Arbitration issues in the BVI: 2025 judgments in review

The BVI quickly established itself as a jurisdiction supportive of arbitration and the enforcement of foreign awards through decisions of the Commercial Court and Court of Appeal. 2025 was a year in which the Courts developed that theme and shone a light on the strong capabilities of the jurisdiction in the evolving context of global dispute resolution.

The BVI's reputation in the offshore world as an epicentre for complex cross-border disputes means that the jurisdiction often plays a part in international dispute resolution strategies. Many of the issues addressed by the courts in 2025 reflect the role that the BVI plays in international commerce: company constitutions, the court's supervision of arbitration, freezing relief in support of arbitration, and the enforcement of awards against assets of BVI companies.

Arbitration and company constitutions: streamlining the resolution of disputes and grappling with the competition between arbitration clauses and litigation

Spa II Guangdong Ltd et al v Decent Management Limited et al

In Spa II Guangdong Ltd et al v Decent Management Limited et al BVIHCOM 2024/0037 (Spa II), there was a long history arising from a joint venture through a BVI company, Decent Management Ltd (the Company) indirectly holding a 95% interest in real estate in Shanghai.  

The shareholders agreement in respect of the Company had an HKIAC arbitration clause which, in 2019, led to the stay of unfair prejudice proceedings commenced by shareholders of the Company, (CBRE) against the Company and another shareholder of the Company (FSE).

Arbitration proceedings followed under the HKIAC rules that led to a first partial award in which, inter alia, the Tribunal found that there was "functional deadlock" in respect of the affairs of the Company and a total breakdown of trust and confidence, for which FSE was solely or mainly responsible.

The respondent did not challenge the award.

CBRE then applied to the BVI Court for the appointment of liquidators over the Company on just and equitable grounds, based on findings in the first partial award (the Winding Up Application) that (i) there was a "functional deadlock" in the affairs of the Company (the Deadlock Ground), or alternatively (ii) there was an "irretrievable breakdown of trust and confidence" between CBRE, the shareholders of the Company, and the directors nominated by FSE, for which CBRE was not responsible or solely responsible (the Loss of Trust and Confidence Ground).

Mithani J made a liquidation order on 8 August 2025 and held that, in the absence of a formal challenge to the first partial award in the appropriate court or tribunal, the findings of the HKIAC Tribunal were capable of being "carried through" to the Winding Up Application without having to be re-litigated by the parties to the arbitration absent compelling reasons.  

The Deadlock Ground

Mithani J agreed that the Company was deadlocked. CBRE argued that FSE's contention that the Company was not deadlocked (due to certain matters being agreed between the parties since the first partial award) was "directly contrary to the findings of the Tribunal which specifically ruled that the affairs of the Company were in a state of functional deadlock", with specific reference by the Tribunal to the fact there had been no board meetings, written resolutions, or decisions on essential matters in recent years in addition to no dividends being distributed since at least 2017 despite having funds to do so. Mithani J referred to, inter alia, CBRE's submission that "the position should be the same even in relation to matters which post-date the hearing before the Tribunal or its award."

CBRE submitted, with which Mithani J agreed, that a finding that the Company was not deadlocked because of events since the first partial award could give rise to an "unworkable" situation where, on the conclusion of each arbitration, a further arbitration would be required to determine whether since the date of that arbitral award the affairs of the Company had ceased to be deadlocked – leading to a potentially never ending series of arbitrations. 

The Loss of Trust and Confidence Ground

In order for this ground to be established, there needed to be some type of culpable conduct on the respondents' behalf. Mithani J found that the Tribunal had made "trenchant criticisms of the conduct of FSE", and was therefore satisfied that there was ample evidence to warrant a finding against FSE, that there was culpable conduct on its part. 

FSE could not challenge CBRE's ability to enforce the first partial award in the Insolvency Proceedings. The Court could not exercise its insolvency jurisdiction to set aside arbitral or tribunal awards. 

