16 March 2011

Enforcing foreign judgments in the British Virgin Islands


Overview

Before enforcing a foreign judgment in the British Virgin Islands (BVI), it is important to consider whether the Defendant has assets within the jurisdiction against which a Claimant can enforce. There is little point in enforcing a foreign judgment if the Defendant does not have assets within the jurisdiction or is impecunious.
If there are assets in the BVI, the procedure for enforcement varies depending upon which country issued the originating judgment. There are two alternate options as follows:
a) The BVI has a simplified registration procedure for recognition of judgments obtained from the UK, New South Wales (Australia), Belize, Guyana, Nigeria and certain designated Caribbean territories. Upon registration, such foreign judgment may be enforced by the BVI High Court without re-examination of the merits of the case.
b) Foreign judgments from territories outside of the designated list are governed by case law, which also provides a straightforward alternative means of enforcement.

Simplified Procedure

The simplified registration procedure applies to judgments of the High Court of England and Wales, the Court of Session in Scotland, and the Courts of Northern Ireland, New South Wales (Australia), the Bahamas, Barbados, Bermuda, Belize, Guyana, Grenada, Jamaica, Nigeria, St
Lucia, St Vincent and Trinidad & Tobago.
The governing legislation is the Reciprocal Enforcement of Judgments Act (Cap 65) 1922 (the “1922 Act”).
Brief reference should also be made to the Foreign Judgments (Reciprocal Enforcement) Act (Cap 27) 1964 (the “1964 Act”). It is considered that the 1964 Act did not properly designate territories as required under the Act, and therefore has no effect. For this reason, the 1964 Act
is ignored for the remainder of this note.
In order to enforce a judgment under the 1922 Act, it is necessary to first “register” the judgment. There are four principle requirements for recognition and “registration” of a judgment under the 1922 Act:

  • The judgment or order must have been given by a Court in civil proceedings, and must be final and conclusive and for a fixed judgment sum, i.e. it must order a definite and fixed sum payable1;
  • The application must be made within 12 months of the judgment being handed down (or such longer period as the Court may allow)2;
  • The judgment debtor must not have appealed the judgment, or have the right or have expressed an intention to appeal3;
  • It must be “just and convenient” that the judgment should be enforced in the territory4.
    In addition to the above, it is also necessary to satisfy the further criteria listed below. The BVI High Court will not register a judgment if it is proven that:
  • The original Court acted without jurisdiction5; or
  • The judgment debtor was not properly served with process in the foreign territory and did not appear, or was a person who was not carrying
    on business nor ordinarily resident within the jurisdiction of the original Court, and did not voluntarily appear or submit to the jurisdiction of
    that Court6; or
  • The judgment was obtained by fraud7; or
  • The judgment was in respect of a cause of action which is against public policy, or for some other reason could not have been entertained by the BVI High Court8; or
  • The judgment is for penalties, fines or taxes, or similar fiscal obligation; or
  • The judgment was obtained in breach of “natural justice”.
    Any application for enforcement of a foreign judgment must be made to the BVI High Court under Part 72 of the Eastern Caribbean Supreme Court (ECSC) Civil Procedure Rules (CPR). One of the benefits of registration under the 1922 Act is that the application is made “without notice” to the Defendant. The application must be supported by evidence containing the following:
    a) An authenticated copy of the judgment; and
    b) Calculation of the interest that has become due under the law of the country in which judgment was given.

Effect of registration

Where a judgment is registered under the 1922 Act, it will have the following consequences9:

  • the judgment shall, from the date of registration, have the same force and effect as the original judgment, and proceedings may be taken upon it, as if it had been a judgment originally obtained on the date of registration in the BVI High Court;
  • the BVI High Court shall have the same control and jurisdiction over the judgment as it had over judgments given by itself, but only in so far as it relates to execution;
  • the reasonable incidental costs of registering the judgment (including the costs of obtaining a certified copy from the original Court and of the application for registration) are recoverable as if they were sums payable under the judgment.

