Following the Black Swan decision the British Virgin Islands (BVI) Court has exercised a power to grant free-standing injunctions to safeguard assets in support of foreign proceedings. 

Most recently in Natali Osetinskaya v. Usilett Properties Inc (BVI HCV0037/2013) the BVI Court decided it was not necessary for the assets of the BVI respondent company also to be situate within the BVI. It was important in Usilett that the relevant assets of the wrongdoer were in reality the shares in BVI companies. These were the respondents to the Black Swan application, where the Judge noted "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."

The BVI Arbitration Act (the Act) came into force on 1 October 2014 and is an important piece of legislation. The Act has limited the court's role where parties agree to an arbitration although this was the subject of previous BVI common law where the court tended to give a wide ambit to arbitration provisions and therefore stay BVI High Court cases (see for example, Ennio Zanotti v. Interlog Finance Corp & Others (BVI HCV2009/034). However, an additional and important power to grant interim relief is included in the Act.

Section 43(2) of the Act, gives the BVI Court power to grant an interim measure in relation to any arbitral proceedings whether or not these have been or are yet to be commenced in or outside the BVI. Accordingly, the BVI Court has the power to grant injunctions in support of arbitration proceedings which have not commenced, although the BVI Court would probably require a Letter of Request in draft form and/or may insist on an undertaking to file the claim promptly.

There are a number of statutory requirements for the grant of an interim measure, including, importantly, that the BVI might refuse an order where an interim measure is currently the subject of arbitration proceedings and the court considers it more appropriate for the interim relief to be dealt with by the Tribunal. Of course, each case will be dealt with on its own facts, but often (as in many Black Swan cases), a target of an injunction will be companies who may not be parties to the arbitration agreements. Accordingly, the powers in Section 43 provide a powerful tool for parties in foreign arbitrations to seek interim relief to assist the arbitration process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.