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21 March 2019
In the recent ex tempore judgment in Q v R Corp, Justice Wallbank clarified the BVI Commercial Court's power to grant Norwich Pharmacal disclosure orders in support of foreign proceedings. The judgment was given on a successful application for Norwich Pharmacal relief to assist Brazilian clients to bring claims for the recovery of misappropriated assets.
The court's power to grant Norwich Pharmacal disclosure orders in support of foreign proceedings was brought into question by Justice Flaux's decision in the English High Court case Ramilos Trading v Buyanovsky. In Ramilos, it was held that, among others, the Evidence (Proceedings in Other Jurisdictions) Act 1975 excluded the court's power to grant a Norwich Pharmacal disclosure order to assist with foreign proceedings.
In his judgment, Flaux also cited an excerpt from the original Norwich Pharmacal case, stating that the duty which obliged disclosure by a party innocently caught up in the wrongdoing of another was in fact a duty that lay "on the Court to make an order necessary to the administration of justice [rather] than on the respondent to satisfy some right existing in the plaintiff".
Wallbank held that the BVI courts would not follow the Ramilos decision as it construes the Norwich Pharmacal jurisdiction too narrowly. He also parted ways from the House of Lords' decision in Norwich Pharmacal and Lord Kilbrandon's approval of Colonial Government v Tatham, and held that an innocent party comes under a duty to assist before the court is involved; however, the party has the right to seek confirmation from the court before doing so, especially in a jurisdiction such as the British Virgin Islands where the respondent is often a registered agent who is under a duty of confidentiality. Unusually, Wallbank expressly ordered that the ratio for his decision be unsealed and circulated to provide guidance on the issues raised in Ramilos.
Wallbank's guidance is to be welcomed, as the Ramilos decision had the potential to restrict the availability of Norwich Pharmacal relief – an important tool in the fight against international fraud and a force for transparency in the British Virgin Islands, as a sizeable proportion of all Norwich Pharmacal applications before the Commercial Court are made in support of proceedings intended to be brought in other jurisdictions. The decision confirms the British Virgin Islands as a particularly helpful jurisdiction in the fight against international fraud and the recovery of misappropriated assets.
For further information on this topic please contact Stuart Cullen or Romane Duncan at Harneys' Tortola office by telephone (+1 284 494 2233 ) or email (firstname.lastname@example.org or email@example.com). Alternatively, contact Ian Mann at Harneys' Hong Kong office by telephone (+852 5806 7800) or email (firstname.lastname@example.org). The Harneys website can be accessed at www.harneys.com.
Phillip Kite, Partner at Harneys, is an additional author of this article.
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