Freezing In The Caribbean

• Published date: 10 January 2022
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation
• Law Firm: Campbells
• Author: Mr Paul Kennedy and Nienke Lillington

"Black Swan BVI;

Siskina must die;

Freestanding Mareva;

Test from Ninemia;

Privy Council states the law;

We can't take it any more!"

("We Didn't Start the FIRE" - With apologies to Billy Joel)

There has been more heat than light in the area of freezing injunctions in the British Virgin Islands (the "BVI"), in particular in recent years so it comes as a welcome relief that the Privy Council have cast a cold eye over the law in Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24 (the "Judgment"). The Judgment is, as recognised by his Lordship Sir Geoffrey Vos, "ground-breaking" (para. 221).

Although the Judgment provides definitive clarity in relation to some points of uncertainty in the BVI not all of the same points arise in relation to other Caribbean jurisdictions, such as the Cayman Islands. Nevertheless, their Lordships' statement in the Judgment as to the purpose and scope of interim relief will undoubtedly be useful and relied upon for its general statement that the court is able to modify existing practices to provide effective remedies in changing circumstances, and its more specific, purposive, approach to the use of freezing injunctions.

The background to the Judgment is as follows: the claimant (appellant), Convoy Collateral Limited, sought a freezing injunction in the BVI in support of ongoing proceedings in Hong Kong against the defendant (second respondent), Mr Cho. The Hong Kong proceedings were capable of resulting in a judgment for damages equivalent to US$92 million. A freezing injunction was sought against both Broad Idea International Limited ("Broad Idea") (the first respondent), a BVI company in which Mr Cho held a 50.1% stake, and Mr Cho personally. Whilst Broad Idea was a company incorporated in the BVI, Mr Cho was habitually resident in Hong Kong.

The Privy Council was asked to consider two questions:

1. whether, under the Eastern Caribbean Supreme Court Civil Procedure Rules 2000 (the "EC CPR") the court has power to authorise service on a defendant outside of the jurisdiction of a claim form in which a freezing injunction is the only relief sought (the "Service Out Issue"); and
2. whether the High Court of the BVI has power to grant a freezing injunction against a party over which it has personal jurisdiction to assist enforcement of a prospective (or existing) foreign judgment (the "Freezing Issue").

This article will focus on the Freezing Issue. Nevertheless, it is noteworthy that the Privy Council found...