Exploring Offshore Litigation

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Exploring Offshore Litigation is a captivating podcast series containing audio of written blog content that dives deep into the intriguing world of offshore litigation, including the BVI and Cayman. Each episode sails through complex legal waters, bringing you up-to-date analysis of recent high-stakes cases and expert commentary from the leading minds in this specialised field. Our episodes demystify legal jargon and break down complex cases to make them accessible to all. Harneys, an international law firm with entrepreneurial thinking, brings each episode to you.

  1. Privy Council decision - Cayman Islands: Submission to foreign courts

    DEC 11

    Privy Council decision - Cayman Islands: Submission to foreign courts

    In a recent Privy Council decision IGCF SPV 21 Limited v Al Jomiah Power Limited and another, the Board ruled on when a party is held to have submitted to the jurisdiction of a foreign Court as a matter of Cayman law. The parties' positions It was common ground between the parties that an applicant will forfeit its right to an injunction if it submits to the Court of a foreign jurisdiction. The Appellant was pursuing proceedings against the Respondent in Pakistan. The Respondent had sought to appear in Pakistan in order to contest jurisdiction. The Respondents applied for an anti-suit injunction in the Cayman Courts, seeking to restrain the Appellant from pursuing the proceedings in Pakistan. The Appellant's argument was that the Respondent had submitted to the jurisdiction of Pakistan. The Rule in Geoprosco The Appellant relied on what they called the "Rule in Geoprosco" - a 1975 English Court of Appeal case that held that appearing before a foreign Court (Pakistan) simply to contest jurisdiction counted as submission. Since Geoprosco was decided, it had in fact been reversed in England and Wales by a 1982 statute. Without an equivalent Cayman statute, the question arose: what was the Cayman position? The Board concluded at [52] that Geoprosco "should form no part of Cayman law". Put simply, appearing in a foreign Court to contest jurisdiction did not count as submission. What counts as submission? In deciding what counts as submission, the Board held that Cayman law should reflect the current law in England and Wales, namely the seminal case of Rubin v Eurofinance. Key takeaways The Board's approach to a legislative lacuna in Cayman is noteworthy. The Board analysed academic texts and English Hansard Debates, and compared the solutions of other common law jurisdictions. It was also emphasised that the "Cayman courts may decline to follow English court decisions where there is good reason to do so" [47]. Interestingly, the Board noted that some common law jurisdictions had adopted legislation similar to the English statute, and that others without a legislative equivalent had declined to follow Geoprosco. The Board highlighted a first instance case from Bannister J in the BVI to that effect. The Appellants had not been able to point to a single common law jurisdiction which followed the Rule in Geoprosco. Although a Cayman judgment, the case may well have extra territorial influence in years to come in those jurisdictions where common law solutions have so far been found, but only at the first instance level. Finally, and as a mark of the jurisprudential significance of the BVI, this judgment is one of a number of important decisions in which the Board was assisted by the BVI's the Honourable Dame Janice Pereira, who heard the appeal together with four permanent members.

