As part of our series looking at recent BVI and Cayman Islands cases affecting the Middle East we look at the recent case of Sheikha Amena Ahmed H.A. Al-thani et al v Sheikha Aisha Mohammed Ali Abdullah Al Thani et al, in which the Eastern Carribean Court of Appeal considered the validity and enforceability of a Qatari will where assets are located in the BVI.
In the recent case of Sheikha Amena Ahmed H.A. Al-thani et al v Sheikha Aisha Mohammed Ali Abdullah Al Thani et al the Court of Appeal affirmed and clarified some important points:
- the law on estoppel and res judicata;
- the application of common law principles where a foreign domiciled person dies owning assets in the BVI; and
- sections 33 and 245 of the BVI Business Companies Act, 2004 (the "Act").
The facts of the case
Sheikh Saoud Mohammed A.A. Al Thani (the "Sheikh Saoud") was domiciled in the state of Qatar and passed away in London on 9 November 2014. Following his death, an entry was discovered in the Sharia Court register having been made and signed by a judge and issued by the Registry in Qatar on 11 June 1990. This entry was treated as an oral will in accordance with Qatari law. Pursuant to this oral will, Sheikh Saoud devised 20% of his movable and immovable estate to the respondents who were his sister, niece and "right hand man" (the "Respondents").
On 25 June 2015, Sheikh Saoud's widow and daughter (the "Appellants"), and first son initiated proceedings in the First Instance Court in Qatar challenging the validity and enforceability of the entry as a "will" and contended that it had been revoked by Sheikh Saoud's subsequent conduct. The Appellants also made an ex-parte application in the High Court in the BVI on 20 July 2015, pursuant to which they obtained ex-parte letters of administration for Sheikh Saoud's estate in the BVI on 7 October 2015 (the "Administration Letters"). However, the application did not disclose the existence of the will or that there were proceedings in Qatar challenging its validity.
Following two unsuccessful appeals, the Qatari Court of Appeal held that the will had not been revoked and it remained valid and enforceable.
The Respondents commenced proceedings in the BVI High Court seeking (amongst other things) revocation of the Administration Letters. The Appellants opposed these claims, arguing that the will was not valid in regard to Sheikh Saoud's BVI estate and that there was no issue of estoppel by virtue of the decision of the Qatari Court on the basis that the Qatari Court was not called upon to determine the formal and material validity of the will under BVI law.
Orders made on trial of the preliminary issue
On 12 January 2021, Justice Ellis of the BVI High Court ordered that the judgment of the Qatari Court of Appeal was valid and enforceable and is conclusive as to the validity and enforceability of the will in the BVI. The Appellants are estopped by the judgment of the Qatari Court of Appeal from contending that the will is not valid or enforceable in the BVI for the disposal of Sheikh Saoud's moveable property located in the BVI. Sheikh Saoud's moveable property located in the BVI includes the registered shares of a BVI company.
The issues for the BVI Court of Appeal
The Appellants appealed this decision. Accordingly, the main issues for the BVI Court to determinate were:
- whether the Appellants are estopped from contending that the will is not valid and enforceable in the BVI, which issue was not raised before the Court of Appeal in Qatar; and
- whether section 245 of the Act establishes that registered shares in a BVI company are immoveable property.
Pursuant to the judgment dated 23 March 2022, the BVI Court of Appeal affirmed the decision of Justice Ellis on 12 January 2021 and held that:
- res judicata: the BVI court will not re-open litigation in later proceedings on matters that have already been adjudicated upon by a court of competent jurisdiction (here the Qatar court of cassation) in earlier proceedings between the same parties;
- estoppel: the doctrine also encompasses the defence of the issue estoppel which prevents a party from re-litigating an issue which was integral to the cause of action in the earlier proceedings but was not raised by the party who now seeks to rely on it in subsequent proceedings between the same parties. However, there may be an exception to issue estoppel where new material has come to light.
- validity and enforceability of foreign wills in the BVI: as BVI law is silent as to the validity and enforceability of foreign wills in the BVI, the BVI Court will apply common law principles. Accordingly, where a foreign domiciled person dies owning assets in the BVI, BVI law will determine the succession and administration of immovable property located in the BVI and the law of the foreign domicile will determine the succession and administration of movable property located in the BVI; and
- section 33 and 245 of the Act: registered shares in a BVI company are movable property and their distribution on succession must be carried out in accordance with the law of the deceases testator's domicile (in this case, Qatar). Section 245 of the BVI Business Companies Act does not transform the nature of shares in a BVI company to immovable property. The situs of the ownership of shares is in the BVI for the purposes of determining matters relating to title and jurisdiction. However, this principle does not extend to other matters such as succession. The finding that shares in the BVI are movable property is also consistent with section 33 of the Act which provides that a share in a company is personal property.
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.