BVI Court of Appeal Overturns Black Swan

In a judgment handed down on Friday 29 May 2020 in Broad Idea International Limited v Convoy Collateral Limited (BVICMAP 2019/0026), the Eastern Caribbean Court of Appeal (Pereira CJ, Blenman, Michel JAA) has ruled that the BVI Court cannot grant a free standing freezing injunction against a BVI company where that company is not a party to substantive proceedings either in the BVI or elsewhere. In so deciding, the Court of Appeal has determined that the case of Black Swan Investments ISA v Harvest View Limited (Claim No BVIHCV 2009/399) “Black Swan”) was wrongly decided. The Court of Appeal also ruled that the assets of a BVI company are not, without more, to be considered the assets of one of its shareholders such that the company’s assets may be directly available for execution of a foreign judgment against that shareholder so as to justify their being made subject to a freezing injunction.

Although the judgment of the Court of Appeal overturns 10 years of development of the Black Swan jurisdiction in the BVI, it confirms the integrity and robustness of the judicial process, the rule of law and the doctrine of precedent. It disposes unambiguously of any argument that there is some jurisdiction of uncertain ambit to obtain “Black Swan relief” and it places the onus clearly on the Legislature of the BVI to decide whether the BVI Courts are to have the power to assist foreign courts directly, and if so which foreign courts, in what specific circumstances and using what procedural mechanisms, something that was lacking from the Black Swan line of authority.

 

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