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11 May 2018
Claims of passing off are rare in the British Virgin Islands and a recent attempt to bring a BVI action in relation to goodwill held outside the jurisdiction has failed.(1)
The claimants were Egyptian private equity investors with over $516 million in assets under management and a long, respected track record in development and management of various investment projects in the Egyptian market.
The defendants included a former employee of the claimants and the companies through which he operated.
Having left the employment of the claimants, the former employee sought to establish his own BVI fund and prepared a draft presentation in this regard. The claimants argued that the draft presentation made several misrepresentations regarding a number of successful investment projects in their portfolio, which would cause the public to believe that the former employee was involved in the success of these projects, which could not be attributed to him but to the investment management team. The claimants argued that this amounted to a misrepresentation of their goodwill or track record, which could cause confusion in the marketplace, as well as loss and damages.
The court examined the law and relevant English authorities on the tort of passing off. It opined that goodwill is governed by territoriality and that in order to succeed, the claimant must prove that it has goodwill in the form of customers in the jurisdiction in which the suit is undertaken. Thus, even on the assumption that the claimants' allegations were true, the lack of any claim that breaches took place or were threatened in the British Virgin Islands was fatal to the claimants' case, which should be struck out.
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