British Virgin Islands updates
Arbitration & ADR
Court appoints receiver under Arbitration Act to preserve assets pending arbitration award
- 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.
Sixtieth anniversary of New York Convention – time to choose BVI arbitration and enforcement
- 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.
Banking
Launching an ICO in British Virgin Islands
- British Virgin Islands
- 15 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.
Company & Commercial
Are you wearing the right hat? Directors' duties revisited by Court of Appeal
- British Virgin Islands
- 29 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.
Court of Appeal provides guidance on directors' powers
- British Virgin Islands
- 22 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.
Corporate Tax
Tax information exchange: an overview
- British Virgin Islands
- 26 January 2018
The BVI tax information exchange system is largely modelled on international principles developed by the Organisation for Economic Cooperation and Development and is split into two types of regime. The 'automatic' exchange of information regime requires financial institutions to exchange formulistic data about the accounts of foreign taxpayers, while the 'on request' regime deals with specific and potentially in-depth investigations into the affairs of named taxpayers with offshore or international holdings.
Insolvency & Restructuring
This is not a wind up: BVI court approves restructuring provisional liquidation
- British Virgin Islands
- 15 March 2019
In a major development in BVI insolvency law and practice, the Commercial Court recently held that provisional liquidation is available to facilitate a restructuring. The objective of a restructuring provisional liquidation is to provide a better outcome for creditors than would be likely on a winding up. The Commercial Court's decision will certainly influence the current debate in the British Virgin Islands regarding insolvency legislation reforms.
Appointing liquidators after alleged loss of substratum
- British Virgin Islands
- 07 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
- British Virgin Islands
- 31 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.
No armchair liquidators – court confirms appointment of provisional liquidators to Swiss company
- British Virgin Islands
- 01 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.
Court strikes out passing-off claim in relation to goodwill held outside British Virgin Islands
- British Virgin Islands
- 11 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.
