Country report: BVI hits the big time

The archipelago of the British Virgin Islands (the BVI) already scores highly in a setting which is second to none. Now, with the award of all commercial litigation business in the Eastern Caribbean to the BVI, and an impressive array of local legal resources, it is well placed to gain the regional crown in the field of international commercial litigation.

By Martin Mann QC

Little did I appreciate when I first flew into the BVI in 1987 to apply for an injunction on behalf of clients, how important and in many ways pivotal these beautiful islands would soon become as one of the leading offshore financial centres and as a forum in increasingly complex multi-jurisdictional international commercial litigation.

Road Town, Tortola, was a quiet place then. The court sat (as it still does) in an attractive colonial-style building housing the Legislative Council at the edge of a pleasant meadow, with a barely interrupted outlook to the sea. It seemed so unlikely a place to find oneself inserting a piece in a worldwide litigation jigsaw that had whisked me there en route to Grand Cayman, where commercial litigation had been a flourishing industry for years. I mused that being called to the Bar of the Eastern Caribbean Supreme Court (‘ECSC’) was a rare honour and a privilege. I did not then expect to return, still less that I would find myself doing so frequently in later years.

Reflecting on this brings into stark relief the remarkable changes I have witnessed in the BVI over the past 20 years or so – changes which, to my mind, fully justify the boast that the BVI is one of the truly ‘big players’ at the very top of the first division of the offshore financial centres league.

The springboard for the BVI’s success was the enactment of the International Business Companies (IBC) Act 1984. This had a snowballing effect on the number of company registrations in the islands, and was catalytic for the nascent financial services industry.

The sea meadow today has all but disappeared, built over with modern office blocks, shops, apartments and a marina, and the BVI is now home to something like 700,000 international business companies, including at least 1,500 mutual funds. The number of IBCs is remarkable, and speaks volumes for the international business community’s confidence in the integrity of the BVI, its governance, its regulatory authorities and its legal system.

In my experience, the legal system of the BVI has served the international community very well indeed. Commercial litigation is dealt with in the High Court – along with other categories of litigation as part of the ECSC, whose judges are drawn from applicants among practitioners and court officials in many of the Caribbean islands including Guyana and Belize.

Historically, the demands placed on judges in the BVI have imposed special burdens, as it has fallen to them to handle often complex international commercial cases as well as domestic civil and criminal cases. Appointees who in private practice might have had little experience of complex civil cases, still less international ones, have often experienced a difficult learning curve, yet they have generally performed well; many very well indeed. Likewise, the itinerant judges of the court of appeal of the ECSC, who have to balance the demands of civil and criminal business from many islands, not just the BVI. Despite this, I have always found the judges charming (even though they have not always been sympathetic!) and, so far as possible, accommodating whenever there has been a need to fix dates for important and sometimes urgent hearings.

This goes for the court staff too, at all levels, both in Tortola and in St. Lucia, where the court of appeal’s work is administered – illustrated in one mammoth interlocutory hearing before the court of appeal, in major worldwide litigation, with principal and satellite proceedings taking place simultaneously in many jurisdictions. A whole raft of legal glitterati (local, Bermudan, English, from the US and other places) had good cause to be thankful for the lengths the court service in Tortola went to and the co-operation it received from St. Lucia in ensuring the hearing could take place expeditiously and practicably in Tortola, where forum and other issues were being litigated, rather than anywhere else. The court room was completely transformed, almost overnight, with the stripping out of jury pews; the lining of walls with bookcases to hold the many hundreds of lever arch files that each party’s lawyers, as well as the court, needed to resort to; the provision of cabling and systems for internet and live-note connectivity; and so on. It was as impressive as it was seamless.

The BVI court has heard and ably disposed of a great deal of major international litigation over the years. I have had the privilege of being instructed in much of it. Many of my colleagues among the English Bar (in the main, Chancery and Commercial silks and juniors) have likewise. This has necessitated our being called to the Bar of the ECSC and working with the local Bar. I will not name the many individuals concerned or the law firms, as I do not wish to single any out for fear of leaving out others equally deserving of mention. What I will say is that I – and to the best of my knowledge all who have been afforded the opportunity to appear in the BVI – have invariably been made to feel welcome and found our local support teams resourceful and frequently invaluable. I would sum up my personal assessment of the legal resources that litigators have locally in the BVI as very considerable.

What then of the quality of justice that litigants can expect in the BVI, both at first instance and on appeal? This is, of course, an invidious self-posed question for me as I am still in practice. I have been impressed with the robustness of judges before whom I have appeared – in particular with the robustness of one judge, now retired, who unflinchingly required as a condition for the continuation of a worldwide freezing order obtained before another judge ex parte security of tens of millions of US dollars, which was bold by any stretch of the imagination. More recently, I have been impressed with the acuity of a judge confronted with quite complex insolvency issues that had likely not been argued hitherto in the BVI or elsewhere. The court of appeal under the guidance of The Honourable Chief Justice (Ag) Brian Alleyne SC is reportedly the strongest court of appeal for many years.

There has been talk for some time now of the way ahead for the handling of commercial litigation in the BVI, whether given the volume of court business, its complexity and importance and the frequent need for immediate access, a dedicated commercial court needs to be set up within or outside the existing structure of the ECSC. The BVI government has engaged in this, including commissioning a study into the viability of a number of options for change led by Richard Cornes of the Department of Law at Essex University. In light of the study’s conclusions (which I hasten to add I have not seen), the ECSC is apparently to trial a divisional system within the existing structure with a dedicated commercial court based in the BVI. This is not the preferred option of all the BVI legal profession (although respected members of the local Bar have informed me this is their preferred option), but it is important recognition of the pre-eminence of the BVI as the premier centre for commercial litigation within the ECSC – and should result in the channelling of adequate financial resources to the commercial court to meet the needs of court, the legal community and consumers. Whether the divisional system will serve will remain an open question until it is established that a unitary court of appeal will be accessible at short notice whenever its assistance is required, irrespective of its other business.

In future, the challenges will be to ensure BVI law and its court system meet international demands, and particularly that the BVI’s success is not put at risk through complacency. I am happy to say I have seen no evidence of this as yet. To the contrary, with a rash of new legislation in recent years such as VISTA (‘The Virgin Islands Special Trusts Act’), new companies and insolvency legislation, all designed to be ‘consumer friendly’, together with friendly relations with the OECD, all the signs are that the drivers to stay ahead of the competition are well and truly understood and in safe hands under the leadership of Dr Orlando Smith (chief minister) and the guidance of individuals such as Lorna Smith (executive director of the BVI International Finance Centre) and Robert Mathavious (managing director and chief executive officer of the BVI Financial Services Commission) – underpinned by the vigilance and advice of interested groups, including a long and impressive list of local lobbyists within the financial services industry and the legal profession.

So far as the legal profession is concerned, the steady stream of major law firms set up in the BVI in recent years (Walkers, Maples and Calder, Conyers Dill & Pearman and Appleby Spurling Hunter, from Grand Cayman and Bermuda) is corroboration of the BVI’s high international profile. These firms, and the many BVI firms (including long-established firms like J. S. Archibald & Co., Farara George-Creque & Kerins, Harney Westwood & Riegels, O’Neal Webster, Price Findlay & Co, McWelling Todman & Co, Walker Smiths) and recent entrants (such as Forbes Hare) all have a common interest in the BVI’s success. This is a formidable list of lobbyists, who together represent most, perhaps all, of the largest international law firms and accountants. They can be relied on to police the user-friendliness of the court system and to point out and lobby for the elimination of any weakness that appear.