Other Countries

The enforceability of a final and conclusive money judgment for a fixed sum from a country other than those falling within the 1922 Act is determined by case law. This also covers judgments of a lower Court of countries listed in the 1922 Act such as the English County Court.
The procedure remains relatively simple, but it requires suing on the foreign judgment itself with the requirement to give “notice” to the Defendant.
In such circumstances, the foreign judgment would typically be treated by the BVI High Court as the basis or evidence of a cause of action for a debt, so that no retrial of the issues is necessary. The foreign judgment is treated as a contract containing an implied promise to pay the judgment debt and the Claimant sues alleging breach of that contract10. A Claimant would usually apply to the BVI High Court to enter judgment or apply for summary judgment. If successful it would be usual for the BVI High Court to allow the Claimant to recover its reasonable legal costs in the BVI proceedings.
As the Claimant is proceeding by way of fresh action, the Claimant must first serve the proceedings on the Defendant in accordance with Part 5 and 7 of the ECSC CPR. This can present a barrier in circumstances where the Defendant has assets in the jurisdiction, but is actually
not resident within it. The existence of assets within the jurisdiction alone is not enough to establish jurisdiction. The ECSC CPR differs in this respect from the English CPR which contains such a power.
In addition, it would be necessary for the Claimant to comply with the same criteria specified for registration of a 1922 Act judgment, as detailed above.

Non-money judgements

Non-money judgments are typically not enforceable. This is because it would require the BVI High Court to police and supervise the terms of the original Order or judgment. However, it may be possible to obtain the same or similar relief from the BVI High Court in certain circumstances.
If a foreign judgment is not conclusive or the judgment is for a non-money sum, the Claimant may commence fresh proceedings in the BVI relying upon the foreign judgment and the original cause of action. In order to do this, the Claimant must have a cause of action under BVI law and be able to establish that the BVI Court has jurisdiction to hear the dispute. If proceedings are defended, the Claimant may seek to rely upon an “issue estoppel” in respect of the findings of fact by the foreign court to prevent a retrial of the issues. In this way, the Claimant
may in effect seek to establish a shortened route to enforcement.
Further there is a line of recent case authorities from the Privy Council11 and Canadian12 and Cayman Islands[]13] courts that support the argument that a non-money judgment should be enforceable. As at the date of writing such arguments have not been tested before the
BVI Courts.

Registering a BVI judgment in England and Wales

In the same way that an English judgment can be enforced in the BVI, it is possible to register and enforce a judgment of the BVI High Court in England & Wales, pursuant to the English Administration of Justice Act 1920 (the “1920 Act”). This is supplemented by Part 74 of the English Civil Procedure Rules.
Under the 1920 Act, such a judgment must inter alia be final, and be for a specific sum, not obtained by fraud or in breach of a jurisdiction or arbitration agreement. An application to register under the 1920 Act must be made within 12 months of the date of the judgment. Once
registered, a BVI judgment takes effect as if it were a judgment of the English Courts.
It is also possible to register judgments of inter alia the following countries in England & Wales under the 1920 Act: Anguilla, Antigua and Barbuda, Grenada, Dominica, Montserrat, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines (all countries falling within the BVI
Commercial Court jurisdiction and the Eastern Caribbean Supreme Court region). This note only partially lists the countries covered. There
are other countries listed in the 1920 Act, as well as other provisions governing recognition of foreign judgments in England and Wales contained in the Brussels and Lugano Conventions and The Foreign Judgments (Reciprocal Enforcement) Act 1933.

Footnotes

[1] s2(1) of the 1922 Act
[2] s3(1) of the 1922 Act
[3] s3(2)(e) of the 1922 Act
[4] s3(1) of the 1922 Act
[5] s3(2)(a) of the 1922 Act
[6] s3(2)(b) and © of the 1922 Act. Note: a BVI company shall only
be deemed resident in a foreign country if it is registered there as
a foreign company.
[7] s3(2)(d) of the 1922 Act
[8] s3(2)(f) of the 1922 Act
[9] s3(3) of the 1922 Act
[10] Known as the “doctrine of obligation by action”
[11] Pattni v Ali [2007] 2 AC 85 (Isle of Man)
[12] Pro Swing Inc v Elta Golf Inc [2006] 2 SCR
[13] Miller v Gianne and Redwood Hotel Investment
Corporation [2007] CILR 18

Authors

Niki Olympitis

Partner | British Virgin Islands

Litigation

Category: Article