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Security over a BVI Company’s Shares

February 2013 Richard G. Evans

Some secured creditors like to take English law security over shares in a British Virgin Islands company because English law provides the remedy of appropriation, a remedy which is not available under BVI law. Appropriation was a new remedy to English law. In effect it permits a sale by the collateral-taker to himself, at a price determined by an agreed valuation process.

On 30 January 2013, the UK Privy Council delivered (another) judgment in the long-running dispute between creditor Alfa Telecom Turkey Ltd (“Alfa”) and Cukurova companies. The key issue before the Privy Council was whether relief from forfeiture by way of appropriation pursuant to English law governed share security could or should be granted on equitable grounds.

 

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Richard G. Evans
Partner

British Virgin Islands   +1 284 852 1115


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