- Privy Council refuses anti-suit injunction in cross-border insolvency case (UBS AG New York and others v Fairfield Sentry Ltd (in liquidation) and others (British Virgin Islands))
- What are the practical implications of the judgment?
- What was the background?
- What did the Privy Council decide?
Restructuring & Insolvency analysis: William Hare, litigation partner at Forbes Hare, considers the decision of the Judicial Committee of the Privy Council in UBS AG New York and others v Fairfield Sentry Ltd (in liquidation) and others (British Virgin Islands) that the liquidators of the first respondent (Fairfield Sentry) could pursue proceedings in the US bankruptcy courts under section 249 of the British Virgin Islands’ Insolvency Act 2003 (BVIIA 2003). The court ruled that while BVIIA 2003, s 249 empowered the British Virgin Islands (BVI) High Court to set aside voidable transactions, it did not confer the right to such grant relief exclusively on the BVI High Court. Therefore, the court refused to grant the appellants an anti-suit injunction to restrain the liquidators from pursuing proceedings in the US bankruptcy courts to recover funds paid out to the first respondent’s redeemed investors, such as the appellants, who had, through their early redemption from the fund, benefitted from the Ponzi scheme operated by the notorious US financier Bernard Madoff before it collapsed.
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