    3 min
  2. Appointment of an Equitable Receiver in Cyprus

    DEC 10

    Appointment of an Equitable Receiver in Cyprus

    Harneys successfully secured the appointment of a receiver by way of equitable execution over a Cyprus private company, in order to assist in the execution of a judgment against a villa in Limassol Marina. Facts Our client obtained a Singapore judgment for over USD 124 million plus interest against the defendants. After filing a common law action in Cyprus based on that judgment, the District Court of Larnaca issued a summary judgment, effectively recognising and localising the Singapore judgment in Cyprus against the judgment debtors. Subsequent enforcement measures were pursued in Cyprus to target assets of the judgment debtors located within the jurisdiction. One such asset was a villa at the Limassol Marina, for which no separate title deed had been issued. This, in turn, necessitated the filing of an application for the appointment of a receiver over the judgment debtor owning the villa and/or the villa itself. Legal background The Cyprus courts may appoint a receiver by way of equitable execution, where there exists a practical or legal hindrance or difficulty, which prevents enforcement through ordinary statutory means. The courts must be satisfied that the receiver is likely to meaningfully assist in executing the judgment. The appointment is discretionary and grounded in equity principles. This type of order is particularly appropriate, as in this case, when the debtor's interest in immovable property cannot be enforced under existing statutory provisions. The case Harneys argued that there was a legal impediment to execution against the property, as no separate title deed had been issued in the name of the judgment debtor. The property, one of the villas at the Limassol Marina, is held by the judgment debtor under a long-term lease agreement with the Ministry of Energy, Commerce and Industry, as well as a sublease agreement with another Cyprus company. Following the issuance of the summary judgment, the judgment creditor attempted to register a memorandum of judgment over the property, with the intention of initiating its sale under the provisions of the Cyprus Civil Procedure Law, Cap. 6. However, this was not possible. The District Lands Office of Limassol confirmed in writing that such registration could not be effected "since [the judgment debtor] is not the registered owner [of the property] as provided by the relevant legislation." Relying on this confirmation, Harneys argued that the absence of registered title deed meant that no other legal mechanism was available to execute the judgment against the property. This constituted a clear impediment to execution against the property, thereby justifying the appointment of a receiver by way of equitable execution. Ruling The District Court of Larnaca held that, indeed, the absence of a separate title deed created a legal difficulty that prevented the property from being sold through the ordinary execution process. Accordingly, the Court found it necessary to appoint a receiver with powers to take control of the property, assess its condition and proceed with a private sale by one of several possible means: assignment of rights; cancellation of the existing lease and sublease agreements and execution of new agreements with a buyer; or even the transfer of rights from the lease and sublease agreements to a company, with the sale ultimately effected through the sale of that company's shares. The Court concluded that this was an appropriate case for the appointment of a receiver, finding that there was a reasonable prospect that the receiver's involvement and the ancillary powers granted would substantially assist in the execution of the judgment. Consequently, the Court appointed the proposed receiver, an experienced lawyer and insolvency practitioner, and issued ancillary orders to facilitate the execution process. Comment This decision is particularly significant in the context of cross-border litigation and judgment enforcement, as it demonstrates the Cyprus cour...

    5 min
  3. Enforcing security over mortgage assets in the British Virgin Islands: the emerging battle grounds Appointment Powers and duties Disputes relating to the appointment of receivers Conclusion

    DEC 4

    Enforcing security over mortgage assets in the British Virgin Islands: the emerging battle grounds Appointment Powers and duties Disputes relating to the appointment of receivers Conclusion

    There has been a significant increase in the number of lenders enforcing against secured assets in the BVI, which has entailed an uptick in the appointment of out-of-court receivers. This guide highlights the types of disputes arising out of such appointments. As many offshore companies operate as holding vehicles, security is often granted by way of share mortgage. The BVI Business Companies Act 2004 (BCA), provides a mortgagee with security over shares in a BVI company a statutory right to appoint receivers over those shares. That right is typically mirrored in the underlying security instrument. The process for appointing receivers in the BVI is set out in the Insolvency Act 2003 (Insolvency Act). Once appointed, out-of-court receivers act as agent for the mortgagor unless the instrument pursuant to which they are appointed provides otherwise. While receivers are generally personally liable for their actions, this agency affords them a degree of protection as they act in the name of and on behalf of the mortgagor. BVI legislation is relatively light-touch on the powers granted to a receiver, generally deferring to what has been agreed and set out within the instrument pursuant to which the receiver is appointed. In the case of security over shares, the receiver will generally have the power to (1) sell the shares, (2) vote the shares, and (3) take such other steps as they consider necessary or desirable to protect, improve or realise the shares. According to the Insolvency Act, receivers are subject to a primary duty to exercise their powers (1) in good faith and for a proper purpose and (2) in a way they believe (on reasonable grounds) to be in the best interests of the person on whose behalf they are appointed. To the extent consistent with these primary duties, a receiver has a secondary duty to have reasonable regard to the interests of certain interested parties, such as creditors and those with an interest in any equity of redemption. As the number of receiverships increase, so does the range of issues being disputed by mortgagors, often seeking to prevent appointed receivers from exercising their powers. The following trends are beginning to emerge: 1. Challenges to appointment A mortgagor seeking to resist having their security enforced will often start by challenging the validity of the receiver's appointment by reference to the security documents. The relevant documents must have been properly executed and valid, the right to appoint receivers must have accrued (usually contingent upon an event of default) and the necessary processes carried out to notify the mortgagor of the default and give effect to the receiver's appointment. 2. Extent to which the Insolvency Act applies to receiverships over shares in BVI companies owned by an individual or entity located elsewhere The Insolvency Act has an entire part governing the appointment of receivers. However, there is ambiguity as to whether several key provisions, such as those setting out the duties of a receiver, apply to all receivers appointed in relation to assets in the BVI. Various provisions apply specifically to a receiver of a 'company', a company being defined as a company in respect of whose assets a receiver is appointed, unless the context requires otherwise. The overarching definition of a 'company' in the Insolvency Act is restricted to BVI registered companies. Arguably, therefore, where a receiver is appointed over shares in a BVI company, but not the assets of a BVI company, these provisions do not apply. This ambiguity can lead to disagreements over what steps should or should not be taken by receivers and provides fertile grounds for legal disputes. 3. Balancing duties The tripartite nature of receiverships (between mortgagee, mortgagor and receiver) has given rise to extensive authority on how receivers ought to balance the various duties that arise. But there is no one-size-fits all solution: a receiver must evaluate the competing interests ...

