The Court of Appeal judgment in Antow Holdings Limited v Best Nation Investments Limited continues the development of the law regarding BVI directors' duties following the Independent Asset Management Company Ltd v Swiss Forfaiting Ltd appeal, which established – for the first time in the British Virgin Islands – clear guidance regarding the proper purpose test (for further details please see "Court of Appeal provides guidance on directors' powers").


Dismissing the appeal, the court agreed with the first-instance findings; in short:

  • the two series of transactions had not been undertaken by the directors of Best Nation:
    • honestly;
    • in good faith; and
    • in the best interests of the company; and
  • the directors had not exercised their powers for a proper purpose.

Under Section 120 of the Business Companies Act 2004, where a director has failed to consider the separate interest of the company at issue, their conduct will not be analysed by reference to the usual, broadly subjective test. Instead, the relevant test will be the objective Charterbridge test; namely, in the absence of considering the separate interest of the company, whether an intelligent and honest person in the role of director could, in the existing circumstances, have reasonably believed that the transaction was for the company's benefit. A director of multiple group companies is not entitled to sacrifice the interests of one company in favour of the interests of others within the group company structure.

Under Section 121 of the Business Companies Act, in considering the scope of the proper purpose, the substantial purpose test derived from Howard Smith Ltd v Ampol Petroleum Ltd and applied in Independent Asset Management is preferred. The Court of Appeal refused to proceed to apply the 'but for' test from Eclairs Group Limited v JKX Oil as it was clear on the facts that "there was one purpose and that purpose was improper".


The decision is arguably at the extreme end of the spectrum, with the Court of Appeal describing the motives of the Best Nation directors as being both self-serving and for personal advantage. Scenarios may arise in which the honest behaviour of directors wearing multiple hats may be called into question. To avoid an outcome in which the Charterbridge test is applied and directors are unable to rely on their subjective honesty as a defence, directors should separately consider the interests of each company and document their rationale for any transactions accordingly.

For further information on this topic please contact Andrew Thorp or Sarah Thompson at Harneys' Tortola office by telephone (+1 284 494 2233) or email ( or Alternatively, contact Jeremy Child at Harneys' London office by telephone (+44 20 7842 6080) or email ( The Harneys website can be accessed at

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