25 September 2018
Carey Olsen acts for successful appellants in important 'forum non conveniens' BVI Court of Appeal decision
Offshore law firm Carey Olsen has acted for successful appellants in the British Virgin Islands (BVI) Court of Appeal, which has overturned the first instance decision of the BVI High Court (Commercial Division), in connection with claims alleging multimillion-dollar fraud purportedly involving a number of companies in the BVI. Carey Olsen's clients successfully argued that Russia was the appropriate forum for the hearing of the dispute.
The appeal concerned claims brought in the BVI by JSC MCC Eurochem, a company incorporated in Russia, and its Swiss affiliate (together "Eurochem"). Eurochem alleged that certain senior members of its sales team had set up a web of companies in the BVI, Panama, Cyprus and Scotland for the sole purpose of receiving, concealing and laundering the proceeds of over US$45 million in secret commission payments from Eurochem's trading partners.
Eurochem issued proceedings in the BVI against the (now former) members of the sales team, the alleged bribe payers and the companies who were alleged to have received bribes. A number of the defendants applied to get those proceedings struck out or stayed on the basis that BVI was not the appropriate forum to hear the dispute. That argument was rejected at first instance.
However, in its judgment of September 2018, the Court of Appeal reversed the first instance decision and found that the Courts of the Russian Federation are the more appropriate forum to hear the proceedings.
Partner Ben Mays, head of Carey Olsen's litigation and insolvency team in the BVI, said: "In its judgment, the Court of Appeal has provided a useful and timely clarification of the rules governing forum and jurisdiction challenges and reiterated that that the mere existence of a BVI incorporated company as a respondent to a claim which, as the Court of Appeal puts it, otherwise 'has nothing to do with this jurisdiction' is not, in itself, a determining factor of whether the BVI Court will accept jurisdiction."
Carey Olsen has one of the largest dispute resolution and insolvency practices in the offshore legal field led by 17 partners across nine international offices.
Mr Mays and senior associate Andrew Chissick acted for six of the appellants in the proceedings, instructing Stephen Moverley Smith QC of XXIV Old Buildings.
To read more on this case, please view our briefing: Forum non conveniens – an important clarification by the BVI Court of Appeal.