By Richard Baird, senior associate
The enforcement of foreign judgments in the British Virgin Islands has been made more accessible by an amendment to the “service out” provisions of the Civil Procedure Rules 2000. The amendment gave legislative force to the result reached in a recent judgment of the Eastern Caribbean Court of Appeal. The Court had held that the earlier version of the provisions contained a “draftsman’s error” which, if read strictly, would have impeded the ability of many creditors to enforce their foreign judgments in the BVI.
Prior to the amendment, rule 7.3(5) of the Civil Procedure Rules provided that a claim form to enforce a foreign judgment or arbitral award in the BVI could only be served out of the jurisdiction of the BVI High Court if the judgment or award was “registered in the High Court pursuant to Part 72” of the Civil Procedure Rules. Part 72 deals with the registration of judgments (including enforceable arbitral awards) under the Reciprocal Enforcement of Judgments Act 1922. Where a judgment is sought to be enforced at common law, registration under Part 72 is inapplicable.
This is significant because the Reciprocal Enforcement of Judgments Act applies to only 15 jurisdictions (England, Northern Ireland, Scotland, Bahamas, Barbados, Bermuda, Belize, Trinidad and Tobago, Nigeria, Grenada, Saint Lucia, Saint Vincent, Guyana, Jamaica and New South Wales). Where a creditor wishes to enforce a judgment from a different jurisdiction, enforcement at common law is the only means available. But if such a judgment cannot be registered under Part 72, and if the debtor is not situate within the jurisdiction of the BVI High Court (as will often be the case with foreign judgments), then how could the judgment ever be enforced in the BVI? The answer was critical to Westburg Anstalt, which sought to enforce a judgment of the Supreme Court of Liechtenstein.
The Court of Appeal’s answer was to read rule 7.3(5) as though the words “and registered in the High Court pursuant to Part 72” were not there. Describing those words as “mere surplusage”, the Court held that to insist upon the registration of a judgment that is incapable of registration was nonsensical and would defeat the intention of the legislators that such judgments should be amenable to enforcement in the BVI.
The Court was assisted in this interpretation by a further incongruity within the words of rule 7.3(5). Where a judgment has been registered under Part 72, it can be enforced in the BVI without the need to file a claim form in the BVI High Court at all. Instead, pursuant to rule 72.6, all that must be served on the debtor is notice of the registration (which can be served out of the jurisdiction without the need for leave). This incongruity lent support to the view that rule 7.3(5) was concerned with judgments for which a claim form is necessary, i.e. foreign judgments sought to be enforced at common law.
Following the Court’s decision, rule 7.3(5) was amended. A claim form to enforce a foreign judgment or arbitral award in the BVI can now be served out of the jurisdiction, with the Court’s permission, wherever the judgment or award “is amenable to be enforced at common law”.
This outcome provides valuable assistance to creditors seeking to enforce foreign judgments or arbitral awards in the BVI, especially where the debtor’s assets include shares in a BVI company. Under section 245 of the BVI Business Companies Act 2004, such shares are situate in the BVI. Accordingly, where the debtor is outside the jurisdiction and the judgment or award cannot be registered under Part 72, enforcement in the BVI will require service in accordance with rule 7.3(5). Thus, the new rule provides a more accessible gateway to the full gamut of enforcement mechanisms available under the Civil Procedure Rules.
