BVI Financial Services Commission expands list of "relevant foreign countries" under Part XIX of the Insolvency Act 2003

In great news, the BVI Financial Services Commission has, as of 18 September 2024, added over 20 countries to the list of "relevant foreign countries" under Part XIX of the BVI Insolvency Act 2003.

What is Part XIX of the BVI Insolvency Act?

Part XIX is the statutory regime for seeking "assistance" for foreign insolvency proceedings in the BVI.

Under Part XIX, "foreign representatives" (in practice, insolvency officeholders) from a list of designated countries may apply to the BVI courts for a range of remedies (which are set out in Part XIX). The most common remedy is to enable the foreign representative to gain control of assets and take other steps to secure property and information within the BVI in support of the foreign insolvency proceedings.

Part XIX gives foreign representatives from "relevant foreign countries" an express right to apply to the BVI courts for assistance through BVI court orders.

Which countries are now "relevant foreign countries" under Part XIX?

Before the expansion of the list, "relevant foreign countries" referred to only nine jurisdictions: Australia, Canada, Finland, Hong Kong, Japan, Jersey, New Zealand, United Kingdom, and United States of America.

The BVI Financial Services Commission has now added over 20 additional countries to the list. They are:

• Bahamas;
• Barbados;
• Belize;
• Bermuda;
• Cayman Islands;
• Guernsey;
• Guyana;
• Ireland;
• Isle of Man;
• Jamaica;
• Member States and Territories within the Organisation of Eastern Caribbean States (the OECS, comprising Anguilla, Antigua and Barbuda, Dominica, Grenada, Guadeloupe, Martinique, Montserrat, Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines);
• Nigeria;
• Singapore;
• Trinidad and Tobago; and
• Turks and Caicos Islands.

What does this significant development mean?

In Net International Property Limited v Erez (22 February 2021), the BVI Court of Appeal held that the intention of Part XIX is to "provide a complete code for foreign representatives to apply to the BVI courts for assistance in cross-border insolvency matters such that foreign representatives from non-scheduled countries are unable to obtain assistance". 

The expansion of the list now allows even more foreign representatives to access the Part XIX streamlined assistance from the BVI courts.  This creditor friendly initiative provides benefit to a greater number of multi-jurisdictional proceedings, where there will be easier administration between the BVI courts, foreign representatives and the respective proceedings.  It demonstrates the jurisdiction's commitment to being a "place to do business" and brings the BVI into line with its offshore rivals.

What rights exists for countries not included in the list of "relevant foreign countries" under Part XIX?

For foreign representatives from countries that are not scheduled in the list of "relevant foreign countries", the common law right of recognition survives in the BVI.  That common law right may provide recognition but does not, though, carry the right of assistance from the BVI courts. 

Therefore, without the Part XIX rights, there is often only limited benefit in obtaining (common law) recognition from the BVI courts.

If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.