On April 10 2003 a new Insolvency Bill received its first reading in the British Virgin Islands (BVI). At the time of writing copies of the Bill were not available but previous drafts have been circulated and the government has engaged in extensive discussions with the private sector over the past two years. It is therefore possible to predict with a fair degree of certainty the likely provisions of the Bill.
The Bill is evolutionary rather than revolutionary and clearly owes a great deal to the English Insolvency Act of 1986. However, in recognizing that the BVI must remain a jurisdiction in which financial institutions want to do business, the Bill diverges sharply from the policy taken by the UK since 1986 and retains a strongly pro-creditor flavour.
Expected elements include netting legislation based on the latest Isda Model Law, the introduction of administrative receivership and an administration procedure. Cross-border issues are at the heart of the Bill and it introduces a full regime for the licensing of insolvency practitioners. Preferences and other voidable transactions are to have an emphasis on short vulnerability periods for unconnected parties and commercially reasonable criteria.
More detailed analysis of the Bill will follow in subsequent issues.