Introduction

Clients often find themselves with the benefit of foreign judgments and arbitral awards which they wish to enforce against corporate defendants in the BVI. In this note we provide a brief overview of the rules relating to such enforcement, which we hope will be of assistance and go some way to demystifying a complex area of law and procedure. Please do let us know if we can assist you with your matter.

Money Judgments

Reciprocal Enforcement of Judgments Act 1922

This provides a straightforward mechanism for the registration and enforcement of final and conclusive money judgments for a definite sum that have been made by the High Court in England and Wales, Northern Ireland, Barbados, Bahamas, Bermuda, Belize, Guyana, Grenada, Jamaica, New South Wales, Australia, Nigeria, St Lucia, St Vincent, Trinidad and Tobago and the Court of Session in Scotland. Subject to fulfilling procedural requirements, the Court will not look behind the judgment and will register the same as a judgment of the BVI High Court. An application for registration under this legislation should be made within 12 months of the relevant judgment (subject to the Court’s discretion to permit a longer period). 

The Foreign Judgments (Reciprocal Enforcement) Act 1964

While this statute was enacted and said to apply to certain designated jurisdictions, the prevailing view is that the purported designation was not carried out properly and that the Act has, therefore, not been effectively extended to any jurisdiction.

Common Law

Only money judgments are enforceable as final and conclusive judgments at common law. Non-money judgments are not enforceable under the doctrine of obligation by action. However, a non-money judgment based on a BVI-recognised cause of action may allow a fresh claim to be brought and potentially be determined by summary judgment based on principles of equitable estoppel.

A common law claim is commenced under EC CPR Part 8 via a claim form and statement of claim. An affidavit must accompany the filing, exhibiting a certified copy of the foreign judgment and, if applicable, a certified English translation. The judgment debtor has 14 or 35 days to acknowledge service and 28 or 56 days to file a defence, depending on whether they are within or outside the jurisdiction. Following service, the judgment creditor may file for default judgment (if no response or defence is filed) or summary judgment, supported by an affidavit detailing the steps taken to secure the foreign judgment and the debtor’s involvement in those proceedings.

While the BVI court will not re-examine the merits of the foreign judgment (except in limited circumstances), the common law debt claim process is generally quick and efficient. Once a judgment is registered or granted based on a common law debt claim, it can be enforced like any other BVI judgment.

Non-money judgments

Unlike in England and Wales, non-monetary judgments may also be indirectly enforced in the BVI at common law. If the judgment creditor can establish that the foreign judgment is based on a BVI-recognised cause of action and that the BVI court has jurisdiction over the debtor, a fresh claim may be brought. The foreign judgment and the principles of estoppel may then be used to prevent re-litigation of the same issue or cause of action.

To succeed, the BVI claim must involve the identical issue or question determined in the original proceedings and the same parties. While indirect enforcement is less straightforward, it can save time and costs by avoiding re-litigation of the issues.

Restrictions on enforcement at common law

• The judgment must have been made in a court which had jurisdiction, and the judgment debtor must have either submitted to the jurisdiction of that court or have been resident or carrying on business within that jurisdiction, and have been duly served with process;

• The judgment given by the court must not have been in respect of penalties, taxes, fines, or similar fiscal or revenue obligations of the debtor;

• In obtaining judgment there must not have been any fraud on the part of the person in whose favour the judgment was given, or on the part of the court;

• The BVI Court must be satisfied that recognition or enforcement of the judgment in the BVI would not be contrary to public policy; and

• The BVI Court must be satisfied that the proceedings pursuant to which the judgment was obtained are not contrary to natural justice.

Enforcing arbitral awards in the BVI

The BVI has made significant strides over the past decade in developing and promoting its role in international arbitration. The BVI Arbitration Act 2013, modelled on the UNCITRAL Model Law, came into effect on 1 October 2014. The BVI International Arbitration Centre was opened in November 2016 and adopted rules based on the 2010 UNCITRAL Arbitration Rules.

The BVI acceded to the 1958 New York Convention on 25 May 2014 (the “NYC”), and the Arbitration Act, together with the Eastern Caribbean Supreme Court Civil Procedure Rules 2000 (EC CPR), provides a streamlined process for recognising and enforcing awards.

Recognition and enforcement of NYC Awards

Convention awards can be recognised and enforced in the BVI by either:

• Commencing an action in the BVI Court and suing on the arbitral award;

• Commencing an action seeking recognition and leave to enforce the award. Such an action may be pursued on an ex parte basis, but must be supported by affidavit evidence that:

1.    Exhibits the duly authenticated original or a certified copy of the original award (or certified translation if not in English);

2.    Exhibits the original or a duly certified copy of the arbitration agreement;

3.    Provides an address for service on the person against whom the applicant seeks to enforce the award (the respondent); and

4.    Certifies the amount remaining due, if the award is for the payment of money.

Once an award is recognised, the award is enforceable in the same manner as a judgment or order of the BVI Court.  Before enforcement can proceed, the resulting order must be served on the respondent.

Grounds for refusing recognition or enforcement

The scope for challenging a Convention award is narrower than for challenging enforcement of a non-Convention award. The grounds for refusing enforcement of a Convention award are narrowly defined under Section 86 of the Arbitration Act and align with the defences provided in the NYC. These are:

1. The incapacity of a party to the arbitration agreement;

2. The invalidity of the arbitration agreement;

3.  A lack of proper notice of the arbitration or appointment of the arbitrator, or where a party was unable to present their case;

4. The award deals with matters that do not fall properly within the scope of the arbitration;

5. The composition of the arbitral tribunal or the procedure employed was not in accordance with the agreement of the parties or the law of the country where the arbitration took place; or

6. Where the award is not yet binding on the parties, or it has been set aside or suspended in the jurisdiction in which it was made.

The burden of proof is on the party against whom the award has been made to show that one or more of the above grounds applies.

Enforcement may also be refused if the Court finds that the subject matter of the award is not capable of settlement by arbitration under BVI law, or if the award contravenes the public policy of the BVI.

Enforcement options

There are a number of enforcement mechanisms that are available in the BVI. These include:

• Charging orders (EC CPR Part 48);

• Judgment summons (EC CPR Part 52);

• Appointment of a receiver (EC CPR Part 51);

• Orders for the seizure and sale of goods (EC CPR Par 46);

• Garnishee orders (EC CPR Part 50); and

• The service of a statutory demand (and thereafter making an application to appoint a liquidator over a defendant company).

Conclusion

CANDEY is a boutique international litigation law firm that has extensive experience and resources to evaluate and conduct the enforcement of BVI judgments and arbitral awards successfully. We can guide our clients through the enforcement process, particularly assessing early on the difficult procedural challenges that such enforcement involves.

If you have any questions or require any assistance in relation to the above please do not hesitate to contact David Harby (dharby@candey.com), a partner in our BVI office.

Note: This is a general summary of an evolving field of law, and is made available for general discussion purposes only between CANDEY and its clients and prospective clients. This memorandum does not constitute legal advice and must not be relied on as such. It should also not be cited as legal or academic authority.