Helene Anne Lewis, December 2011
Helene Anne Lewis TEP is Senior Partner with Simonette Lewis and Chairman of STEP BVI.
The Commercial Court of the British Virgin Islands (BVI) has added an attractive dimension to this financial services centre. In the short time since its establishment, the Court has made a significant impact on the profile of the jurisdiction by streamlining the hearing of commercial matters involving ‘offshore companies’ and trusts with BVI connections.
The volume of commercial matters generated by the financial services sector in the BVI was threatening to overwhelm the two resident High Court judges in 2009, so a decision was taken to establish a Commercial Division of the Eastern Caribbean Supreme Court (ECSC) in the BVI. Mr Justice Edward Bannister was appointed as a third resident judge, to preside over the ‘Commercial Court’, although he has jurisdiction to sit in non-commercial matters as well, and the other two judges may sit in the Commercial Court.
The court’s rules track the provisions governing the English commercial court
At the Court’s opening ceremony His Lordship the Chief Justice Hugh Anthony Rawlins noted that the court would ‘bring a new and dynamic dimension to the specialist practice of cross-border litigation in the jurisdiction’ and said that ‘the aim of the Commercial Division of the ECSC was to enable the court to maintain a competitive international profile and provide support to the international business sector in the territory’.
In the two years since the court’s establishment, it has proven to be an exceedingly appealing feature of the BVI’s profile as an international financial centre. The court has established parameters qualifying matters that may be placed before it. To qualify as commercial, a claim or application must relate to a transaction of trade and commerce, and may include any claim relating to the law of business contracts and companies; partnerships; insolvency; the law of trust; the carriage of goods by sea, air or pipeline; the exploitation of oil and gas reserves; insurance and reinsurance; banking and financial services; collective investment schemes; the operation of markets and exchanges; mercantile agency; or usages and arbitration. Such a claim must also be grounded in a value of at least USD500,000 – although the judge has discretion to waive this requirement.
As testimony to the volume of work being assigned to the court it has recently become necessary for the court to establish a registry independent from the Supreme Court Registry, which has hitherto handled all claims and applications filed at the Supreme Court. In July, High Court Registrar Ms Paula Ajarie explained that the Commercial Court Registry became necessary to provide full-time administrative support to the Commercial Court. She further explained:
‘Case management of all commercial matters is now undertaken from the Commercial Registry whereby dates are fixed for the matters to be heard by the Commercial Court judge. This process ensures that cases are allotted an appropriate share of the Court’s resources and are dealt with expeditiously.’ The Commercial Court Registry will be staffed by an assistant registrar and three administrators, including court reporters and judges’ clerks. Members of the BVI legal profession have greeted the development with enthusiasm as the BVI is a busy litigation jurisdiction and the advent of the Commercial Court has provided an opportunity for commercial matters to be dealt with on a prioritised basis. The establishment of the Commercial Court Registry is seen as the natural evolution of the court.
From September 2011, in addition to having its own registry, the Commercial Court has introduced a separate scale of fees for the filing of claims and applications. The schedule of fees approved by Cabinet in February 2011 was brought into force in September 2011 and has been set with the value of commercial matters in mind. Because the facilities of the Commercial Division are so sophisticated, it is thought that litigants should have no difficulty meeting the new fee requirements. The court building is equipped with specialist information technology capabilities, including video-link capability for witnesses who cannot attend hearings in the BVI. The court can seat up to 30 lawyers at specially equipped tables with individual microphones and other audio technical aids. There is a separate Chamber Court hearing room, similarly equipped with audio and visual equipment, that can accommodate up to 20 lawyers. The building is also completely soundproofed and provides fully secured entry arrangements, including metal- detectors and other alarm equipment.
Immediately on its establishment, Commercial Court rules were introduced after extensive consultation with the Bar. It is thought that these rules, which closely track the provisions governing the operation of the English Commercial Court, significantly enhance the profile of the jurisdiction as a forum of choice for commercial litigation arising from business conducted by the more than 600,000 active companies on the BVI Register of Business Companies.
Since its inauguration just over two years ago, the Commercial Court has presided over more than 350 applications, several of them dealing with complex issues arising from the Madoff scandal. In a June 2011 decision, the Court was called upon to balance the potential pitfalls of determining preliminary issues against the benefits of hearing the substantive claim. The Court had been successfully petitioned by the defendants against the liquidators of the Fairfield Fund (a BVI feeder fund that was part of the Madoff fund structure) to hear a preliminary issue. The liquidators applied for leave to appeal the order but were denied.
The Court has also dealt with significant insolvency applications and has often been called upon to exercise its jurisdiction in Norwich Pharmacal matters. Recent decisions of the Commercial Court have led to relief being granted in matrimonial litigation to assist in the discovery of assets where one spouse was attempting to conceal matrimonial assets, as well as against the registered agent of a company involved in fraudulent conversion of assets of a shareholder. Several Re Beddoe applications have also been heard, although the records have been sealed to protect the confidentiality of the parties, and no written judgments were delivered.
Even before the advent of the Commercial Court, the importance of the BVI as an international finance centre had begun to attract top English litigators to the BVI Bar, and the establishment of the Court has enhanced the appeal of practising there. Several renowned English silks have been admitted to practise, appearing in matters ranging from heavily contested insolvency applications to aggressively defended shareholder disputes. The Court is generally accepted to be a significant adjunct to what is marketed as the ‘BVI advantage’. It provides a solid underpinning for the jurisdiction’s financial services sector, providing an additional pillar on which the reputation of the BVI as a premier international financial centre can proudly stand.
The BVI is a member of the Eastern Caribbean Supreme Court (ECSC), a circuit which comprises nine states of the geographic region known as the Eastern Caribbean. Among them only Montserrat, Anguilla and the BVI are UK overseas territories – all the others being independent states of the Commonwealth.
The nine member states share 18 High Court judges and an itinerant five-member Court of Appeal, which sits on a rotational basis in each of the nine jurisdictions during the court year, which commences in the middle of September. The ECSC was established in 1967 by the West Indies
Associated States Supreme Court Order No 223 of 1967. The Court has headquarters in Saint Lucia, from where it is administered by the Chief Justice, who is appointed by agreement among the nine heads of government of the states comprising the Organisation of Eastern Caribbean States.