BVI courts demonstrate flexibility in enforcing overseas judgments

A recent BVI decision of Mr Justice Jack in BVIHC (Com) 0032 of 2018 (unreported), has demonstrated how the BVI Court can use its powers flexibly to aid the enforcement of overseas judgments and maximize recovery to creditors where assets are held in a BVI incorporated vehicle.

In 2020, the BVI Court recognised in the BVI a multi-million dollar judgment from the People’s Republic of China (“PRC”) Courts arising out of debts outstanding but unpaid since 2013. A charging order was obtained last Autumn over shares in a BVI company owned by the judgment debtor. Rather than proceeding down the route of an order for possession and sale of the BVI SPV, which may have failed to realise full value for the assets held within the structure, the Court appointed post-judgment receivers by way of equitable execution over the shares. The order gave the court appointed receivers the ability to exercise shareholder voting rights and to take effective control of the BVI company by changing its board of directors. In its most recent decision, the Court sanctioned the declaration of a distribution by company in receivership acting through its receiver-directors of several million dollars of accrued cash dividends and shares in a Hong Kong-listed company in specie with a current market value of over US25 million. Upon receipt of the distribution as receivers over the shares, the receivers were sanctioned to distribute those assets to the creditor towards satisfaction of the judgment debt. The BVI company will then be returned to the judgment debtor and the receivership brought to an end.  The decision demonstrates the flexibility of the BVI Court in the enforcement process and should assist judgment creditors in the PRC and elsewhere to maximize recoveries through the BVI, where the judgment debtor holds an interest in shares in a BVI company which in turn holds valuable assets overseas.

Iain Tucker and Cate Barbour acted for the receivers in the application and appeared for them at the hearing in the BVI, with Joanne Collet leading the Walkers team in Hong Kong alongside John Crook.

Iain TuckerPartnerT +1 284 852

Cate BarbourSenior CounselT +971 4 363

John CrookPartnerT +852 2596

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