BVI offers international arbitration forum

BVI Arbitration: The Landscape

The BVI Act provides arbitral tribunals with broad jurisdiction. It includes, for example, the ability to determine its own jurisdiction (based on the globally recognised competence-competence principle), to order interim measures and make orders in support of arbitration. The Act is based on the UNCITRAL Model Law, and the BVI IAC Rules are based on  the 2010  UNCITRAL Arbitration Rules. As such, the rules and procedure of BVI arbitration will be familiar to international arbitrators in other jurisdictions. Further, parties are free to incorporate other institutional rules into their arbitration agreements if they wish. For instance, parties to a Hong Kong related dispute might prefer to use the rules of the Hong Kong International Arbitration Centre. The BVIIAC allows for such flexibility.

The Act recognises fundamental arbitration principles, such as the principle of confidentiality. Unless the parties agree otherwise, all the information related to a BVI arbitral proceeding is confidential, which means that it cannot be published, disclosed, or communicated to third parties. This is becoming more and more attractive in international dispute resolution. Indeed, the BVI Commercial Court has, in recent years, seen an increased wish from some parties engaged in litigation to move away from principles of “open justice” to seeking hearings in private, sealed Court files, and “confidentiality clubs” regarding certain sensitive information. It will be interesting to see if this trend leads to an increase in the arbitration of BVI disputes in the next few years.

In line with the UNCITRAL Model Law, the Court's jurisdiction to set aside an arbitral award is very limited. Further, unless the parties agree otherwise, BVI arbitral awards are final. However, the parties may choose to opt-in to certain provisions and permit the BVI Commercial Court to exercise additional supervisory jurisdiction over the conduct of an arbitration. These include, among others, the ability to apply to the court: (i) for an order to consolidate arbitrations; (ii) to determine questions of law arising in the arbitration where doing so might result in substantial cost savings to the parties; (iii) to challenge the award on the ground of serious irregularity. 

In general, the arbitral process in the BVI is intended to be conducted with minimal interference from the judicial system. However, the BVI Courts have jurisdiction to give interim relief to support the arbitration process if case required. For instance, the BVI Court may grant injunctive relief in relation to any arbitral proceedings which have been or are to be commenced in or outside of the BVI pursuant to section 43 of the Act. This is a very powerful tool to help preserve assets and evidence. Indeed, relief in support of foreign arbitrations and the enforcement of arbitration awards is a major part of BVI litigation. 

Enforcement Of Arbitral Awards

The accession of the BVI to the New York Convention effectively serves to facilitate the enforcement of foreign awards in the country and strengthens the BVI's position in the international arbitration arena. As the BVI Commercial Court stated in PT Ventures SGPS SA v Vidatel Ltd, “the general approach to enforcement of an award should be pro-enforcement”.[2] As such, there must be good reasons for refusing to enforce a New York Convention award. Enforcement of arbitral awards in the BVI is generally swift and straightforward and can be initiated on an ex parte basis. Once the award is enforced, it is treated as equivalent to a judgment of the BVI court and all local enforcement measures against assets located in the BVI are available to the applicant; for example: charging orders, orders for the seizure and sale of goods and the appointment of a receiver.

Accordingly, some of the BVI’s major litigation in the Commercial Court relates to the enforcement of foreign arbitral awards and attempts to seek remedies against the assets of BVI companies. For instance, Carey Olsen and other leading BVI law firms are currently involved in a very high profile dispute regarding the enforcement of a US$6 billion dollar International Centre for Settlement of Investment Disputes (ICSID) arbitral award against the Islamic Republic of Pakistan by an Australian copper mining company

The Future Of BVI Arbitration

The BVI Courts are busy with cases relating to arbitration but despite its excellent facilities and strong and attractive rules and procedures, the BVIIAC has been relatively quiet since its inception. It is no secret that there have been few major arbitrations in the BVI since 2016. Litigation dominates. A major reason for this is that historically parties to commercial transactions have rarely included a BVI arbitration clause in their agreements. This may change in the future, and/or parties to a dispute may later choose to arbitrate rather than litigate (for reasons of confidentiality or otherwise). This may bring more arbitrations to the BVI, though other more established seats of arbitration such as London, Paris, New York and Singapore will still be vying for such business.

The BVIIAC may develop to become a vibrant hub for the resolution of local Caribbean disputes by way of arbitration, being the only kind in the region and with world class facilities. It may also become a neutral territory for parties located in North and South America seeing as it is geographically located between the two. Improved transport links in the region would certainly assist with this development. However, the BVIIAC certainly aims to be more ambitious and spread its wings further afield, engaging in disputes from Asia and elsewhere. The global COVID-19 pandemic has taught all legal practitioners that with virtual hearings and improved technology, geography and location  are no longer as important as  they used to be. The BVI judicial system and the BVIIAC have easily adapted to online hearings and case management and are well-equipped technically to use this experience in the future. As such, we expect an increase in BVI arbitration cases in the next few years, though BVI litigation is still likely to retain pole position.