Picard, a trustee in bankruptcy, launched proceedings under the anti-avoidance provisions of the US Bankruptcy Code against Vizcaya, a BVI investment fund which had invested approximately $330m with Bernard Madoff via his New York firm. Prior to his fraud being discovered in late 2008, Vizcaya had been repaid $180m.Picard obtained a judgment against Vizcaya and its shareholders in the New York Bankruptcy Court. The judgment against Vizcaya was for $180m, $74m of which had been transferred to its Gibraltar holdings. Following the New York judgment, Picard made a claim for the enforcement of the judgment against Vizcaya in Gibraltar.

In the present appeal, the Privy Council had to consider the precise content and scope of the rule that a foreign default judgment is enforceable against a judgment debtor who has made a prior submission to the jurisdiction of a foreign court. Vizcaya argued that the question whether there is a jurisdiction agreement in the contract is a question of contractual interpretation, and that any such agreement must be express (which it claimed it was not) or at any rate cannot be implied.


Despite conflicting authority at common law as to whether an agreement to submit to a foreign jurisdiction can be implied, the court held that no such term was implied as a matter of fact or law. The court explained that for a term to be implied as a matter of fact, the trustee would have to adduce evidence of New York law not on what the contract meant inter partes, but on some wider rule of construction that its terms as to choice of law amounted to a choice of jurisdiction. For a term to be implied as a matter of law, expert evidence must have shown what relevant terms are implied under New York law. The court concluded that in any event, a jurisdiction agreement does not usually affect the bringing of insolvency proceedings since they are ancillary to the dispute under the original contract.