One of the claims brought by the liquidators of Bilta (see Part 1 above for the factual background) was a claim under section 213 of the English Insolvency Act. That section provides that where the business of a company being wound up was carried on with any fraudulent purpose the court may declare that any persons who were knowingly parties to the carrying on of the business are to be liable to contribute to the company’s assets.
Jetivia and its chief executive argued that the English court had no jurisdiction, in relation to a claim under section 213, over any acts outside England by persons who were not resident in England.
The argument was doomed to fail, and was dismissed by the Court. Recent case law clearly favours the court conducting the winding up of a company having wide powers to assist in realising and protecting the company’s assets for the benefit of creditors. Section 213 did therefore apply to acts outside England by non-residents. The Court also referred to other provisions of the English Act which had extra-territorial effect. The same approach will apply to the BVI court: the Privy Council held in Stichting Shell Pensioenfonds v Krys [2015] 2 WLR 289 that the BVI court claims a worldwide jurisdiction in the winding up of a BVI company.
Many of the provisions of the BVI Insolvency Act 2003 were modelled on, or are similar to, those that appear in the English Act. When considering the provisions of the BVI Act, therefore, unless the context indicates otherwise, the starting point is likely to be that the provision is intended to have worldwide effect. This includes section 284 (applications to examine persons before court in relation to the company’s affairs). It is welcome to have this clarification: in the case of BVI companies key players are often outside the jurisdiction.
