With the use of Bermuda, BVI and Cayman Islands companies continuing to grow in Asia, one question we are increasingly being asked to advise on is whether it is possible to obtain interim freezing injunctions in aid of foreign court proceedings without first having to issue substantive proceedings in these offshore jurisdictions. The answer to that question is yes. This insight provides an overview of the applicable laws in each jurisdiction.
The British Virgin Islands
Unlike England & Wales and Hong Kong, there is no legislation giving the BVI courts jurisdiction to grant freestanding freezing orders in aid of foreign court proceedings. The power of the BVI courts to make such orders comes from the common law.
Until Bannister J’s decision in Black Swan Investment ISA v Harvest View Limited (BVI HCV (Com) 2009/399 (2009)) in 2009 (“Black Swan”), Lord Diplock’s judgment in the House of Lords decision in The Siskina ( AC 210) had been interpreted to mean that it was only possible to make an application for a freezing injunction in existing proceedings before the BVI courts. In Black Swan, Bannister J adopted the reasoning of Lord Nicholls in the Privy Council decision of Mercedes Benz AG v Leiduck ((PC)  AC 284) and found that the BVI courts should be prepared to grant freestanding injunctions, freezing the assets of legal persons over which they had jurisdiction, in order to assist foreign litigants to enforce monetary judgments that they might ultimately obtain in foreign proceedings. BannisterJ also found there were good policy reasons why the BVI courts should be prepared to make such orders.
The Eastern Caribbean Supreme Court, Court of Appeal approved the Black Swan decision in Yukos CIS Investments Limited et al v Yukos Hydrocarbons Investments Limited (HCVAP 2010/028 (2011)) (“Yukos”).
As with the BVI, the jurisdiction of the Bermuda Courts to grant freestanding freezing injunctions in aid of foreign proceedings is derived from the common law. In ERG Resources LLC v Nabors Global Holdings II Limited ( SC (Bda) 23 Com.), Kawaley CJ confirmed the common law position in Bermuda and held that the Bermuda Court had the power to grant freestanding freezing injunctions in support of foreign proceedings wherever the Bermuda Court had personal or territorial jurisdiction over the relevant defendant. The learned judge cited Black Swan and Yukos with approval.
The Cayman Islands
Like the position in England & Wales and Hong Kong, following the enactment of s. 3 of the Grand Court (Amendment) Law 2014, which introduced a new s. 11A into the Grand Court Law (2008 Revision), the jurisdiction of the Grand Court to grant interlocutory freestanding freezing injunctive relief now has a statutory footing.
Before the Grand Court will be prepared to make an order under s. 11A(1) the applicant will need to persuade it that: (i) there are or will be proceedings commenced in a foreign jurisdiction; which (ii) are capable of giving rise to a judgment which may be enforced in the Cayman Islands under any law or at common law.
These new provisions were recently considered and applied in the case of Classroom Investments Inc v (1) China Hospitals Inc and (2) China Healthcare Inc. (2015 (1) CILR 451). This case provides useful guidance on how s. 11A operates.