Costs of Payment into Court or Specific Disclosure: The BVI’s Battle Against Fraud

In the face of increasingly complex and international fraud schemes, the British Virgin Islands (BVI) has been at the forefront of developing effective mechanisms to combat these financial crimes. A recent decision by the BVI Court of Appeal highlights the ongoing challenges in this area, but also underscores the jurisdiction’s commitment to tackling fraud.

The Battle Against Fraud

Fraud is a constant and evolving threat to international finance, with dishonest individuals exploiting globalization and complex company structures to perpetrate their schemes. The BVI, as a major offshore financial centre, has been particularly vulnerable to these attacks. However, the jurisdiction has responded by developing a robust legal framework and innovative judicial approaches to combat fraud.

Payment into Court or Specific Disclosure: A Key Issue

One of the key challenges in combating fraud is obtaining effective disclosure from parties involved in fraudulent schemes. In recent years, the BVI has introduced measures to facilitate payment into court or specific disclosure, enabling claimants to obtain the information they need to pursue their claims.

Recent Developments

However, the Court of Appeal’s decision in Broad Idea International Ltd & Anr Convoy Collateral Ltd (May 2020) overturned the Black Swan jurisdiction, finding that the BVI Court had no jurisdiction to grant injunctive relief absent substantive proceedings in the BVI. This development caused concern among legal practitioners and claimants, who had come to rely on the innovative judicial approach established by Black Swan.

Legislative Response

Fortunately, the BVI legislature responded quickly to this decision, introducing section 24A of the Supreme Court Act in January 2021. This statute grants the BVI Court jurisdiction to grant injunctive relief in support of foreign proceedings, including against non-cause of action (or “Chabra”) respondents. The legislation also confirms the Court’s jurisdiction to grant Norwich Pharmacal relief in support of foreign proceedings.

The Way Forward

The recent developments in the BVI demonstrate a commitment to tackling fraud and ensuring that claimants have access to effective disclosure mechanisms. While the ongoing challenges posed by international fraud schemes are significant, the BVI’s legislative response and innovative judicial approaches provide a robust framework for combating these crimes.

• As Lord MacNaughten once put it, “Fraud is infinite in variety” – but with the BVI’s efforts, claimants can be confident that they have effective tools to pursue their claims and recover their losses.