Claims of passing off are rare in the British Virgin Islands and a recent attempt to bring an action in the BVI in relation to goodwill held outside of the jurisdiction failed. The Claimants were a group of Egyptian private equity investors with over US$516 million in assets under management and a respected long track record in development and management of various investment projects in the Egyptian market. The Defendants included a former employee of the Claimants and the companies through which he operated.
Having left the employ of the Claimants, the former employee sought to set up his own BVI fund and prepared a draft presentation in this regard, which came to the knowledge of the Claimants. The Claimants alleged that the Defendants’ draft presentation made several misrepresentations regarding a number of successful investments projects in its portfolio which would cause the public to believe that its former employee was involved in the success of these projects, the success of which could not be attributed to him but to its investment management team. The Claimants argued this amounted to a misrepresentation of its goodwill or ‘track record’ which could cause confusion in the marketplace and cause it loss and damages. Harneys acted for the successful Defendants in resisting the claim.
Justice Adderley examined the law and relevant English authorities on the tort of passing off. He opined that goodwill is governed by territoriality and that to succeed a Claimant must prove that it has goodwill in the form of customers in the jurisdiction where the suit was undertaken. Thus, even on the assumption that the Claimants’ pleaded allegations are true; the lack of any claim that any breaches took place or was threatened in the British Virgin Islands was fatal to the Claimants’ case which ought to be struck out.