BRITISH VIRGIN ISLANDS
COURT OF APPEAL
INTERLOCUTORY APPEAL – DERIVATIVE PROCEEDINGS – INTERPRETATION OF SECTION 184C(2)(C) OF BVI BUSINESS COMPANIES ACT, 2004 (AS AMENDED) – MEANING OF ‘LIKELY’ IN WORDING ‘WHETHER THE PROCEEDINGS ARE LIKELY TO SUCCEED’ – APPEAL AGAINST FINDINGS OF FACT MADE BY LEARNED JUDGE
The Appeal concerns the refusal by the Court to grant leave to the Appellant pursuant to Section 184C(2)(c) of the BVI Business Companies Act, 2004 (as amended) (the “BCA”) to commence derivative proceedings on behalf of the first Respondent, for what it contends was the sale at an undervalue of the shares in its wholly owned subsidiary.
The Learned Judge’s refusal was based on his Judgment that the intention and effect of Section 184C(2)(c), was that for a claim to be ”likely to succeed” it must be obvious, without any substantial consideration of or debate on the merits that it is likely to succeed and the proposed Claim must appear to the Court to be self-evidently strong without conducting an inquiry. He observed the application for leave under Section 184C was not an occasion for painstaking analysis of valuation or other evidence and based on a limited examination of the evidence found that the Appellant’s Claim was not likely to succeed.