Please ensure Javascript is enabled for purposes of website accessibility

People

Big things are happening at Ogier. Change is embedded in everything we do. It is redefining our talent, our ways of working, our platforms of delivery, our culture.

Expertise

Services

We have the expertise to handle the most demanding transactions. Our commercial understanding and experience of working with leading financial institutions, professional advisers and regulatory bodies means we add real value to clients’ businesses.

View all Services

Employment law

Intellectual Property

Listing services

Restructuring and Insolvency

Business Services Team

Executive Team

German Desk

Accounting and Financial Reporting Services

Cayman Islands AML/CFT training

Corporate Services

Debt Capital Markets

Governance Services

Investor Services

Ogier Connect

Private Wealth Services

Real Estate Services

Regulatory and Compliance Services

Ogier Global

Consulting

View all Consulting

Sustainable Investment Consulting

LexTech - Technology Consultants

Business Services Team

View all Business Services Team

Sectors

Our sector approach relies on smart collaboration between teams who have a deep understanding of related businesses and industry dynamics. The specific combination of our highly informed experts helps our clients to see around corners.

View all Sectors

Aviation and Marine

BVI Law in Europe and Asia

Energy and Natural Resources

Family Office

Foreign direct investment (FDI)

Funds Hub

Private Equity

Real Estate

Restructuring and Insolvency

Sustainable Investing and ESG

Technology and Web3

Trusts Advisory Group

Locations

Ogier provides practical advice on BVI, Cayman Islands, Guernsey, Irish, Jersey and Luxembourg law through our global network of offices across the Asian, Caribbean and European timezones. Ogier is the only firm to advise on this unique combination of laws.

News and insights

Keep up to date with industry insights, analysis and reviews. Find out about the work of our expert teams and subscribe to receive our newsletters straight to your inbox.

Fresh thinking, sharper opinion.

About us

We get straight to the point, managing complexity to get to the essentials. Our global network of offices covers every time zone. 

No Content Set
Exception:
Website.Models.ViewModels.Components.General.Banners.BannerComponentVm

Three Arrows case sees what is believed to be BVI's first ever extra-territorial summoning of company directors to appear for a private examination by joint liquidators

Insight

23 February 2023

British Virgin Islands

2 min read

The BVI Court has endorsed what is believed to be its first extra-territorial order summoning directors of a BVI company (in liquidation) to appear for private examination by joint liquidators - In BVIHC(COM) 2022/0119, Russell Crumpler and Christopher Farmer as Joint Liquidators of Three Arrows Capital Ltd (in liquidation) -and- (1) Zhu Su (2) Kyle Davies. 

Three Arrows conducted a high-profile and prominent cryptocurrency business as a digital asset hedge fund, reportedly operating assets in excess of US$10 billion at one stage. Owing to the volatility in the crypto market the company entered liquidation in June 2022 with significant liabilities.  

Upon a company entering insolvent liquidation it is paramount that officers of the insolvent company urgently coordinate with the liquidators so that immediate steps can be taken to protect and secure what remains of the company's assets. Without this assistance a liquidator must build the company's books and records from scratch, which not only wastes valuable time and increases costs, but also puts any unsecured assets at considerable risk.

The founders of Three Arrows are Mr Su Zhu and Mr Kyle Davies, who remained in office as directors of the company prior to its insolvency. It became clear soon after the joint liquidators' appointment that the founders were not going to cooperate or lend their assistance to the ailing company in any meaningful way, particularly after the founders failed to respond to a section 276 notice (under the Insolvency Act, 2003) requiring them to prepare and submit a Statement of Affairs of the Company. Failure to comply with a section 276 notice alone is an offence under the Insolvency Act and carries a fine for non-compliance.

Section 282 of the Act gives liquidators a power where, by giving notice in writing, certain individuals who are thought likely to be in possession of relevant information concerning a company’s affairs (including its directors) are required to provide information, to attend on the officeholder or to be examined on oath. A failure to comply with such a notice without reasonable notice constitutes an offence under section 282(3) of the Act. In addition, section 284 of the Act provides for applications to be made for the same persons (including the company’s directors) to be examined before the Court.

In the present case, despite multiple further requests, the founders have not cooperated with the joint liquidators, despite the clear and pressing need for them to do so. The joint liquidators accordingly felt compelled, in fulfilment of their duties, to apply to the BVI Court to seek an order summoning the founders for examination. While section 284 of the Insolvency Act is clear that such a power exists, there are no reported cases of directors, who are resident outside of the BVI, being compelled to appear before the BVI Court.

On its face, it is surprising that there is no existing authority confirming the extra-territorial effect of section 284. Particularly in a jurisdiction where hundreds of thousands of offshore companies are run by directors who reside outside of the country. Indeed, the present case shows the stark need for liquidators to have access to such powers.

To date, the Court has not rendered a written judgment and the order was obtained ex parte, however, confirmation of the availability of this power to a liquidator's arsenal will come as welcome news to the many prominent insolvency practitioners in the BVI.

The joint liquidators were represented by Ogier, who instructed leading counsel Richard Fisher KC and Henry Phillips of South Square.

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

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.

Regulatory information can be found under Legal Notice

No Content Set
Exception:
Website.Models.ViewModels.Blocks.SiteBlocks.CookiePolicySiteBlockVm