|Keisha M Durham|
In JSC BTA Bank v Fidelity Corporate Services et al (a decision handed down on February 21 2011 by the Court of Appeal of the Eastern Caribbean Supreme Court on an appeal from a judgment of the High Court (Commercial Division) of the British Virgin Islands), the Court re-affirmed that the principles established in the English decisions of Norwich Pharmacal Co v Commissioners of Customs & Excise (1974); Ashworth Hospital Authority v MGN Ltd (2002); Banker's Trust Co v Shapira (1980); and Campaign Against Arms Trade v BAE Systems PLC (2007) forms part of the jurisdiction of the BVI courts. Such jurisdiction may be referred to as the Norwich Pharmacal-type jurisdiction.
More specifically, by virtue of the JSC BTA Bank case, the Court of Appeal has clarified and confirmed that where a BVI company has facilitated or otherwise become involved in wrongdoing, this renders the BVI-registered agent of that company, by virtue of its role in providing services to create and maintain such company, under a duty to disclose information through Norwich Pharmacal-type proceedings.
Registered agents of BVI companies are normally sought after by injured parties in the context of Norwich Pharmacal-type proceedings insofar as they are made discovery respondents to applications for relief in these types of proceedings. The Court of Appeal effectively justified this approach by confirming that registered agents in these types of proceedings "cannot on any view be considered as mere onlookers", but are "facilitators" albeit innocently mixed-up in the companies' wrongdoing.
The Court also highlighted that registered agents should expect that victims of fraud would seek them for the information that they may possess:
"... in due course the victims will come to them seeking discovery of the names and addresses and other information and documents that will enable the perpetrators to be discovered and misappropriated assets traced."
In addition, the Court of Appeal has also confirmed that in order for the Court to have the Norwich Pharmacal-type jurisdiction, two threshold requirements must be met. First, there must have been a wrong committed against the injured party seeking relief. Second, it must be demonstrated that the discovery respondent to an application pursuant to this jurisdiction of the Court must have facilitated or "become mixed-up" in the wrongdoing alleged by the applicant.
However, as this jurisdiction is a discretionary one, the mere establishment or existence of the same would not suffice in order for the Court to exercise such jurisdiction that it may have in an appropriate case. Accordingly, a further principle or factor must be applied in order to satisfy the Court that such jurisdiction, once established, should be exercised. This principle is that of necessity which, in this context, is necessity in the interests of justice for the Court to grant Norwich Pharmacal-type relief in light of all the circumstances.
The JSC BTA bank case, apart from confirming the Norwich Pharmacal-type jurisdiction which has been long recognised and exercised in the BVI, is also particularly noteworthy as it confirms that in the event BVI companies are used for the purpose of effecting fraud or some other wrongdoing, the registered agent(s) of such companies, by virtue of their very role in providing registered agent services, are considered to be "facilitators", albeit innocently mixed-up, in the commission of such fraud or wrongdoing.
Keisha M Durham