Court affirms conclusively the ability of BVI companies to indemnify their officers

The Guernsey court has issued an emphatic judgment in relation to the question whether a British Virgin Islands (“BVI”) company is prohibited from indemnifying its officers against a cause of action against its former directors vested in the company itself. The comprehensive judgment reviewed the BVI’s International Business Companies Act 2004 and in particular sections 132 and 54 and concluded that, whilst BVI companies are prohibited from excluding the personal liability of their officers, the statute leaves open to those companies the choice as to whether to allow those officers any form of indemnity and to what extent.

In reaching this conclusion, and deciding that the company had to pay the directors’ defence costs on the indemnity basis, the judge accepted, without hesitation, Robert Levy QC’s expert evidence on BVI company law.

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