March 15, 2018, Hong Kong – The cooperation between the British Virgin Islands (BVI) and Hong Kong Courts is unparalleled according to a panel of legal experts convened by BVI House Asia on 13 March to discuss the ways in which the BVI and Hong Kong courts cooperate on issues regarding BVI structures in Asia.
The panel of experts was coordinated and moderated by Ian Mann, Partner, Litigation & Insolvency, Harneys, and included Jose-Antonio Maurellet SC, Des Voeux Chambers; Guy Norman, Crisis Management Partner, Deloitte China; and John Marsden, Partner, Mayer Brown JSM.
Ms. Elise Donovan, Director, BVI House Asia, welcomed the 80 attendees in the audience and introduced Mr. Mann, who introduced the other panelists.
Topics the panel discussed included factors behind the BVI’s popularity in Hong Kong and Asia; examples of how BVI companies are used; whether Hong Kong or the BVI are better locations for litigation; the kinds of cases adjudicated by both the BVI and Hong Kong; specific case examples; and case management.
“BVI litigation is highly respected,” said Mr. Mann. “While some Hong Kong companies may end up in litigation, what’s important is the jurisdiction in which they are incorporated. If that jurisdiction is the BVI, it is well respected for its judiciary and the quality of its litigation.”
Mr. Mann observed that the high level of judicial cooperation between BVI and Hong Kong courts is not replicated anywhere else in the world. For example, under the parallel scheme of legal arrangments between the two jurisdictions, a case begun in Hong Kong can continue the same day in the BVI without interruption.
Despite the high level of legal cooperation between Hong Kong and the BVI, Mr. Mann recommended that regulations be made easier for Hong Kong silks to appear before BVI courts.
The kinds of cases that may come before the BVI courts or Hong Kong courts, which the panelists discussed, include insolvency cases, contentious trusts, contested probate, shareholder disputes, or injunctions in support of Hong Kong proceedings.
Mr. Maurellet endorsed the BVI’s judiciary, noting that “BVI courts and judges enjoy a high level of trust and are very knowledgeable.” A large percentage of offshore lawyers in Hong Kong are BVI-qualified lawyers, he said.
Mr. Norman observed that BVI companies are flexible, easy to use and easy to set up and are used globally, 75 percent of Chinese offshore clients use BVI structures. According to the 2017 Capital Economics report, “Creating Value: The BVI’s Global Contribution,” 35 percent of active BVI companies originate from China and Hong Kong alone and roughly 75 percent of Hong Kong’s Hang Seng Index is made up of companies with direct linkages to the BVI. In addition, every company listed on the Hang Seng Index with ties to the BVI has on average 35 BVI business companies attached to it.
Mr. Marsden cited surveys that show the United States users in the region also have a positive view of BVI companies, and that they are preferred over all other offshore jurisdictions. That is due in large measure to the BVI court system, which deals with matters expeditiously, economically and proportionately, and has as its highest court of appeal the London Privy Council.
Mr. Norman said BVI companies were often used for holding companies, corporate subsidiaries, property holdings, estate planning and for investment vehicles.
Two thirds of company cases heard in Hong Kong will involve BVI companies, Mr. Maurellet added.
“I want to thank our panelists not only for sharing their experience and knowledge, but also for the quality of their insights and the breadth of topics covered, “ Ms. Donovan said at the close of the discussion.
The panel discussion was held in Amphitheatre A at the Hong Kong General Chamber of Commerce.