The object of this Memorandum is to provide clients of Walkers with law and procedure in relation to freezing orders in the British Virgin Islands. Freezing orders were formerly called Mareva Injunctions.
BRITISH VIRGIN ISLANDS OVERVIEW
As a British Overseas Territory, the BVI has an independent legal and judicial system based on English Common Law, with a right of final appeal to the Privy Council in London. The territory is responsible for its own internal self-government. The United Kingdom remains responsible for the territory's external affairs, defense, internal security and the courts. The Territory has enacted court rules called the Civil Procedure Rules 2000 which are closely similar, and identical in many respects, to the England and Wales CPR.
- The applicant for a freezing order (whether local or
international in operation) begins an action by filing a
Claim Form accompanied by a Statement of Claim. If the
application for the freezing order is being made ex
parte it is made on affidavit only. The affidavit sets
out the factual basis for the application including the
reasons why the orders are sought urgently or why notice to
the other parties to the case would defeat the purpose of the
application BVI CPR, rule 17.4(4). In exceptional cases of
urgency the claimant may apply for an interim freezing order
before issuing a Claim Form.
- A freezing order made ex parte may be granted
for a period not exceeding 28 days. The court must fix a
return date within this time for an inter parties
hearing on the grant of the order or for further
consideration of the order.
- If the major target defendant in the BVI proceedings (the
party holding or controlling the bank account and against
whom the freezing order is sought) is a BVI company, service
out of the jurisdiction on additional foreign defendants may
be permitted under CPR, rule 7.3(2)(a). Service out of the
jurisdiction is permitted in this case if there is a real
issue between the claimant and the BVI company that is
reasonable for the court to try and the foreign defendant is
a necessary AND proper party to claim.
- Where rule 7.3(2)(a) is not applicable and all of the
defendants are resident outside the jurisdiction,
Siskina-type difficulties may arise. The rule in The
Siskina  3 All ER 803 is good law in the BVI. The
claimant will therefore be required to present a substantive
claim against the defendants in addition to the application
for an interim freezing order.
- The BVI courts recognise that BVI proceedings may be
brought in aid of foreign proceedings. BVI courts are happy
to stay their own proceedings after granting a freezing
order, to permit the litigation to be conducted in the
jurisdiction where the major battles are being fought.
- A claimant who succeeds in obtaining an interim freezing
order will invariably be required to give an undertaking in
damages with the object of compensating the defendants if the
claimant should ultimately be unsuccessful at the trial and
the court should later find that the defendants have suffered
loss as a result of the grant of the order.
- A foreign claimant without sufficient assets in the
Territory may, on the application of the defendants, be
ordered to provide security for the defendants' costs
of the action.
British Virgin Islands
Jack Boldarin, Partner
Wayne Panton, Partner
David Whittome, Partner
Heather Bestwick, Partner
Hugh O'Loughlin, Partner
Rod Palmer, Partner
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.