British Virgin Islands: Harneys BVI Update - Insolvency Act brought into force on 16 August 2004
Last Updated: 2 August 2004

An amendment act which was necessary before the Insolvency Act of 2003 could become law was passed July 26 and a draft proclamation to bring the amended legislation into force on 16 August 2004 has been submitted to the Governor.

Although we have previously made available short papers containing overviews of the legislation we are pleased now to attach detailed guides with an analysis of likely relevant case law on the following : (To view the guides please click on the link at the bottom of the page)


administrative receivership


creditors arrangements

voidable transactions

set-off, netting and market contracts

cross border insolvency

insolvency practitioners

malpractice & disqualification orders

The only surprise appears to be that the voidable transactions provisions will not apply to transactions entered into before 16 August 2004. This is contrary to previous indications and apparently to be contained in a regulation which is not yet available.

We have not analysed the provisions contained in Part XVIII based on the UNCITRAL model law on cross-border insolvency as this will not come into force. The stated government position is that they will do so when there is "a commonly available global standard". We do not believe this is likely within any foreseeable time horizon.

Neither will the Administration provisions in Part III come into force immediately. However, here we have included a guide because the government's stated position is that these will come into force on the introduction of new companies legislation which will provide a mechanism for exempting certain types of company from Administration. We consider that creditors would be well advised to consider now whether a BVI law governed floating charge could and should form part of their security package.

An unofficial consolidation of the Insolvency Act 2003 and the Insolvency (Amendment and Consequential Provisions) Act 2004 will be available on our website ( shortly. Please contact if you have questions arising from the guides.

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