Security For Costs And Off-Shore Companies

There has been much press comment recently about the nature of "offshore companies" and in particular those incorporated in the British Virgin Islands which has only limited requirements for provision of any company information.  While for UK domiciled companies historic information on their financial position is publicly available from their accounts filed at Companies House, the same is not true of companies incorporated in the British Virgin Islands.

The opaque nature of the financial position of one BVI company came before the English Court of Appeal in the case of Sarpd Oil International Limited v Addax Energy SA and Another [2016] EWCA Civ 120.

This case concerned an appeal about security for costs in an international purchase contract.  Sarpd Oil International Limited ("Sarpd") had bought a quantity of gas oil from Addax Energy SA ("Addax").  Sarpd alleged that the gas oil did not meet the specification so claimed damages from Addax.  There was a dispute as