The BVI Courts appoint a receiver to take control of a PRC judgment debtor’s assets

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KEY TAKEAWAYS:

The first case of which we are aware where the BVI Court has recognised and enforced judgments from the People’s Republic of China
The order gives the court appointed receivers the ability to exercise shareholder voting rights and to take effective control of the BVI company by changing its board of directors
Confirmation of the BVI Court’s jurisdiction to appoint a post judgment receiver where there is a “hindrance or difficulty” in pursuing other methods of enforcement

A recent decision in the British Virgin Islands (“BVI”), BVIHC (Com) 0032 of 2018, is notable as being the first case of which we are aware where the BVI Court has recognised and enforced judgments from the People’s Republic of China (“PRC”) Courts (and may assist future applicants seeking reciprocal relief from the PRC Courts for recognition of BVI Court orders).

The case involved an application by a bank from the PRC for the appointment of post-judgment receivers by way of equitable execution over shares in a BVI company in order to enforce a multi-million dollar judgment debt.

Importantly, the order gives the court appointed receivers the ability to exercise shareholder voting rights and to take effective control of the BVI company by changing its board of directors (“Board”). This should enable the value of the shares to be maximised, and should therefore theoretically aid the enforcement of future judgments where assets are held in a BVI incorporated vehicle.

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Dispute Resolution Insolvency & Restructuring British Virgin Islands