BVI Commercial Court Delivers Key Decision On Third Party Disclosure Orders

The BVI Commercial Court has confirmed that it has jurisdiction to order third parties to provide disclosure on Norwich Pharmacal principles in order to assist with the enforcement of judgments, including foreign judgments.

UVW V XYZ (a registered agent) BVIHC (COM) 108 of 2016 (27 October 2016)

In addition, the decision also confirms that the BVI Court can order third parties to provide disclosure in order to police interim freezing orders granted by the BVI or foreign courts.

This will provide additional confidence to parties seeking to enforce and execute judgments in respect of assets held in the BVI, and will reassure businesses that the BVI's confidentiality regime does not enable counter-parties to evade the enforcement of legitimate decisions from international courts.

This briefing note analyses the two aspects of the decision separately and contrasts the approach taken by the BVI Court with that taken by the courts in the Channel Islands.

Background

The Claimant judgment creditor was seeking to enforce overseas judgments and had identified a company registered in the BVI belonging to the judgment debtor. It was able to demonstrate a pattern of behaviour by the debtor of concealment of assets to frustrate that enforcement. The judgment creditor applied to the BVI Commercial Court seeking third party disclosure orders against the local registered agent of the BVI company to obtain information which could lead to the identification of assets available for enforcement. The corporate confidentiality regime for which the BVI is well-known would ordinarily prevent a third party from accessing detailed information about a BVI company's affairs.

Wallbank J. held that Norwich Pharmacal relief was available against the registered agent:

Post-judgment, in aid of enforcement, where there is reasonable suspicion for believing that the registered agent is "mixed up" (innocently or otherwise) in the wilful evasion of another's judgment debt; and To assist in securing compliance with freezing orders, including such orders made by foreign courts. The decision on the post-judgment disclosure order

In his judgment, Wallbank J held that:

The legal basis for a post judgment disclosure order against a third party was found in the English Court of Appeal case of Mercantile Group (Europe) AG v Aiyela [1994] QB 366 [25]. The judgment of the BVI Court of Appeal in JSC BTA Bank v Fidelity Corporate Services Limited et al BVIHCVAP 2010/0035 had confirmed that...