The Tribunal's finding that CBRE had not failed to reasonably pursue an alternative remedy was binding on FSE. The Court therefore ordered the appointment of liquidators without requiring CBRE to restart the BVI unfair prejudice proceedings that had been stayed in 2019 on the basis that the Court would normally allow the Tribunal's findings to be carried through to the Winding Up Application.

Welltech Group Limited v Techmix Limited 

In Welltech Group Limited v Techmix Limited BVIHCM2025/0209 (Welltech), there was a shareholders agreement with an LCIA arbitration clause. 

Welltech Group Limited (the Claimant) sought a declaration in respect of an amended version of their Memorandum and Articles of Association. A minority shareholder objected to the amendments and sought a stay of the BVI proceedings in favour of LCIA arbitration. The Claimant accepted that the shareholders agreement contained a valid and enforceable arbitration clause, but contested the shareholder's assertion that the arbitration clause applied to the dispute. 

Mithani J held that he first had to determine (a) if the dispute was within the terms of the narrow arbitration clause, and if it was, (b) whether it was a genuine dispute on substantial grounds, (and if such a dispute exists, the proper course being to stay or dismiss the application in question) this being in line with the Privy Council decision in Sian Participation Corp (In Liquidation) v Halimeda International Limited [2024] UKPC 16 (Sian Participation) on the clash between insolvency and arbitration. 

The onus lies on the party denying the applicability of the arbitration clause, in this case, the Claimant. If the answer to either (a) or (b) is no, the Court retains jurisdiction over the dispute, otherwise the dispute must be arbitrated. 

In the event, Mithani J found that the dispute was not within the terms of the arbitration agreement and even if it had been, it was not a bona fide dispute raised on substantial grounds.

Caldicott Worldwide Ltd v Siong Beng Seng & Ors

There was a successful application in Caldicott Worldwide Ltd v Siong Beng Seng & Ors BVIHCMAP 2023/in 0009 (Caldicott) in 2025 for leave to appeal to the Privy Council, albeit earlier judgments were delivered in 2024 and before.

Caldicott Worlwide Ltd, a minority shareholder in Hector Finance Group Limited (the Company) brought an unfair prejudice claim under section184I BCA alleging that the majority shareholders caused the Company to withhold dividends declared and paid to others and sought relief that included declarations invalidating a 30 November 2019 board resolution ratifying the withholding (the November Resolution), a declaration that the dividends were due and payable, buy-out orders, compensation, and alternative statutory relief.

The case involved an arbitration provision in the Company's Articles and its interplay with the unfair prejudice proceedings started by Caldicott Worldwide. The difference between Caldicott on the one hand and Spa II and Welltech on the other is that there was no agreement between shareholders in Caldicott. The arbitration clause in the Company's Articles provided that any dispute between the Company and its members relating to the affairs of the Company must be referred to arbitration. 

Caldicott Worldwide's unfair prejudice proceedings were first stayed in the Commercial Court against the Company but were permitted to continue against the other shareholders and Caldicott Worldwide was permitted to seek relief in respect of the November Resolution and unpaid dividends to the extent there was no "difference" involving the Company to be resolved. The refusal to stay all claims was upheld by the Court of Appeal in 2021. 

The Court of Appeal then held in a second appeal (the Second Appeal Judgment) that any issue falling within the scope of the arbitration clause must be stayed, and ordered stays by reference to the issues. The Order of Wallbank J permitting Caldicott Worlwide to (i) seek a declaration that the November resolution is unlawful/void, and (ii) seek a declaration that the dividends are due and owing was set aside and both heads of relief were stayed. 

Proceedings against the shareholder defendants for other relief remained, including the right to seek, “such other order under section 184I”. The Court of Appeal did not expressly stay the underlying factual issue of whether dividends were improperly withheld. 

There was then a third appeal arising from a separate ruling of Wallbank J made while the Second Appeal Judgment was pending, which was appealed by Caldicott Worldwide on the grounds, inter alia, that the judge failed to recognise the Second Appeal Judgment's scope (the Third Appeal Judgment).