    7 min
  4. A Tale of Two Arbitrations: Lessons from the BVI Court of Appeal

    DEC 3

    A Tale of Two Arbitrations: Lessons from the BVI Court of Appeal

    In the recent judgment of TAX v FDQ, the BVI Court of Appeal provided guidance on the granting of anti-suit arbitration injunctions and the Court's supervisory jurisdiction over arbitrations commenced in the BVI. Background The applicant/appellant, TAX, and the respondent, FDQ, entered into a license agreement in 2018 and further agreed that any disputes arising out of the agreement would be arbitrated in accordance with the BVI Arbitration Act 2013. Their relationship subsequently broke down and on 21 January 2021, TAX initiated arbitration proceedings in the BVI (the 1st Arbitration). The Final Award of the 1st Arbitration was handed down on 21 February 2023. On 23 March 2023, FDQ filed a Fixed Date Claim Form in the BVI High Court, seeking to challenge the Final Award by way of appeal. On the same date FDQ also filed a notice of application in the High Court for leave to appeal several points of law. The leave has been granted but the appeal is yet to be heard. FDQ's Fixed Date Claim Form was heard in December 2023. On 25 June 2024, Mr Justice Wallbank ordered that the Final Award be set aside (the Setting Aside Order). In his judgment, Mr Justice Wallbank indicated that by setting aside the Final Award, this will give the parties opportunity to refer their disputes to a differently constituted tribunal if they so wish. TAX has since obtained leave to appeal the Setting Aside Order. The appeal also remains to be heard. On 21 July 2025, FDQ started a new arbitration in the BVI (the 2nd Arbitration) with identical subject matter, factual background and issues as the 1st Arbitration. On 29 July 2025, TAX applied to the BVI Court of Appeal for an interim injunction to restrain FDQ from pursuing the 2nd Arbitration. Key legal issues At the heart of this appeal is whether it is just and convenient to grant interim injunctive relief to restrain FDQ from pursuing the 2nd Arbitration while two appeals are pending. The Court's starting point is that it may, in the exercise of its equitable jurisdiction and discretion, grant interim injunctive relief where satisfied that it is just and convenient to do so. While acknowledging the policy imperatives in the Act against judicial interference in arbitration proceedings, the Court reiterated well-established case law, that the Court retains the power to prevent abuse of process in the conduct of Court or arbitral proceedings. It would exercise those powers of control only if necessary, and would do so judicially, not to interfere with an arbitration, but rather to restrain a party from abusing the process of a Court or arbitral tribunal or using either forum in an oppressive or unconscionable manner. This principle applies whether the arbitration is domestic or foreign. Applying the above principles, the Court was be satisfied that it was just and proper to grant an interim injunction, subject to an undertaking in damages based on the following findings: 1. There are two pending appeals before the Court in relation to the 1st 2. Parties agree that the issues to be determined on appeal are similar to some of the issues that will arise in the 2nd Arbitration, including construction and meaning of the license agreement and liability. 3. If the 2nd Arbitration advances at the same time as the appeals, those issues would be considered in parallel. 4. By executing the arbitration agreement, the parties have agreed that the BVI is the seat of arbitration and that the Act is applicable, thereby submitting them to all stages of the arbitration process including any appeals that may be pursued under the Act. The 1st Arbitration will only conclude after the determination of the two appeals. 5. By attempting to pursue the 2nd Arbitration while the 1st Arbitration is in train, FDQ will cause duplication of efforts, expenditure and resources, which would run contrary to the overriding objective of the BVI Civil Procedure Rules (Revised Edition) 2023. 6. More fundamentally, such a course is manifestly...

