BVI Commercial Court Case Notes - June 2011

Trial on preliminary issues

One of the largest cases in the BVI Commercial Court this year is the litigation brought by the liquidators of Fairfield. Fairfield is a BVI fund which was a major feeder fund into Bernie Madoff's company. The liquidators commenced actions against multiple defendants including a who's who of financial institutions alleging that redemptions ought to be refunded to the liquidators as they were made based on mistaken net asset values. On 20 April Bannister J handed down a judgment ordering a hearing of certain preliminary issues, requested by the defendants. The application was contested by the liquidators. The Court balanced the potential pitfalls of the preliminary issues procedure but found that preliminary issues based on an interpretation of one part the articles of association, and an argument on good consideration were suitable for determination by preliminary issue.