June 24, 2022
The BVI Commercial Court has recently granted orders on enforcement of judgments delivered by the Court of the People’s Republic of China (“PRC”). The Court awarded a default judgment putting into effect a multi-million dollar judgment from the PRC Court arising out of the defendant’s unpaid debts. This marks what is believed to be one of only a handful of times that the BVI Court has enforced a PRC judgment, showing that contrary to the belief that it may be difficult to enforce judgments issued by the PRC in the BVI, the BVI Court has now demonstrated that it is increasingly willing to enforce such judgments. This is relevant to creditors holding judgments not just in the PRC but also potentially to those holding judgments from other jurisdictions which similarly have no specific mutual enforcement treaty with the BVI. In the past few decades, the rapid growth of the Chinese economy and its investments and capital flows abroad has led to the BVI being one of the favourite offshore jurisdictions that Chinese companies use to structure corporate groups and transactions. As a result, the BVI has played an increasingly important role, with more and more BVI companies having established ties with PRC individuals and companies through shareholding or control structures. Correspondingly, obtaining enforcement of PRC judgments in the BVI has become an important tool for asset enforcement and recovery for creditors. In the case of the PRC, as there are currently no mutual enforcement treaties between the BVI and the PRC governing the enforcement of judgments, all PRC judgments need to be enforced by way of the common law...