Knowledge

In this case the Board of the Privy Council (the "Board") confirmed that BVI shares are movables and that succession under foreign wills is governed by the deceased's domicile.

This case concerns the legal framework governing the transmission of shares in companies registered in the BVI after the death of their owner. The central issue of the case was whether such shares were to be considered immovable property under BVI law, which would mean their transmission would be subject to local laws, particularly the requirements of the Wills Act 1872.

The deceased, Sheikh Saoud Mohammed Al Thani (the "Sheikh"), owned shares in BVI companies but had a valid will under Qatari law, raising questions about the applicability of BVI law in this situation.

In terms of the facts, the Sheikh had made a declaration regarding his inheritance in Qatar, which was recorded in court. Following his death, the appellants, his widow and daughter, initiated proceedings in both Qatar and the BVI, seeking to revoke a declaration that was deemed a valid will under Qatari law.

The subsequent Qatari Court of Appeal affirmed the will’s validity, complicating the legal proceedings in the BVI where the appellants sought letters of administration without disclosing the existence of the will.

The key legal proceedings in the BVI focused on whether the appellants were estopped from disputing the will's validity due to the Qatari judgment, and whether BVI law classified the shares as movable or immovable property for succession purposes.

The rulings of the BVI courts emphasised that while the shares were registered in the BVI, they were to be treated as movable property under private international law, governed by the deceased’s domicile at the time of death, i.e. Qatar.

The BVI Court of Appeal concluded that the shares' situs was in the BVI for title purposes but categorised them as movable property for the purposes of succession, thus applying Qatari law to the issue of the validity of the will.

This interpretation aligns with established principles in private international law, which dictate that a deceased's movable estate is governed by the law of their domicile, while immovable property is governed by local law.

Conclusion

The Privy Council ultimately upheld the decisions of the lower courts, affirming that the shares in question were to be considered movable property and thus governed by Qatari law for succession purposes.

Key takeaways

This ruling emphasises the importance of understanding the intersection of local and international laws in estate matters and also highlights the complexities inherent in cross-border estate issues, particularly for international business structures in jurisdictions like the BVI.

The Board's decision also serves as a clear precedent for similar cases, ensuring that foreign wills can remain effective without the need for additional local instruments, thereby promoting legal certainty in the BVI's business environment. The ruling further reinforces the need for clarity in legal frameworks to protect foreign investors from unexpected legal obligations.