Almost two years ago the Eastern Caribbean Court of Appeal handed down its decision in the long-running jurisdiction dispute in JSC MCC Eurochem v Livingston Equities Inc et al. It was a high-profile decision that is considered to have restricted the circumstances in which the BVI courts will assume jurisdiction over disputes of an international dimension but with a connection to the BVI.
The Court of Appeal’s judgment suggested that for the purposes of the forum non conveniens test, which is used in the BVI to determine whether claims should be stayed in favour of another jurisdiction, "very little weight if any" should be attached to place of incorporation when considering whether the BVI is the appropriate forum.
The Court of Appeal also found that the most likely law governing the dispute was Russian law, despite it not being known where the tortious acts at the centre of the dispute took place.
In a case which did not have obviously strong ties to any one jurisdiction in particular (albeit numerous of the defendants that allegedly received bribes were located in the BVI), the finding that Russian law governed the dispute and the lack of weight attributed to the location of several of the defendants was determinative of the overall decision that Russia was a more appropriate forum to try the claims. This conclusion was reached, despite there being evidence that the Russian courts could not accommodate claims against all of the defendants in a single set of proceedings (and potentially not at all against certain defendants) such that Russia was arguably not an available forum to try the claims at all.
The Court of Appeal’s decision was appealed to the Privy Council and heard in March 2020.
In a decision that is expected to be handed down any time from October 2020 onwards, The Privy Council will clarify whether the domicile of BVI corporations used to facilitate wrongdoing, particularly fraud, is to be regarded as an important factor for forum non conveniens purposes. It will also consider whether the Court of Appeal had been correct to find that: (i) Russia was an available forum; and (ii) the most likely governing law of the claims was Russian law.
For an important offshore financial centre such as the BVI, a decision which permits the BVI courts to assume more direct responsibility for claims concerning the misuse of BVI companies would be welcomed from a public policy perspective, a point which was not lost on the Privy Council at the hearing.
The Court of Appeal decision has also generated further debate in light of the recent decision in Broad Idea (No.2), which provides that the BVI courts have no jurisdiction to grant injunctive relief in support of foreign court proceedings. The consequence is that if the BVI courts cannot assume jurisdiction over disputes concerning companies domiciled here and also cannot grant important interim relief for claims brought elsewhere, there is a risk that BVI companies may become prone to routine abuse.
Fortunately, legislation is expected to be introduced in the coming months to deal with the apparent inability to grant injunctive relief in support of foreign court proceedings.
As for the decision in Eurochem, the wait continues, but clarity is just around the corner.