British Virgin Islands

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The legislation governing arbitration in the British Virgin Islands (BVI) is the Arbitration Act 2013 which came into force on 1 October 2014 and which repealed the Arbitration Act 1976 (the latter will nevertheless continue to govern arbitrations commenced before 1 October 2014. The Act, contains comprehensive legal provisions that take into account modern principles and practices of arbitration and incorporates many of the articles of the UNCITRAL Model Law (Model Law). But this is not simply a modernising statute; it is one which, together with the BVI’s accession to the New York Convention on 25 May 2014 (making an arbitral award from a BVI tribunal enforceable in other contracting states), is designed to make the BVI as popular a seat for international arbitration as London, Paris and New York. In particular, the Act provides for the establishment of a statutory body, the BVI International Arbitration Centre (IAC), with a governing board and the power to promulgate rules under the Act.

This chapter outlines the current legislation and focuses on the enforcement of foreign awards in the BVI, which remains a ‘hot topic’ as far as practitioners are concerned. There are specific sections in the Act relating to mediators, but these are not examined in any detail here.

The Act

Overview and jurisdiction

The Act has as its object the facilitation and attainment of a fair and speedy resolution of disputes without unnecessary delay and expense. It applies to arbitration under an arbitration agreement, whether or not the arbitration agreement is entered into in the BVI, if the place of arbitration is in the BVI. ‘Arbitration agreement’ is defined as an agreement by the parties to submit to arbitration all or certain disputes that have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement, but must be in writing. The Act contains various mandatory provisions that will principally apply to arbitration agreements entered into before 1 October 2014 and a number of opt-in provisions that parties may choose to include in their arbitration agreement by reference.

The statute does not expressly define those matters that are arbitrable, and the common law will therefore govern whether a dispute is capable of being resolved by arbitration or not.

Except where third parties agree to be bound, an arbitration agreement (and any award) will generally only affect the parties to it. There are English authorities to the effect that an award may, in certain circumstances, be relied on in a claim against a third party for an indemnity and the BVI courts are likely to follow those authorities.

The BVI courts are also likely to follow the approach of the English courts in upholding the arbitration agreement where possible, so as to give effect to the intentions of the parties that their differences should be resolved by the arbitral process and not the courts. The liberal interpretation of arbitration clauses – thereby avoiding semantic arguments about whether the dispute ‘arose out of’ or was ‘in connection with’ or ‘arose under’ a contract – was forcefully espoused in England in Fiona Trust Corp v Privalov & Ors, an approach which has been endorsed in the BVI in Victor International Corporation and Victor (BVI) Limited v Spanish Town Development Company Limited & Ors (BVI HCV 2007/0293). In summary, absent express words to the contrary, parties are to be taken to have intended that all their disputes should be arbitrated.

A question that frequently arises is whether applications to appoint liquidators, or claims by minority shareholders in relation to unfairly prejudicial conduct, fall within the exclusive jurisdiction of the BVI courts or are arbitrable. In Zanotti v Interlog Finance Corp (BVIHCV 2009/0394), the BVI court held that an arbitrator could grant relief in unfair prejudice proceedings. As far as winding-up applications are concerned, in these writers’ view, an order appointing liquidators over a BVI company may only be made by the BVI court. In Artemis Trustees Limited & Ors v KBC Partners LP & Ors (BVIHC (COM) 2012/0137), the BVI court held that the position is different in relation to limited partnerships. The court held that because a limited partnership, unlike a limited company, has no identity separate from the identities of its constituent members, and because the winding up or dissolution of the partnership would have no effect on the rights and interests of third parties (again, unlike the winding-up of a limited company), there was no legal obstacle to the making by an arbitrator of an order dissolving or winding up a limited partnership.

Article 16 of the Model Law is incorporated in the Act, expressly giving the tribunal the competence to rule on its own jurisdiction, including:

•   any objections with respect to the existence or validity of the arbitration agreement;

•    whether the tribunal is properly constituted; and

•   what matters have been submitted to arbitration in accordance with the arbitration agreement.

The tribunal may rule on jurisdiction either as a preliminary question, or in its award on the merits. If, by way of preliminary question, the tribunal rules that it has jurisdiction, the court may be requested, by a dissatisfied party, to decide the question. There is no appeal from the court’s determination, nor is there any appeal (including to a court) from a ruling by the tribunal that it does not have jurisdiction.

If a party commences court proceedings concerning a matter that is the subject of the arbitration agreement, then any party to that agreement can ask the court to refer the matter to arbitration. The court must make that referral (and stay the court action) unless it finds that the arbitration agreement is null and void, inoperative, or incapable of performance.


Limitation periods are governed by the Limitation Act 1961, which expressly extends to arbitrations and which provides when arbitrations are deemed to be commenced for the purposes of calculating the relevant time limits. Contract and tort claims may not be brought after the expiration of six years from the date on which the cause of action accrued. The same time limit applies to common law actions on an award. In cases of fraud or concealment, time does not start to run until the fraud or concealment has been – or, with reasonable diligence, could have been – discovered.

