Privy Council confirms the broad jurisdictional reach of statutory tools available to BVI liquidators in cross-border insolvencies

In the most recent skirmish arising out of the Madoff fraud, the Privy Council, on appeal from the Eastern Caribbean Supreme Court, confirmed that BVI insolvency law can be applied by foreign courts. Applying the usual principles of comity, the Privy Council refused to grant an anti-suit injunction which would prevent claims founded in domestic BVI insolvency legislation from proceeding before the US Bankruptcy Court in New York. This decision confirms that the BVI courts do not have exclusive jurisdiction over the avoidance provisions in BVI insolvency legislation and BVI liquidators can pursue BVI Insolvency Act claims in foreign jurisdictions (subject to applicable principles of private international law).