September 16, 2019

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BVI Scales Back Stand-Alone Injunctions

In 2009 in Black Swan Investment ISA v. Harvest View Limited BHVC (Com) 2009/399, the court established the principle that a court can act in aid of foreign proceedings where it can be shown that there is property situated in BVI which belongs to the defendant in the foreign proceedings and which may be enforced against in the event the foreign proceedings are successful. Then, the BVI court may use its territorial power to preserve the assets. Further, in Osetinskaya v. Usilett Properties Inc BVIHC (Com) 2013/0037, the court ruled that shares in a BVI company are assets for the purpose of a Black Swan freezing order.

But, in April 2019, the BVI Commerical Court in Convoy Collateral Limited v. Broad Idea International Inc, limited the scope of a Black Swan freezing order. The court decided it must have in personam jurisdiction over the non-resident defendant, not merely over the asset, to grant the injunction.

This decision could still be appealed. At the moment, it appears that Black Swan relief has been minimized. Litigants in BVI must focus on the ability to show personal jurisdiction over the defendant and dovetail that matter with relief in the foreign proceedings.

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About this Author

Rick Rein, Creditor's Rights Attorney, Horwood Marcus & Berk Law Firm
Partner

RICK REIN is chair of Horwood Marcus & Berk's Litigation Group and focuses his practice on creditor's rights, loan enforcement and creditor bankruptcy representation. He regularly advises secured creditors in workout and restructuring transactions, including forbearance agreements. He also assists secured creditors in recovering pledged collateral through Uniform Commercial Code sales and commercial mortgage foreclosures, in prosecuting claims based on fraud, non-performing loans, intercreditor disputes and loan commitment litigation and in defending creditors...

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