The Act also expressly provides that where the court orders an award to be set aside, the period between the commencement of the arbitral proceedings and the date of the set-aside order shall be excluded in computing the time prescribed by a limitation enactment.

Conflicts of law

The BVI courts apply common law conflict of laws rules. The choice of law for contract provides that a contract is governed by its proper law which, in the absence of an express or implied choice by the parties, is the law with which the contract has its closest and most real connection. To the extent that foreign law is contrary to the public policy of the BVI or to the provisions of any statute which has overriding effect, foreign law cannot be applied in arbitration proceedings in the BVI.

Under the relevant conflict rules, the BVI courts regard limitation provisions that extinguish a right as substantive, but legislation that bars the remedy and not the right is regarded as procedural.

Selection of the tribunal

The parties are expressly stated to be free to determine the number of arbitrators, including the right to authorise a third party, including an institution, to make that determination. If the parties fail to agree on the number of arbitrators, the IAC will decide whether it should be one or three, depending on the circumstances of the case. The court or the IAC is empowered to intervene and make appointments in circumstances broadly similar to those set out above, with articles 11, 14 and 15 of the Model Law having been given effect in the Act.

Article 13 of the Model Law, which sets out the procedure for challenging an arbitrator, is given effect in the Act.

The Act expressly provides that in the absence of an express statutory provision, the court will not interfere in the arbitration of a dispute, because subject to the observance of such safeguards as are necessary in the public interest, parties should be free to agree how their dispute should be resolved. The Act mandates that where the court does interfere, it should as far as possible give due regard to the wishes of the parties and the provisions of the arbitration agreement.

The Act also expressly provides (by importing article 18 of the Model Law) that the arbitral tribunal is required:

•    to be independent;

•   to act fairly and impartially between the parties, giving them a reasonable opportunity to present their cases and to deal with their opponents’ cases; and

•   to use procedures that are appropriate to the particular case, avoiding unnecessary delay or expense, so as to provide a fair means of resolving the dispute.

A person approached for a possible appointment as an arbitrator must disclose any circumstances likely to give rise to justifiable doubts about his or her impartiality or independence, and that obligation continues throughout the appointment.

The Act provides that the IAC may issue a code of conduct for arbitrators and mediators, as well as guidelines with respect to the procedures to be followed by and the conduct expected of ‘persons connected with’ the operation of the Act.


The Act imports articles 10 to 24 of the Model Law and therefore contains detailed provisions on the procedure of the tribunal. That procedure is, subject to the provisions of the Act, very much left to the parties to agree on. Again subject to the provisions of the Act, if there is no agreement between the parties, the tribunal may conduct the proceedings in the manner that it considers appropriate. It also contains express provisions giving arbitral tribunals immunity from liability for acts or omissions in the performance of their functions, save where they have acted in bad faith.

Interim remedies

Under the Act, articles 17 and 17A to 17G of the Model Law are brought into effect. The parties are able to agree that the tribunal should not have power to grant interim measures – however, in the absence of such agreement, the tribunal is given wide powers to:

•    preserve the status quo;

•    prevent harm or prejudice to the arbitral process itself;

•    preserve assets and evidence; and

•   make preliminary orders (which are binding on the parties but not subject to enforcement by the court).

An applicant for interim relief must satisfy the tribunal that:

•    costs are not an adequate remedy;

•   the harm to the applicant in the absence of the remedy substantially outweighs the harm to the respondent if the remedy is granted; and

•    there is a reasonable possibility he will succeed on the merits.


A party requesting a preliminary order or interim measure will be liable for any costs or damage caused to the other party in the event the tribunal ultimately determines that the order should not have been granted.

The court itself is empowered to grant interim measures in support of any arbitral proceedings that have been or are to be commenced in or outside the BVI. This provides a statutory basis for free-standing injunctive relief. In relation to arbitral proceedings outside the BVI, interim relief can only be granted where the proceedings are capable of giving rise to an award that may be enforced in the BVI and the nature of the interim measure sought is of a type or description a BVI court is able to grant in relation to arbitration proceedings. There is no appeal from the court’s grant or refusal of an interim measure under the Act.

The award

Under the Act, articles 29 to 31 of the Model Law provide for decision-making by the tribunal (by a majority in the case of more than one arbitrator, unless otherwise agreed by the parties), for an award on agreed terms after a settlement, and for the form and contents of the award.

Article 33 of the Model Law is brought into effect, enabling parties to apply within 30 days of receipt of the award to request the tribunal to correct errors in computation, or clerical or typographical errors, or to ask the tribunal to make an additional award in respect of claims omitted from the first one.

