When a company is being wound up in a given jurisdiction, can an anti-suit injunction be sought against relevant creditors or members to prevent them from pursuing proceedings in another jurisdiction with a view to securing priority in the liquidation?

This was the issue for the Privy Council to decide in Stichting Shell Pensioenfonds v Krys and another (British Virgin Islands) (26 November 2014), in what is an interesting instance of the application of anti-suit injunctions within the insolvency framework.


Fairfield Sentry Ltd (Fairfield), a mutual fund incorporated in the BVI, was the largest feeder fund of Bernard L. Madoff Investment Securities LLC (BLMIS), a New York-based fund manager controlled by the now infamous Bernard Madoff, who undertook what appears to be the largest Ponzi scheme in history. Stichting Shell Pensioenfonds (Shell), a Dutch pension fund, was an investor in BLMIS through shares held in Fairfield.

Following Mr Madoff’s arrest in 2008, Shell sought to redeem its Fairfield shares. As no redemption payment was received, Shell successfully applied to the Amsterdam District Court for a conservatory order over Fairfield’s assets, including over a substantial cash deposit held at Citco Bank’s Dublin branch (the Attachments). Under Dutch law however, such Attachments did not create any form of proprietary interest and would only be available to satisfy any potential subsequent judgment against Fairfield.

In July 2009, an order was made in the High Court of the BVI placing Fairfield into liquidation. Shell submitted its proof of debt in the liquidation of Fairfield in November 2009. This was rejected by the liquidators, who promptly applied to the BVI Court for an anti-suit injunction preventing Shell from enforcing the Attachments. The liquidators’ claim was rejected at first instance on the basis that the BVI Court could not prevent a foreign creditor from resorting to its own courts. This decision was overturned by the BVI Court of Appeal, which granted the anti-suit injunction. Shell appealed before the Privy Council.

Decision of the Privy Council

In establishing the BVI Court’s jurisdiction to make the relevant order, the Privy Council considered the following principles:

  • In the BVI, as in England and Wales, an order to wind up a company creates a statutory trust in which all of its assets, local and international, are pooled for sharing amongst the creditors according to the statutory rules of distribution. As the Attachments did not create any proprietary interest, the assets to which they related should be included in the mandatory statutory trust resulting from the BVI winding up order.
  • The BVI Court has equitable jurisdiction to uphold a “pari passu” distribution (one in which unsecured creditors are ranked equally). Based on previous decisions1, the granting of the anti-suit injunction was justified where a creditor invoked a foreign jurisdiction to bypass the statutory scheme of distribution. Failure to do so would “disturb the general principle of equal distribution which the court is always anxious to enforce”.

The Privy Council found that the jurisdiction to grant the anti-suit injunction should be exercised because:

  • Shell had submitted to the BVI Court’s jurisdiction by lodging its proof in the liquidation2. Shell’s argument that an anti-suit injunction could not prevent a foreign litigant from resorting to the courts of its home country was rejected.
  • It was right to grant such relief as a matter of discretion. It was not the Privy Council’s place to question the BVI Court of Appeal’s exercise of discretion, save for cases of error of law and/or fact. Shell’s argument that the BVI Court of Appeal should have left the Dutch court to decide whether the proceedings before it should continue was rejected.

The Privy Council rejected the appeal and upheld the anti-suit injunction granted by the BVI Court of Appeal.


This case firmly establishes the international scope of insolvency proceedings and demonstrates the English and BVI courts’ willingness to exercise their equitable jurisdiction to safeguard the fundamental principle that unsecured creditors are to rank equally. Finally, creditors should be aware that they may submit to a jurisdiction simply by lodging a proof of debt.