The BVI Company Registry is the only major source of publicly available information and records, other than by recourse to litigation. However, a search of the public registry file will only likely reveal the following data: the Certificate of Incorporation; the Memorandum and Articles of Association; the identity of the Registered Agent and the location of its registered office; and possibly details of directors. A search will not normally reveal the names of the shareholders or details of assets.
Unlike in England and Wales, there is probably no provision in the BVI that allows a party to apply to the court for an order for disclosure before proceedings have commenced. (It is debatable whether such a right can be derived from section 11 of the West Indies Associated States Supreme Court Act, but the prevailing view in the BVI is that it cannot.)
Nevertheless, Norwich Pharmacal actions can be brought successfully pre-action against third parties. Given the BVI’s success in incorporating Business Companies – over 800,000 at present – this is most usually in the form of an application against trust companies and registered agents (RAs) where the wrongdoer is a company.
Key Facts: The Requirements
A Norwich Pharmacal disclosure and production order is available to obtain documents from third parties who have become innocently mixed up in the wrongdoing, through no fault of their own.
Under traditional Norwich Pharmacal principles the court will normally require the following:
- A wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer;
- There must be a need for an order to enable an action to be brought against the ultimate wrongdoer;
- The person against whom the order is sought must:
- be mixed up in so as to have facilitated the wrongdoing; and
- be able to likely to be able to provide the information necessary for the wrongdoer to be sued.
(see Mitsui & Co Ltd v Nexen Petroleum UK Ltd  EHWC 625 (Ch)).
The BVI Angle
The leading case in the BVI is Morgan & Morgan Trust Corporation Limited v Fiona Trust & Holding Corporation et al, BVI HCV Case No. 3/2006, which adheres very closely to the origins of the Norwich jurisdiction, stressing in particular the need for relief to be granted, usually to identify the wrongdoer, in order for an action to be brought. The jurisdiction is "a special one to be used only where no other procedure will achieve the ends of justice". Thus if a party already knows the identity of the wrongdoer and the location of the assets, the court will not permit an application to be used merely in order for the claimant to bolster his case by seeking information which would become available at the discovery stage of proceedings.
Look Before You Leap: BVI Factors
The ‘innocent’ third party in the BVI is often the RA or the banker of the company who has been passively involved, rather than having actively facilitated the fraudster’s wrongdoing.
A registered agent will typically hold additional useful company formation documents, including the share register, register of directors, and minutes of any shareholders’ or directors’ meetings. Unfortunately, minutes of resolutions are frequently not passed to the RA.
The RA may have some correspondence showing the source of instructions, which can be extremely valuable.
Nuts and Bolts
A few points to keep in mind about Norwich relief in the BVI:
- Don’t forget the court’s ability to couple Norwich relief with its equitable jurisdiction to order disclosure against defendants or innocent third parties to aid in the protection of missing assets, based on Bankers Trust v Shapira  1 WLR 1274 CA.
- Don’t forget to consider a seal and gag order to avoid the RA tipping off the client of record, advertently or inadvertently.
- Applications generally will not improve with time and should be promptly.
- Do bear in mind that it is generally more difficult to obtain relief against a law firm because of the existence of privileged material.
- Do bear in mind that shareholders and director information may reveal a further tier of nominees who require investigation.
- Don’t just stop at the shareholders: KYC information may be held on the ultimate beneficial owner and bank records showing the source of the payment of the RA’s fees can be an equally rich source of information.
Norwich Pharmacals in the 21st century
In the recent case of JSC BTA Bank v Fidelity Corporate Services Limited and Others (BVI HCV Com Case 137/2010) at first instance the BVI Commercial Court refused to grant Norwich Pharmacal relief against a registered agent, saying that day-to-day activities of an RA such as offering corporate services did not meet the threshold test for the granting of relief, as otherwise, a claimant "had only to allege that he had been wronged … to be entitled as of right to obtain the widest disclosure from its registered agent." Some took the view that this approach would have substantially taken the bite out of the Norwich jurisdiction as a tool for information recovery, making the threshold of involvement much higher than previously thought.
The Court of Appeal disagreed with the Commercial Court’s view, holding that an RA cannot be considered to be a mere onlooker. By forming and maintaining companies, the RA facilitated (albeit innocently) the commission of the fraud. The Court of Appeal held that this involvement was sufficient to impose upon the RA a duty to disclose information which could assist the victim in discovering the true wrongdoers.
This is a welcome decision for the future of Norwich Pharmacal relief in the BVI. Given that all BVI companies must, by law, have a registered agent and office in the BVI, if the threshold for relief had been heightened against RAs, this would have represented a serious blow to victims seeking to identify those behind wrongdoing companies. Particularly given recent concerns about offshore jurisdictions, confidentiality and the possibility of individuals to “hide” behind letterbox entities, this should somewhat reassure claimants, and the international community at large, that the BVI is not an "opaque jurisdiction".
The future: A flexible remedy
The BVI Courts have demonstrated their willingness to recognize Norwich relief as a flexible and adaptable remedy, and future cases will no doubt continue to adapt the principles to novel situations. Recent cases have led to relief in areas as diverse as:
- matrimonial litigation, where a husband in foreign matrimonial proceedings was seeking to conceal martial assets;
- against RAs where the companies were alleged to have been the recipients of funds fraudulently advanced by the applicant’s former owner; and
- to obtain information on trustees and beneficiaries of trusts.