Vol 20 (2023) - Issue 2

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Something to Prove? Creditor Standing and Public Policy Considerations: Hints of the Court’s Approach to Parallel Insolvency Proceedings in the BVI

Introduction
In a recent case, Nokian Shina LLC v Andrei Valerevich Smyshliaev & Ors, the BVI Commercial Court (the 'Court') considered whether public policy in the Virgin Islands (the 'BVI') would bar recognition of a foreign judgment in favour of a single creditor in circumstances where there are collective insolvency proceedings on foot elsewhere in which that creditor has proved. The Judge (Wallbank J) took the view (albeit that this aspect of his judgment is obiter) that public policy would not require that the Court refuse enforcement in such circumstances. The Judge's expressed view is of interest because it may provide some indication as to the way in which the Court may approach a different, but similar, question, namely, whether a creditor which has proved in a liquidation of a foreign company in the place of its incorporation may nevertheless petition for the winding up of the same company in the BVI.
This question is important in the BVI context because of the limited jurisdiction which the Court has to assist representatives appointed in foreign insolvency proceedings. Under the current law, assistance may be provided under Part XIX of the BVI Insolvency Act (the 'Act') only to foreign representatives appointed or authorised in foreign proceedings in 9 overseas countries and territories.2 Representatives from elsewhere may be recognised at common law but the Court does not have jurisdiction to provide assistance in such circumstances. Recognition, without assistance is, of course, of limited use. One work around would be if the foreign company could be placed into liquidation by the Court, so that its assets could be administered in parallel to the liquidation in that company's home jurisdiction in accordance with the principles of BVI law. But does that work, and if so, under what circumstances? And what approach would the Court take to such a secondary application?