Eastern Caribbean Court Of Appral Considers Enforcement Issues In 'Alfa v Cukurova'

On 20 July 2011 the Eastern Caribbean Court of Appeal ("ECCA") handed down the latest decision in the long running case of Alfa Telecom Turkey Limited v Cukurova Finance International Limited and Cukurova Holdings AS.

At the trial of the substantive action, the trial judge held decisively in favour of Cukurova, finding that no event of default had occurred and that accordingly, it was not open to Alfa to enforce its security. Alfa appealed the decision and the ECCA subsequently ruled in its favour and set aside the judgment of the trial judge.

The case itself raises several matters of law but there are two main points of note for commercial lawyers in the British Virgin Islands.

Firstly, Justice Gordon held that the trial judge erred in concluding that an acceleration letter served on Cukurova by Alfa on 16 April 2007 was vitiated because its reliance on invalid acts of default constituted a fundamental breach of contract. Justice Gordon stated: "Service by a lender of a demand letter relying on acts...