Ashes to ashes: limitations of ancillary relief in aid of foreign proceedings

In the recent BVI case of VTB Capital PLC v Nutritek International Corp (103 of 2013) (VTB) Bannister J confirmed that, regardless of how proceedings seeking ancillary relief in aid of foreign proceedings are commenced, those proceedings cannot be subsequently enlivened or turned into substantive proceedings if the main proceedings, which are taking place in a foreign jurisdiction, fail or otherwise fall away.

In VTB proceedings were commenced for the purposes of obtaining freezing orders in the BVI against two BVI-incorporated companies which were ancillary to similar orders granted in the High Court in London. Rather than use the method under what is now known as the Black Swan jurisdiction, namely stand-alone relief by way of a freezing injunction in support of foreign proceedings, VTB elected to utilise the old method of issuing substantive proceedings and then immediately applying for them to be stayed once interim relief had been obtained. Freezing orders were granted in the BVI in August 2011. On 6 February 2013, the UK Supreme Court discharged the UK freezing orders. Subsequently the BVI injunction was discharged in March 2013. VTB applied for a fresh freezing order to be granted, on the grounds that, among other things, there was a serious question to be tried and the BVI was the appropriate forum…

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