The Judicial System in the British Virgin Islands

The British Virgin Islands (BVI) is famous known for its role as a holding company jurisdiction in the light of corporate flexibility, tax neutrality, low cost, confidentiality of the corporate information and other numerous advantages and benefits to establish and maintain a company in BVI. It is therefore common and rife that many shareholders and commercial disputes raised between the shareholders of BVI holding companies or between the BVI companies and its transactional counterparties. This Article aims to offer a structured overview with regard to the legal and judicial system in BVI to help you head to resolve these disputes. BVI is a common law jurisdiction, although BVI law and procedure differs to a great degree from English law because of local statutes, orders and civil procedure rules. However, in certain instances British Virgin Islands law provides that in default of any local provision, English law or procedure shall apply.

I. Court Organisation Litigation remains the primary and popular dispute resolutions method in BVI and the courts in BVI are organised at four levels as follows: (i) Magistrate's Court The Magistrate's Court is the court of lowest jurisdiction in the British Virgin Islands. The Magistrate's Court deals mainly with criminal matters with summary jurisdiction, minor civil claims, and certain family law matters. The Magistrate also has limited jurisdiction in relation to salvage and wreck. Appeals from the decision of the Magistrate are appealed directly to the Court of Appeal, and do not go the High Court by way of case stated. (ii) High Court (ECSC) The Eastern Caribbean Supreme Court (ECSC) is the superior court of record for member states of the Organisation of Eastern Caribbean States, to which the BVI belongs. In addition, the Commercial division of the Supreme Court also sits in the British Virgin Islands. Although the Commercial Court may hear cases from any of the nine member jurisdictions of the Eastern Caribbean Supreme Court, in practice for a number of different reasons the Commercial division's work is predominately from the British Virgin Islands. The minimum value for a claim to be brought in the Commercial Court is US$500,000, although most cases are considerably larger than that. (iii) The Court of Appeal of the ECSC Appeals from both the Supreme Court and Magistrate's Court are heard by the Court of Appeal of the Eastern Caribbean Supreme Court. The Court of Appeal rotates through the Caribbean member states, and usually sits in the British Virgin Islands twice a year. Although most appeals are heard when the court is sitting within the relevant country, for emergency appeals, lawyers can appear in a British Virgin Islands appeal in any jurisdiction where the court happens to be sitting. (iv) Privy Council in London A final appeal can be made to the Judicial Committee of the Privy Council in London.

II. Litigation Proceedings Civil proceedings are generally commenced by filing a claim form and a statement of claim. Alternatively, in prescribed cases, the originating documents are a fixed date claim form and supporting affidavits. Claims commenced under the Insolvency Act 2003 are by way of an originating or ordinary application. Once a claim form has been issued, the claimant has six months to serve it (along with the statement of claim or affidavit, as the case may be) in the BVI, or 12 months in the case of service outside the jurisdiction. This period may be extended by the court on application by the claimant or by agreement of the parties. The maximum extension of time that may be agreed by the parties is 56 days. The defendant must then respond to service by filing and serving the following: An acknowledgment of service within: (a) 14 days for defendants in the BVI; (b) 28 days for defendants in Barbados, the Bahamas, Belize, Bermuda, the Cayman Islands, Guyana, Jamaica, Trinidad and Tobago, Turks and Caicos Islands and the US Virgin Islands; (c) 35 days for defendants located in the rest of the world. A defence within: (a) 28 days for defendants in the BVI; (b) 42 days for defendants located in Barbados, the Bahamas, Belize, Bermuda, the Cayman Islands, Guyana, Jamaica, Trinidad and Tobago, Turks and Caicos Islands and the US Virgin Islands; (c) 56 days for defendants located in the rest of the world. A defendant may also choose to admit the entire claim by filing an acknowledgment of service containing the admission. If the defendant fails to file an acknowledgement of service or defence within the applicable time limit, judgment in default may be entered against it. Once the defence has been served, the claimant is entitled to file a reply to the defence (within 14 days) and a defence to the counterclaim, if any (within 28 days).

III. Interim remedies A claimant should consider obtaining a freezing order if there is a risk that the defendant will dissipate assets that the claimant intends to recover or enforce against. Where a claimant or potential claimant requires further information held by a third party before it is able to make or fully particularise a claim, then it may seek the provision of information from that third party in accordance with the Norwich Pharmacal principles. Where a claimant intends to enforce a debt against the assets of a defendant, it may seek to obtain a charging order over those assets with a view to ultimately appoint receivers to sell those assets to satisfy the debt. In addition, or alternatively, a claimant may seek to appoint provisional receivers to take control of assets in certain circumstances, the powers of whom can be determined by the court accordance. Both parties may be able to obtain security for costs if there is a concern that the other side will not be able to satisfy any costs award made against it, although this is usually a form of relief reserved for defendants in circumstances where the claimant is impecunious.

IV. Appeal A party can seek to appeal the court's decision on one or more of the following grounds: (1) error of law; (2) error of fact and (3) error in the exercise of the court's discretion (for example, failing to take into account relevant considerations or according weight to irrelevant considerations). Where leave to appeal is required (for example, for appeals from interlocutory judgments), a party seeking leave must establish that the appeal has a realistic (as opposed to fanciful) prospect of success. An appeal to Her Majesty in Council is either as of right or with the permission of the ECCA. Where permission from the ECCA to appeal to Her Majesty in Council is required, the party must be able to show that the question involved in the appeal is one that is of great general or public importance or otherwise ought to be submitted. A party can also apply for special leave of Her Majesty in Council if permission from the ECCA is not granted. The time limits for filing appeals are as follows: (a) For an interlocutory appeal where leave is required: within 21 days of the date when leave is granted. (b) For an interlocutory appeal where leave is not required: within 21 days of the date of the decision being appealed. (c) For any other appeal: within 42 days of the date when judgment is delivered or the order is made.

V. Enforcement The main methods to enforce money judgments are: (i) Charging orders over the judgment debtor's property or assets, which are enforceable by selling the charged property; (ii) Garnishee orders attaching a debt owed to the judgment debtor from a third party; (iii) Orders for seizure and sale of goods; (iv) Appointment of a receiver; (v) Insolvency proceedings (where the judgment debtor is a company, whether incorporated in the BVI or elsewhere and is insolvent or it is just to seek the appointment of insolvency practitioners over the affairs of the company); or (vi) Bankruptcy proceedings (where the judgment debtor is an individual).