The issue on appeal was whether the stay in the Second Appeal Judgment extended to claims against the shareholder defendants and Caldicott Worldwide sought to clarify that the stay in the Second Appeal Judgment did not prevent it from continuing the unfair prejudice claims against the shareholders in respect of the withholding of dividends.  

The Court of Appeal held that it was bound by the Second Appeal Judgment and dismissed Caldicott Worldwide's appeal, noting it was an "unfortunate result". The stay of the claims in the Second Appeal Judgment, whilst concerning to the Court, could not be ignored. The claims were stayed, including the underlying factual issue.

The Court noted that:

"It seems to me than an arbitration agreement is classically binding between the parties to it; it is something of a stretch to suggest the arbitration agreement in the articles of association has the effect that actions between shareholders are subject to that provision."  

On the application for leave to appeal to the Privy Council (the Fourth Appeal Judgment), the Court recognised that the issue of whether an arbitration clause between a company and shareholder can be used to stay the factual substratum of a shareholder v shareholder unfair prejudice claim has wide reaching implications in respect of the operation of section 184I BCA and for minority shareholder protection to the BVI.

In the Fourth Appeal Judgment, the Court of Appeal accepted that the Third Appeal Judgment "may have made it difficult for Caldicott to establish the essential element of its claim" and accordingly granted leave to appeal to the Privy Council.

Thus, the question for decision by the Privy Council will be whether an arbitration agreement between company and shareholder can be used as the basis of a stay of a factual dispute between shareholders.

Of course, an arbitration between the company and one shareholder does not assist the resolution of a dispute between shareholders who, absent agreement of all parties, cannot take part in the arbitration and are therefore not bound by its result.

Supervision of Arbitration: stopping abuse 

TAX v FDQ

TAX v FDQ BVIHCMAP 2024/0029 (TAX v FDQ) was a decision of the Court of Appeal arising out of an award in a domestic arbitration that had retained the right of a party to appeal an award for serious irregularity and on a point of law.

Wallbank J set aside the award on the respondent's application for both serious irregularity and on errors of law. Leave to appeal that decision was granted and a notice of appeal was filed in November 2024. At the time of judgment, that appeal was pending before the Court. 

The applicant applied for an injunction from the Court of Appeal restraining the second arbitration proceedings pending determination of the appeal.

The Court of Appeal granted the injunction restraining the pursuit of the second arbitration under section 24(1) Eastern Caribbean Supreme Court (Virgin Islands) Act, finding that this was an exceptional case and that the pursuit of the second arbitration proceedings before the conclusion of the appeal, and therefore before the conclusion of the first proceedings, was an abuse of process and unconscionable.  

Clearly, the Court of Appeal sought to protect itself and the second arbitration proceedings from the difficulties of identical claims proceeding at the same time.

Freezing relief in support of Arbitration: applications are not necessarily to be heard without notice to the respondent

Eletson Corporation & Anor v Levona Holdings Ltd & Anor 

In Eletson Corporation v Levona Holdings Ltd BVIHCM2024/0111 (Eletson), Eletson Corporation and Eletson Gas LLC had obtained an ex parte freezing order against Levona Holdings Ltd (Lenova), a BVI Company, in connection with a JAMS award  that it had obtained.  

The award contained some extreme findings that Levona had bribed an Eletson Corporation officer, evidenced by emails recounted in the award. This evidence had contributed to Wallbank J's conclusion on the ex parte application that there was solid evidence of risk of dissipation. 

The urgency put to the BVI Court was that a status quo injunction would fall away shortly when the Court in the Southern District of New York (SDNY) handed down judgment in proceedings for a judgment on the award. This was coupled with a submission that Levona should not be tipped off in respect of the application in the BVI for a freezing order.