    6 min
  5. Navigating the Arbitration-Insolvency Interplay: Hyalroute and the Cross-Border Implications for Creditors

    DEC 2

    Navigating the Arbitration-Insolvency Interplay: Hyalroute and the Cross-Border Implications for Creditors

    It's a familiar dilemma: a debt remains unpaid under a contract and the creditor wishes to pursue payment of the debt. The contract contains an arbitration agreement requiring disputes to be resolved in arbitration. The debtor disputes liability to pay the debt. The creditor is left to weigh its options - should it seek to wind up the company on the basis of the unpaid debt, or refer the dispute to arbitration? Courts of several leading common law jurisdictions have long grappled with the inherent tension between insolvency proceedings and arbitration. In the past decade, this debate intensified following the decision of the English Court of Appeal in Salford Estates (No.2) Ltd vs Altomart Ltd (No.2)) ('Salford Estates'). Following Salford Estates, certain leading common law jurisdictions have diverged in their approach to the interaction between insolvency and arbitration proceedings. In particular, there has been a marked divergence in the approaches taken by the courts of Hong Kong when compared with the approach taken in England (and the leading offshore jurisdictions closely associated with it). Since 2023, this divergence has crystallised in the landmark decisions of the Hong Kong Court of Final Appeal in Re Guy Kwok-Hung Lam ('Re Guy Lam') and the decision of the Judicial Committee of the Privy Council4 in Sian Participation Corp v Halimeda International Ltd ('Sian Participation'). Now, Hong Kong law, as established in Re Guy Lam and subsequently Re Simplicity & Vogue Retailing (HK) Co Ltd [2024] 2 HKLRD 1064 ('Simplicity'), generally gives primacy to upholding arbitration agreements. The Hong Kong courts will stay winding up proceedings in favour of arbitration, unless there is a strong reason not to do so, such as the dispute being deemed frivolous or an abuse of process. In contrast, English law, following Sian Participation, requires a debtor to demonstrate a bona fide dispute on substantial grounds before a creditor's winding up petition will be dismissed or stayed. Against this backdrop of divergent approaches, the recent decision by the Court of First Instance of the High Court of Hong Kong (the 'Hong Kong Court') in Hyalroute Communication Group Limited v Industrial and Commercial Bank of China (Asia) Limited [2025] HKCFI 2417 represents a significant and welcome development. The case marks the first time the Hong Kong Court had to consider whether an anti-suit injunction should be granted to restrain a creditor from presenting a winding up petition in the Cayman Islands (or another similar common law jurisdiction which applies the Sian Participation approach) despite the existence of an arbitration agreement requiring the dispute to be 'finally resolved' through Hong Kong arbitration. It raises an important question as to the relevant law when the Hong Kong courts determine whether to restrain foreign winding up proceedings in jurisdictions that are now bound, or likely, to apply the approach in Sian Participation in favour of a Hong Kong arbitration. Download the PDF to read the full article. This article first appeared in Volume 22, Issue 6 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com

    4 min
  6. A More Common Thread Running Through the Common Law? The Supreme Court of Bermuda Grants What Is Believed To Be the First-Ever Extra-Territorial Summoning of a Company Director to Appear Before It for a Private Examination by Joint Provisional Liquidato

