to continue. No ICO or blockchain-specific rules or guidelines have yet been issued by the government or regulator; however, there are several important issues for parties in the British Virgin Islands to consider, including the key laws and regulations surrounding the issue.

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