June 2015

BVI Arbitral Proceedings Memorandum

The BVI Arbitration Act came into force on 1 October 2014 and epitomises the BVI’s support for arbitral proceedings both within the jurisdiction and abroad.

In May 2015 the local judiciary, legal profession and government highlighted their commitment to arbitral proceedings at a national conference. During the headline speeches Justice Leon (Justice to the Commercial Court) and the Premier of the Virgin Islands formally opened the BVI Arbitration Centre and spoke of the jurisdiction’s commitment to arbitration both here and abroad.

The main goal of the conference was to promote arbitration within the territory and to highlight how there will be a ready nexus between the court and the local arbitration centre going forward. However, the Act has a far greater scope as it governs both domestic and international arbitrations.

Most notably the Act includes provisions for court ordered interim measures that support arbitral proceedings. Section 43 of the Act confirms that any party to arbitral proceedings may apply to the Court for an interim measure and this is regardless of whether those proceedings were commenced locally or outside of the jurisdiction.

When assessing whether to grant an award the Court must consider whether the interim measure being sought is currently the subject of arbitral proceedings and whether the arbitral tribunal is better placed to grant such an award. In addition, when the arbitral proceedings are commenced outside of the BVI the Court may only grant an interim measure if the proceedings are capable of giving rise to an arbitral award, whether interim or final, that may be enforced in the BVI.

That said, the Court has historically supported international arbitration proceedings and has readily found ways to grant free-standing injunctions. In the recent case of Nataili Osetinskaya v Usilett Properties Inc (BVI HCV0037/2013) the Judge found that “it will usually also be just and convenient to prevent the shares from being rendered worthless by restraining the company from disposing of its property, whether that property is situate in the BVI or abroad”. In that case the only asset within the jurisdiction was the shares in the BVI company. However, an interim injunction was granted to prevent the depletion of assets outside of the jurisdiction as the effect of disposing of those assets was the devaluing of the shares in the BVI company.

Whilst this case pre-dates the Act it highlights how the Court has supported arbitral proceedings at a time when Section 43 of the Act was not present. Section 43 provides a power tool for parties in foreign arbitrations to seek interim relief in order to assist in the arbitration process and to protect their position.


The BVI Courts (and indeed its appeal courts) have time and again shown that they are pro-enforcement when it comes to arbitral awards.

The Act contains provisions relating to the enforcement of both domestic and foreign awards and notably distinguishes between the enforcement of Convention and non-Convention awards. Pleasingly the enforcement of convention awards is mandatory save in circumstances where the individual against whom enforcement is invoked provides a Convention defence (usually relating to the incapacity of a party). The Act confirms that non-Convention awards may also be enforced within the BVI but the courts do have discretion to refuse to grant an award in circumstances when it is unjust to do so.

Again, the courts have shown that they are pro-enforcement when it comes to arbitral awards. It is notable in the case of Vendort Traders Inc. v Evrostroy Grupp LLC that the court accepted that a foreign non-Convention award was due and payable debt even though it had not been registered in the BVI.

In addition, in May 2014 the Privy Council (the BVI’s final court of appeal) issued a judgment allowing for the enforcement of a $932 million arbitral award in the BVI against Cukorova, a holding company of Turkey’s largest mobile telephone operator. When granting judgment the Privy Council went to some lengths to show its support of arbitral awards and found that the court may not refuse to enforce an award on the ground of error of law or fact and there was no reason to diverge from the earlier decisions issued in the Commercial Court of the Eastern Caribbean Supreme Court.

It is therefore fair to say that the BVI courts are armed and ready to assist both local and international arbitration proceedings whether that is by way of interim relief or the enforcement of arbitral awards.