Black Swan flies as Siskina dies

Take 10

In this episode of our Take 10 podcast, BVI Head of Litigation, Insolvency and Restructuring Andrew Thorp is joined by partner Jonathan Addo to discuss the eagerly awaited Privy Council full board decision in Convoy Collateral Limited v Broad Idea International Limited which was handed down on 4 October 2021.

The Privy Council was asked to determine whether the Eastern Caribbean Court of Appeal was right in overturning the BVI Commercial Court’s 2010 Black Swan decision, where Justice Bannister held that he had power to grant a freezing order in support of foreign proceedings against a non cause of action defendant within the BVI Court’s jurisdiction. The 4-3 majority judgment given by Lord Leggatt confirms that Justice Bannister was correct and will now be the leading authority on interim injunctions.

Key takeaways

• The majority judgment of the Board confirms that the wider dicta in The Siskina – that an injunction must be connected to the cause of action in substantive proceedings – is legally unsound. It puts to rest the undesirable impediment the case has had on the jurisprudence of interim injunction for the past 44 years.
• In doing so, it upholds the BVI Court’s Black Swan jurisdiction, confirming that such common law equitable power to grant interim or freezing injunctions, whether standalone or not, exists, despite legislative development.
• The majority judgment examines the purpose of a freezing injunction in the modern context, affirming it is to prevent the right of enforcement from being rendered ineffective by the dissipation of assets against which the judgment could otherwise be enforced, recognising the developments in international commerce since 1977.
• The decision safeguards the standalone freezing injunction as an important cross-border asset tracing tool.