BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Matthew Cowman, Alex Drysdale, Rosalind Nicholson and Omonike Robinson-Pickering, Walkers
9.3 Common Defensive Measures It is possible for a BVI company to structure its Memorandum and Articles of Association to pro - vide protection from a change of control through “poison pill” or similar provision. Examples of such defensive measures include the ability to issue blank cheque preference shares, stag - gered boards, the removal of directors only by a supermajority vote, and restrictions on the ability of shareholders to requisition meetings. 9.4 Directors’ Duties The board of a BVI company will be required to comply with its fiduciary duties in respect of any proposed acquisition (such as the directors’ duty to act honestly and in good faith and in what the director believes to be in the best interests of the company); see 8.1 Principal Directors’ Duties . 9.5 Directors’ Ability to “Just Say No” Any right of the directors to “just say no” and take action that prevents a business combination will be subject to the requirement to comply with their fiduciary duties in respect of their good faith consideration of any bid, whether unsolicited or not, and an assessment as to whether or not the business combination would be in the best interests of the company, noting that as long as a decision of the directors is made in good faith and for a proper purpose, the BVI courts will not concern themselves with the merits of the deci - sion from a commercial perspective.
appointment of a panel of appraisers to deter - mine fair value. Litigation otherwise in connection with M&A deals is rare, not least because many deals will include provisions for arbitration for disputes arising out of or in connection with the deal. 10.2 Stage of Deal Where disputes do arise, they are more likely to arose post- rather than pre-deal, not least because any action by way of litigation directed at preventing a deal from proceeding is likely to require the applicant to accept liability for any damage the prohibitive action may cause, should the action ultimately turn out not to have been justified. 10.3 “Broken-Deal” Disputes In the absence of BVI statute or local precedent, BVI law will ordinarily follow and be guided by English law – for example, on whether the doc - trine of frustration applies to relieve a party from its contractual obligations in circumstances such as those that occurred in the COVID-19 pandemic. Under English law, the relevant test would require the party seeking to be relieved to show that the obligation is incapable of being performed, rather than being merely difficult or burdensome. That being the case, parties may include an express clause in their deals, going forward, which deals with the eventuality of another pandemic and the consequences they agree are to flow from such an event.
10. Litigation 10.1 Frequency of Litigation
11. Activism 11.1 Shareholder Activism
In common with other jurisdictions, BVI legisla - tion provides remedies to members of the com - pany dissenting from a merger. Those remedies operate entirely without the court and involve the
BVI companies are typically held by foreign investors and, as such, are subject to activism forces in those countries. When shareholders
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