Mixed Up In It? Registered Agents And Norwich Pharmacal Relief

The Court of Appeal in BTA Bank v Ablyazov1 decided that a registered agent will be innocently "mixed up" in wrongdoing for Norwich Pharmacal purposes where the BVI company is a vehicle for fraud. But what if it is not? Where do the boundaries lie? A recent unreported case in the BVI High Court provides some helpful guidance.

The basic facts of the case were that a BVI company ("BVI Co") had opened a chain of fashion shops in China. One of BVI Co's competitors, a French fashion chain operating in China through a joint venture ("JV"), suspected that BVI Co was controlled by or related to the principal individuals behind the French chain's Chinese JV partner. This would, it was alleged, have been a breach of non-compete covenants in the JV agreement between the French company and its Chinese JV partner. It is important to note that BVI Co itself was not party to the JV agreement and there was no suggestion that, by competing with the JV company, BVI Co itself was doing anything wrong. So, the case was a long way from the facts in BTA Bank v Ablyazov, where the BVI companies were themselves vehicles for the fraud.

The French company issued proceedings in Hong Kong against its JV partner for breach of the JV agreement, based on what it claimed to be compelling evidence that the relevant individuals were connected to BVI Co. Nevertheless, it then applied to the BVI Court seeking Norwich Pharmacal relief against BVI Co's registered agent, in order to obtain more evidence that the relevant individuals were connected with or controlled BVI Co, for use in the Hong Kong proceedings.

Three principal questions arose:

Was the registered agent innocently "mixed up" in the wrongdoing in these circumstances, even though there was no suggestion that BVI Co itself was doing anything wrong? Was it "necessary" for the applicant to obtain the information by way of Norwich Pharmacal relief, in the sense (amongst other matters) that this was the only way by which they could realistically obtain it? Did it make a difference that the applicant was trying to obtain the information for use in evidence in proceedings that had already been commenced? As to question 1, the Court found that the registered agent was "mixed up" in the wrongdoing in this case, despite there being no allegation that BVI Co had itself done anything wrong. The registered agent was not a "mere witness". This means that the categories of case in which a BVI registered agent may be found to...