There was, however, no evidence in the BVI as to the need for the application to be heard ex parte. The omission of evidence explaining the without-notice approach was a substantive, not technical, failure and breach of the mandatory requirement in CPR 17.3(4) - foundational to the Court’s jurisdiction to proceed ex parte. In addition, Wallbank J was not told on the ex parte application that a prior application to the SDNY Court for a Temporary Restraining Order had been on notice and had been dismissed, and that essentially tipping off had taken place months before.

Wallbank J accordingly discharged the freezing order and declined to regrant it.

Whilst the case was in the context of an arbitration, it is an example of the Court requiring hearings to be on notice unless an ex parte hearing is justified to it on evidence.  

Enforcement: respect for the courts of the seat

Abdul Kadir Al Muhaidib & Sons Company v Dr Moamena Kamel et al

Abdul Kadir Al Muhaidib & Sons Company v Dr Moamena Kamel et al BVIHCOM 2024/0213 (Abdul Muhaidib) is a case of which the nineteenth century English chancery division would have been proud.

It arose from an agreement made in 2007, which included a Cairo arbitration clause. The dispute arose the next year, in 2008 and led to a number of court proceedings and then in 2012, to the first arbitration proceedings.

The tribunal found that the parties had waived their right to arbitration, which decision was found to be wrong by the Court.

That led to the second arbitration being started in 2020, during which one party died and was replaced by his heirs.

The second arbitration award was issued in 2022 and awarded $23 million, albeit the tribunal did not find an agreement that compensation should be paid in US dollars.

This led to the final court of appeal in Egypt setting aside the award in 2025 as contrary to public policy for breach of foreign exchange laws.

In the meantime, and prior to the 2025 ruling, the claimant had obtained an interim ex parte order in the BVI for recognition and enforcement of the award and for a freezing order in support.

The issue therefore being decided by Mithani J was whether the Court should exercise its discretion to enforce an award notwithstanding its annulment by the Egyptian court, being the seat of the arbitration.

That discretion derives from section 86(2) Arbitration Act which provides, amongst other things, that a court may refuse enforcement of a Convention award if the award has been set aside. This provision therefore involves the converse, namely that the Court has a discretion to enforce an award that has been set aside. Mithani J noted that "the key point" when a judge is exercising a broad discretion, such as under section 86(2), "clear limits apply" and the court "must take a rounded view of all the facts and details… it requires an independent judgment" tailored to the facts of the case.  

Unsurprisingly, Mithani J was concerned not to risk drawing the Court into the role of some sort of appellate court over decisions of foreign courts. He declined to be tempted by the competing expert evidence on whether or not the Egyptian Court decision was correct. 

Essentially, whilst he accepted the public policy of the BVI "strongly favours" enforcement of arbitral awards (citing Sian Participation), he found that to enforce an award set aside by the apex court of the seat requires compelling unfairness or impropriety, the absence of which would undermine legal certainty and comity. He accordingly declined to enforce the award. 

Looking forward

The factual matrix of modern disputes increasingly demands sophisticated strategies that are rarely confined to seeking relief in a domestic forum. The development of the BVI courts' approach to arbitration is therefore one that is important to both onshore and offshore worlds.

2026 has already resulted in BVI judgments on arbitration issues: the Al Muhaidib decision was included in this review. In addition, the Court of Appeal gave judgment in NKT v NMH BVIHCMAP2024/0031 on 30 January 2026 relating to the enforcement of an ICC award. We can expect 2026 to continue to produce judgments that will affect how awards are enforced in the BVI, as well  as other important arbitration issues, such as the effect of arbitration clauses on company control and shareholder disputes.

In the immediate future, BVI Arbitration Week 2026 (23 - 27 March)  will provide further analysis and thought leadership from international experts gathering in the region.   

How Ogier can help

Ogier's expert team of BVI lawyers (situated across Ogier's global network) act both in arbitrations administered in the BVI and around the world, in addition to BVI Court proceedings involving arbitration issues. 

For further insights or specific legal advice and representation, please contact Nicholas Burkill, Jessica Hynes or another member of the BVI Dispute Resolution team. 

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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