Service Out Of The Jurisdiction: BVI Case Update

The recently published judgment by the Court of Appeal in Amerinvest International Forestry Group Company Limited -v- Kwok Ka Yik provides a useful summary of the test that must be satisfied before permission to serve a claim out of the jurisdiction will be granted.

Background

The Company was incorporated in the BVI and comprised of two directors, Mr. W and Ms. K, who resided in Hong Kong. The Company owns subsidiaries in Hong Kong which over time submitted various documents to the Hong Kong Company Registry for filing. Based on representations made by Ms. K as to, inter alia, ownership of the Company's shareholders and her unlawful removal as a director of the Company, the Hong Kong Registry refused to register the documents. This decision was appealed and subsequently adjourned to allow proceedings to be commenced in the BVI.

A claim was filed in the BVI seeking directions as to the identity of the directors and shareholders of the Company. Ms. K was the only named defendant and permission to serve out of the jurisdiction was duly sought on the basis that the subject matter of the claim related to the constitution, administration, management or conduct of the affairs and ownership and control of a BVI company. The Judge at first instance concluded that there was no issue in the BVI jurisdiction about the Company's membership or constitution of its board.

Service out of the jurisdiction

The applicable principles to be applied in relation to service out of the jurisdiction are captured in the case of AK Investment CJSC and others -v- Krygyz Mobil Tel Ltd and others1 and were restated in Nilon Ltd and another -v- Royal Westminster Investments SA and others.2 On an application for service out of the jurisdiction, three requirements have to be satisfied.

First, the Claimant must satisfy the Court that in relation to the foreign Defendant there is a serious issue to be tried on the merits, i.e. a substantial question of fact or law or both. Second, the Claimant must satisfy the Court that there is a good arguable case that the claim falls within one or more classes of case in which permission to serve out may be given. Third, the Claimant must satisfy the Court that the BVI is the appropriate forum for the trial of the dispute.

Court of Appeal decision

The Court of Appeal found that Ms. K's allegations related to the Hong Kong subsidiaries and ownership and directorship in the shareholders of the Company. It held that the Judge at first...