Over the past year, there has been a notable increase in BVI related corporate disputes arbitrations.
In a recent arbitration under ICC rules, an emergency measures arbitrator was appointed to determine the issue of an injunction preventing a US$100 million shares rights issue in an oil exploration company. Harneys successfully acted for the respondent company in resisting the injunction. In another, very recent, BVI arbitration, the issue of arbitrability of corporate disputes is centre stage as is the capacity of a party to rely on an arbitration provision in a company’s Memorandum and Articles of Association.
The awards and subject matter are important as they deal with two key aspects of BVI commercial disputes, interim relief and shareholder remedies. It is common for shareholders’ agreements to supplement the Memorandum and Articles of Association, and Harneys has recently been involved in a number of high value BVI related arbitrations relating to corporate disputes, including unfair prejudice claims. Pursuant to section 184I of the BVI Business Companies Act, a member who considers that the affairs of the Company are being, or likely to be, conducted in a manner which is or likely to be oppressive, unfairly discriminatory or unfairly prejudicial, is entitled to apply to the court for relief. In circumstances where the shareholders agreement provides for dispute resolution by arbitration, it is the arbitral tribunal which is empowered to determine the issue of unfairness by reference to BVI law in relation to minority shareholder protection and the fiduciary duty of directors to act with proper purpose.
The BVI Arbitration Act is now some 6 years old and parties comfortable with dispute resolution in the BVI are increasingly seeing the benefits of opting for ad hoc BVI arbitrations as well as embedding appropriate clauses in commercial arrangements.