The British Virgin Islands (BVI) has been described as the “natural, neutral and advantageous forum for arbitration” – it facilitates the quick, relatively inexpensive resolution of disputes by arbitration, preserves party autonomy, and offers flexibility to parties.
BVI is a group of islands in The Eastern Caribbean and is a well-known, highly regarded offshore financial services centre and an integral part of the global economy. BVI is home to companies which are used globally in joint ventures as holding companies for succession planning, trusts, wealth management and a range of other purposes.
BVI parties are increasingly involved in arbitrations globally. They comprise approximately 4.8 per cent of London Court of International Arbitration (LCIA) arbitrations and are third in nationality at the Hong Kong International Arbitration Centre (HKIAC) after Hong Kong and Mainland China.
There are several factors which make BVI an attractive and advantageous jurisdiction for international commercial dispute resolution. BVI is a British Overseas Territory which has an elected House of Assembly, a Cabinet of Ministers and a Governor appointed by Her Majesty The Queen as her representative. It has a stable government, a strong judiciary and adheres to the rule of law. Its financial services industry is built on sustained public-private sector cooperation, a commitment to innovation in legislation, systems and procedures, robust regulation, and adherence to international best practices. Indeed, in some respects, BVI leads in these.
The judiciary is supportive of arbitration and is not interventionist. BVI’s courts have affirmed a pro arbitration stance in several decisions. Additionally, the structure of the BVI legal system assures parties a high degree of legal certainty. BVI is a common law jurisdiction and has a hierarchical court system. It is part of the Eastern Caribbean Supreme Court system that covers the nine countries and territories of the Organization of Eastern Caribbean States (OECS). The BVI High Court has Commercial, Civil and Criminal divisions. Appeals from the High Court lie to the Eastern Caribbean Court of Appeal which sits in panels of three judges. There is a route of appeal from the Court of Appeal to The Privy Council in London where the judges are the same judges as those of the Supreme Court of The United Kingdom.
On the strength of these and other factors, BVI has become a preeminent jurisdiction for commercial dispute resolution. The establishment of the Commercial Division of the High Court in 2009, often referred to as the BVI Commercial Court, enhanced the work which had been previously done in the Civil Division of the High Court, and the diverse and experienced BVI Commercial Bar continues to grow.
It was a logical step, and one consistent with the history and development of the financial services sector in BVI, that a comprehensive legal framework was put in place to widen the dispute resolution framework in BVI.
In 2013, the House of Assembly passed The Arbitration Act, 2013 (the Act). The Act came into force in 2014 and replaced the Arbitration Act, 1976.
Among the most salient features of the Act are that it adopts the UNCITRAL Model Law on International Commercial Arbitration (the Model Law), adopted by the UN Commission on 21st June 1985 as amended by the UN Commission on 7 July 2010. The full text is outlined in a Schedule to the Act. Not only does it adopt the Model Law but there is a methodology showing clearly where provisions of the Act divert from the Model Law. This is important as it gives clarity internationally to what the BVI offers and sets accurate expectations for parties and their advisors choosing BVI for arbitration.
The Act establishes The BVI International Arbitration Centre (BVI IAC) as an independent not-for-profit arbitral institution with the purpose of meeting the demands of the international business community for a neutral, impartial, efficient and reliable dispute resolution institution.
An important feature of the Act is that it provides for the grant of interim remedies. The Act gives jurisdiction to the BVI courts to consider applications for interim measures in respect of arbitral proceedings which have been, or are being commenced, outside BVI as well as in BVI.
The Act has unique and robust provisions on confidentiality. In fact, BVI likely has the strongest arbitration confidentiality provisions anywhere. The BVI Arbitration Act prohibits publishing, disclosing or communicating information relating to arbitral proceedings and awards. Importantly, in addition BVI offers confidential court proceedings if and when arbitration matters are brought in court, whether to assist an arbitration or in an attempt to set aside an arbitral award or enforce an arbitration award. Arbitration-related court proceedings are heard in camera in closed proceedings; the court file is automatically sealed and cannot be inspected except by the parties, thereby preserving confidentiality. This is an important distinguishing feature of BVI Arbitration. For contracting or disputing parties concerned about confidentiality, there is no better seat than BVI.
On 25 May 2014, the New York Convention was extended to BVI, thereby allowing for the enforcement of Arbitral Awards in all States which have acceded to the Convention.
The Act is underpinned by The BVI IAC Arbitration Rules which came into force as from 16 November 2016. Five years later, on 16 November 2021, the BVI IAC Arbitration Rules which had been updated came into force.
The 2021 Rules have been described by John Beechy, the Chairman of the Board of The BVI IAC, as “a statement of intent for the future”. The 2021 Rules are “the result of a complete revision process to address the changing and future needs of arbitration users worldwide”. They are the work of a distinguished team experienced in arbitral practice, arbitral institutions and international best practice. The 2021 Rules strengthen the fabric of the provisions for international arbitration under the BVI IAC and add to the already existing important and unique features of BVI Arbitration.
The BVI IAC has a diverse Panel of over 200 international arbitrators who come from both civil law and common law backgrounds and are of over 40 different nationalities and speak more than 20 languages. The diversity of the Panel not only covers gender, race, language and geography but also includes both very experienced long-time arbitrators and up-and-coming arbitrators. While parties have a wide choice of arbitrators from the BVI IAC Panel, parties may appoint arbitrators of their choosing who are not on the BVI IAC’s Panel.
The BVI IAC is supported by the BVI Arbitration Group with members from BVI and around the world and promotes the understanding and use of arbitration in BVI and beyond.
A solid investment has been made in the establishment of a resilient bricks and mortar Arbitration Centre with world class physical, virtual and hybrid hearing facilities. There are several hearing rooms of different sizes which can be conveniently configured and which include leading audio-visual equipment. The state-of-the-art facilities and technology also support virtual and hybrid proceedings.
BVI is conveniently located and its time zone is convenient to parties in North, Central and South America as well as Europe and Africa. The BVI Courts, lawyers and other professionals are accustomed to, and regularly work with, different time zones including through virtual platforms.
There is an exemption from the requirement of obtaining a work permit for persons involved in arbitrations, whether as parties, arbitrators, counsel, witnesses or providing support services.
Arbitrations hosted by the BVI IAC need not be physically conducted in BVI and indeed can be conducted anywhere in the world.
The BVI IAC offers other arbitration related services including fundholding services for arbitrators irrespective of where they are located, assistance with administering ad hoc arbitrations and arbitrations under UNCITRAL or other rules and serving as an appointing authority for arbitrators.
The 2021 Rules, among other things, provide for:
The BVI IAC has signed The Green Pledge in affirmation of its commitment to The Campaign for Greener Arbitration and it has entered into cooperation agreements with The Chartered Institute of Arbitrators and The Hong Kong International Arbitration Centre.
The future bodes well for BVI as a natural, neutral forum for international commercial arbitration and for BVI as an important international dispute resolution centre.
Dancia Penn OBE QC
Dancia Penn is Queen's Counsel and a legal advisor in areas including commercial, corporate, civil, financial services, corporate governance and regulatory matters. Dancia is also an arbitrator and mediator; she serves as President of the BVI Arbitration Committee, and speaks regularly on arbitration, mediation, law and governance. She is also on the Roster of Arbitrators at Arbitration Place, Toronto and the Legal Services Panel of The Government of The Virgin Islands.