Challenging an award

The Act provides for awards to be set aside or appealed in the following circumstances:

•   the court may set the award aside in the event of a successful challenge to the arbitrator;

•   where the arbitration agreement provides that the award may be challenged on the grounds of serious irregularity (or where those grounds of challenge apply automatically by virtue of the arbitration agreement having been entered into prior to 1 October 2014 and being a domestic arbitration agreement or one under which the parties have expressly provided that the agreement is to be dealt with under the 1976 Act);

•   subject to the leave of the court, or the agreement of all parties, where the arbitration agreement provides that the award may be appealed on a question of law. It should be noted that an agreement to dispense with reasons for the award will be treated as an agreement to exclude the court’s appeal jurisdiction and that the court has no other jurisdiction to set aside or remit an award on the ground of errors of fact or law on the face of the award;

•   with the leave of the court under the provisions of article 34 of the Model Law. Accordingly, an award may be set aside upon a party furnishing proof that:

     •   a party to the arbitration agreement was under an incapacity;

     •   that the agreement was not valid either under the law to which the parties subjected it, or absent such indication, BVI law;

     •   the party making the application was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case;

     •   the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. If the problematic parts can be separated from the rest, then only the problematic part may be set aside; or

     •   the composition of the tribunal or the procedure adopted was not in accordance with the parties’ agreement, unless that agreement was in conflict with a provision of the New Act from which the parties cannot derogate, or failing the parties’ agreement, was not in accordance with the New Act;

•   the court finds that the subject of the dispute is not capable of being settled by arbitration under BVI law; or

•   the court finds that the award is in conflict with the public policy of the BVI.

On hearing an appeal, the court may confirm, vary, or remit in whole or in part the award to the tribunal, or set it aside in whole or part.

An application under the New Act to set aside the award may not be made after three months from the date the party received the award.

An appeal upwards to the Court of Appeal from an appeal at first instance is permissible with the leave of the Court of Appeal.

Enforcement of foreign awards

In principle, the Act does not affect the enforceability in the BVI of Convention Awards. Pursuant to section 36 of the 1976 Act, the enforcement of Convention Awards was mandatory, save in specific circumstances that mirrored those set out in the Convention; for example, where the arbitration agreement was invalid, a party was unable to present its case, or where enforcement of the award would be contrary to public policy. Both foreign non-Convention Awards and domestic awards could be enforced by application under the 1976 Act, which provided that an award on an arbitration agreement might, by leave of the High Court, be enforced in the same manner as a judgment or order of the High Court to the same effect. Where leave was granted, judgment could be entered in terms of the award. Awards could also, of course, be enforced by action on the award at common law, and enforcement is a gateway for permission to serve any such proceedings out of the jurisdiction.

Enforcement of awards issuing from the UK was obtained pursuant to the Reciprocal Enforcement of Judgments Act 1922, which provides that the court may, if in all the circumstances it considers it just and convenient to do so, order the award to be registered and enforced in the BVI. The 1922 Act provides for certain circumstances in which registration should not be ordered, and these largely mirror the grounds for refusing to enforce a Convention Award, such as where the tribunal acted without jurisdiction, the award was obtained by fraud, was contrary to public policy and so on.

The decision of the Privy Council in Associated Electric and Gas Insurance Services Ltd v European Reinsurance Co of Zurich [2003] 1 WLR 1041 is highly likely to be followed in the BVI, so that an arbitration award may be used to raise a defence of issue estoppel in fresh proceedings between the same parties.

The Act essentially continues the same well-tested regime for the enforcement of foreign awards from the 1976 Act, but with improvements. The principal changes are that:

•   the Act explicitly provides that the grounds for refusal of enforcement that apply to a New York Convention Award also apply to the enforcement of a non-Convention Award, and in both cases those grounds are fully incorporated into the Act itself; and

•   a UK arbitral award now counts as a New York Convention Award in the BVI so recourse is no longer needed to the 1922 reciprocal enforcement legislation.


The Act contains several provisions intended (save in limited specified circumstances) to maintain the confidence of arbitral proceedings, including that any court proceedings should be heard in chambers, imposing reporting restrictions and prohibiting parties from disclosing, publishing or communicating any information relating to the arbitration proceedings or the award. Where the court considers that a judgment given in closed court proceedings is of legal interest, it may direct publication in the law reports, subject to appropriate safeguards in respect of the anonymity of the parties or to delaying publication for an appropriate period not exceeding 10 years.


As far as the remedy or relief to be awarded is concerned, the Act expressly empowers the tribunal to award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings. Unless otherwise agreed by the parties, the tribunal also has the same power of the court to
order specific performance or any contract, other than one relating to land or an interest in land. Despite its wide terms, we do not think the New Act empowers an arbitral tribunal to make a winding-up order. The position in relation to punitive damages is unchanged.


Under the Act, where a challenge on the basis of serious irregularity or an appeal or application for leave to appeal is pending, the court may order the applicant or appellant to provide security for costs. There is also provision for the arbitral tribunal to include directions with respect to costs (including its own fees and expenses) in the award. Costs are entirely at the discretion of the tribunal and must be assessed by the tribunal unless the parties have agreed on an assessment by the court. The tribunal may refuse to deliver its award until its costs have been met. The parties are jointly and severally liable for those costs.

The Act also contains express provisions in respect of interest, enabling the tribunal to award interest on any monetary award and on costs, the rate and time frame of such interests to be at the discretion of the tribunal.

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