    DEC 1

    A More Common Thread Running Through the Common Law? The Supreme Court of Bermuda Grants What Is Believed To Be the First-Ever Extra-Territorial Summoning of a Company Director to Appear Before It for a Private Examination by Joint Provisional Liquidato

    In a landmark decision of the Supreme Court of Bermuda ('Court'), Harneys and the joint provisional liquidators ('JPLs') of a Bermuda company (the 'Company') successfully argued that the Court's power to summon officers of a company in liquidation or provisional liquidation before it for a private examination and delivery up of books and records under the Companies Act, 1981 ('Companies Act') has extra-territorial effect. The Company is a Class C long-term insurer registered under the Bermuda Insurance Act 1978 ('IA'), and is a segregated accounts company under section 6 of the Segregated Accounts Companies Act 2000 ('SAC Act'). It has been licenced by the Bermuda Monetary Authority ('BMA') since 2013. Download the PDF to read the full article. This article first appeared in Volume 22, Issue 6 of International Corporate Rescue and is reprinted with the permission of Chase Cambria Publishing - www.chasecambria.com

    1 min
  7. Guide on Restoring a Cyprus Company that has been struck off pursuant to section 327 of the Law

    NOV 27

    Guide on Restoring a Cyprus Company that has been struck off pursuant to section 327 of the Law

    In Cyprus, companies that are struck off the official companies register maintained by the Department of Intellectual Property and Registrar of Companies in Cyprus (the Registerand the Registrar) can be restored, mainly, through two routes: (1) administrative restoration by the Registrar; or (2) Court-ordered restoration. The appropriate route depends primarily on the reason for the strike-off and the time that has passed since the company was removed from the Register. This article outlines both processes and explains the key legal considerations involved. Strike-off process Under section 327(1) and (2A) of the Companies Law, Cap. 113 (the Law), a company that is not under a liquidation process may be struck off by the Registrar in the following scenarios where: 1. The Registrar believes the company is not carrying on business or is not .; or 2. The directors apply for strike-off to the Registrar, provided the company has fulfilled all legal obligations; or 3. Failure to pay the annual levy (which applied from 2011-2023, as now abolished) within one year from the due date; or 4. Failure by a variable capital investment company to file the required special resolution within the timeframe set by the Companies (Amendment) (No. 3) Law of 2021. If the Registrar has reasonable cause to believe a company is inactive, as per scenario (1) above, then: 1. A first letter is sent requesting confirmation of the company's operational status. 2. If no response is received within one month, a second letter is issued within 14 days, warning that a strike-off notice will be published if the company does not reply within another month. 3. If there is still no response, a three-month notice is published in the Official Gazette. 4. During this period, the company, its members, or its creditors may file an objection showing that the company is active or compliant. 5. If no objection is made, the company is struck off the Register. Administrative restoration A company struck off by the Registrar may be restored administratively within 24 months of the strike-off date, following an application for restoration submitted to the Registrar Who may apply? The application for restoration may be filed by a director or a member of the company. What must accompany the application? For the purposes of the company meeting any outstanding requirements from before its strike-off date, the application must be accompanied by: 1. all outstanding filings including forms, reports, financial statements and documents due prior to the strike-off date; 2. any unpaid fees, charges, and/or fines for omissions that occurred and/or were imposed before the strike-off date; 3. a written consent from a competent representative of the Republic for the company's restoration, in the event that its assets and/or rights have been managed by the Republic; and 4. payment of a €20 fee, plus €20 if the procedure needs to be expedited. If satisfied that at the time of the strike-off, the company was offering services or was in operation, and all legal requirements relevant to the circumstances have been met, the Registrar will restore the company by re-registering it on Register and issue the restoration certificate. Following the restoration through the administrative route, the company is deemed to continue to exist as if it had not been struck off. This option is undoubtedly faster, more cost-effective, and simpler than going through the Courts. However, it is only available within 24 months from the date that the company was struck off the Register. Restoration by Court order At any point between 2 - 20 years after the strike off, a company may be restored by Court order. Who may apply to the Court? The application for restoration may be filed before the Court of competent jurisdiction by: 1. the company itself; and 2. any member or a creditor of the company that feels dissatisfied with the strike-off, or has suffered damage as a result of the company's actions prior to the strike...

