Litigation lawyers welcome Commercial Court

The establishment of a dedicated commercial court in the BVI is testament to the jurisdiction’s growing prominence and sophistication as an international financial centre.

The legal community in the BVI has been pushing for a specialist court to hear financial and corporate disputes for some time. “The local courts were not serving the needs of the financial community. The judges in the BVI did not come from a commercial background, which meant cases took longer to be heard and many decisions were appealed. We needed a court dedicated to commercial disputes with judges who are experts in the field,” says Michael Fay, a partner at Ogier specialising in litigation.

The BVI government proved responsive to the concerns of local lawyers. In 2006 it commissioned a team from Essex University to produce a report on the court system in the BVI and make recommendations regarding the creation of a commercial court. Based on this report the decision was taken to establish the Commercial Division of the East Caribbean Supreme Court in the BVI.

The court will hear cases from the nine member jurisdictions of the Organisation of East Caribbean States, although the majority of cases are expected to involve BVI companies.

Earlier this year Edward Bannister QC was sworn in as the presiding judge of the BVI commercial court. A highly respected lawyer, Bannister has specialised in company, insolvency and commercial litigation since being called to the Bar in 1974. He is expected to start hearing cases at the BVI commercial court in May.

Fay welcomes the establishment of the court and the appointment of Bannister as its presiding judge. “It will lead to quicker, more predictable decisions in commercial disputes and create more confidence in the BVI legal system,” he says. 

Lawyers say the timing could not be better. While the number of big-ticket shareholder disputes is likely to fall due to the economic downturn, BVI lawyers expect a wave of investment fund-related litigation in the coming months.

Many local law firms, including Conyers, Appleby and Maples & Calder plan to add new hires to their litigation teams to handle the anticipated influx of disputes.

The commercial court will hear cases relating to the rights of shareholders in hedge funds and the powers of directors to suspend redemptions or impose gates and side pockets. The BVI courts have already been called upon to adjudicate on redemptions disputes, including one case where the fund sought to redeem an investor in securities rather than cash.

Mark Forte, a partner at Conyers, believes the commercial court will be called upon to adjudicate some complex and substantive matters. “The underlying trend in recent years has been towards more substantial investment through BVI companies. This has led to more disputes involving sophisticated clients and greater use of BVI counsel for substantive matters,” he says.

Fay believes the establishment of a dedicated commercial court in the BVI will set a precedent in the offshore world. “It will be a major attribute to the BVI, and other jurisdictions are already thinking about following suit.”