    8 min
  8. Snapshot of key enforcement methods in the BVI Enforcement of foreign judgments Disclosure orders Interim remedies Methods of enforcement

    NOV 27

    Snapshot of key enforcement methods in the BVI Enforcement of foreign judgments Disclosure orders Interim remedies Methods of enforcement

    The enforcement toolkit available in the BVI is similar to many other common law jurisdictions. However, the BVI Courts have tailored their approach to meet the challenges a creditor may face when looking to enforce over a complex structure. While it has its own legal system, the BVI is a British Overseas Territory. It is therefore heavily influenced by judicial decisions made in England and Wales - widely recognised as one of the fairest jurisdictions in the world. Parties also have the added benefit of being able to appeal to the Privy Council, where Supreme Court judges regularly hear appeals from the BVI. This guide sets out a high-level overview of the areas in which we regularly assist our clients. Subject to certain criteria being met, BVI Courts can recognise many foreign Judgments and have strong legal frameworks in place in this regard. Drawing from both common law and statute, the Courts offer well tested and flexible procedures that are adaptable to global developments. Norwich Pharmacal Orders (NPOs) In the BVI it is not compulsory to make publicly available all company records, such as minutes of meetings and the decisions behind the minutes. However, they are kept by a "registered agent" located on the island. Sometimes companies do make these records available and for a small fee we can check the record. Alternatively, if there has been wrongdoing, the BVI Courts have a powerful weapon in being able to compel the registered agents (and other entities such as banks and internet service providers) to release information to your client identifying wrongdoers, proving wrongdoing or identifying assets for enforcement. NPOs can be accompanied by "seal and gag" orders meaning that if successful, the registered agent cannot tell its client that such an order has been made. Freezing injunctions Where there is a risk that assets or proceeds may be dissipated, BVI Courts are frequently used to grant freezing injunctions. These are a powerful tool to prevent any steps being taken to dissipate assets pending the outcome of the wider proceedings (even if those proceedings are in other jurisdictions). The requirements to obtain a freezing injunction are similar to other common law jurisdictions but are flexible so as to recognise the way assets are held in offshore jurisdictions. The BVI Courts have a statutory power to grant freezing injunctions in support of foreign proceedings which ensure that assets located in the BVI, including shares, are kept safe during the pendency of dispositive foreign litigation. This development is particularly helpful in the case of the BVI companies, as such companies typically conduct most or all of their business activities outside the BVI (such that the BVI may not be the most appropriate forum for asset recovery litigation). Charging orders BVI Courts have powers to grant charging orders over shares, property or other assets belonging to a debtor (to include beneficially ownership). If successful a charge will be imposed on a judgment debtor's assets. If the debt remains unsatisfied, further steps can be taken to enforce a sale of the charged asset to satisfy a judgment or other award. Garnishee orders Creditors can make an application to the BVI Courts for monies to be paid directly to them which are held by a third party. This method of enforcement is commonly used to take possession of funds held in a debtor's bank account. Appointment of a receiver One of the most powerful weapons in the BVI enforcement toolkit is the appointment of a receiver. Given offshore companies are often used as holding vehicles, receivership allows a receiver to take control of a corporate structure and move "downstream" to recover assets. In simple terms, a receiver can stand in the judgment debtor's shoes to gather in and realise property. This has the added advantage of immediately preventing a judgment debtor from dealing with that property.

    5 min
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About

Exploring Offshore Litigation is a captivating podcast series containing audio of written blog content that dives deep into the intriguing world of offshore litigation, including the BVI and Cayman. Each episode sails through complex legal waters, bringing you up-to-date analysis of recent high-stakes cases and expert commentary from the leading minds in this specialised field. Our episodes demystify legal jargon and break down complex cases to make them accessible to all. Harneys, an international law firm with entrepreneurial thinking, brings each episode to you.

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