1. INTRODUCTION 

1. Cross-border insolvency proceedings routinely require courts to navigate complex questions of jurisdiction, recognition, and cooperation in circumstances where corporate structures, debtor’s assets and/or stakeholders are dispersed across multiple jurisdictions. Offshore jurisdictions are often at the forefront of these disputes, not only because they are often the situs of shares, investment vehicles, special purpose vehicles and trusts, but also because of the specialised legal frameworks and regulatory benefits these jurisdictions provide.  
2. Among these offshore jurisdictions, the British Virgin Islands (“BVI”) is of particular interest to cross-border insolvency practitioners. In the BVI, the cross-border insolvency regime remains primarily common-law driven, with the courts exercising broad, discretionary powers grounded in English law to appoint liquidators, recognise foreign proceedings, and deal with assets located within the BVI, even where the debtor is incorporated abroad. On the other hand, international commercial courts of offshore financial centres like the Dubai International Financial Centre (“DIFC”), and Abu Dhabi Global Market (“ADGM”) occupy an important position for cross-border insolvency proceedings spanning the Middle East. 
3. The recent decision of the High Court of the British Virgin Islands (“BVI HC”) in AICO v Al Aggad (“AICO”) presents instructive perspectives.^[1]  In AICO, the BVI HC confirmed that it could appoint a liquidator over a dissolved foreign (Bahraini) company to investigate and pursue approximately US$ 60 million in assets allegedly misappropriated during an improper liquidation process in Bahrain. In doing so, the BVI HC highlighted the breadth of Section 163 of the BVI Insolvency Act 2003 (“BVI IA”). While this is parallelly reflected in other offshore insolvency regimes, such as the ADGM, and the DIFC, these jurisdictions impose distinct statutory and jurisdictional thresholds for winding up dissolved foreign companies.  
4. Accordingly, this insight first outlines the novel aspects of the AICO decision, focusing on the BVI HC’s reasoning in permitting the winding up of a dissolved foreign company (Section II), and then contrasts this approach with the frameworks of the DIFC and ADGM courts to illustrate how differences in their statutory regimes may shape the availability of comparable relief (Section III).  

2. an overview of the decision in AICO 

1. Brief Factual Background 

5. This dispute revolved around the liquidation of AICO Bahrain, a Bahraini company owned by Omar Al-Aggad (“Omar”), his wife Malak Murad (“Malak”), and their four children: Rana, Tarek, Talal, and Lama. AICO Bahrain’s most valuable asset comprised approximately 20.7 million shares in Arab Palestinian Investment Company Limited (“APIC”), a BVI-incorporated company whose shares were traded on the Palestinian Stock Exchange.  
6. In and around August 2018, at an extraordinary general meeting (of which neither Rana nor Malak allegedly had notice), the remaining siblings, Tarek, Talal, and Lama, voted to liquidate AICO Bahrain. During the liquidation process, Tarek transferred 19,425,218 shares in APIC (“APIC Shares”) to Aggad International Investment Company Limited (“AIIC”), which was a BVI-incorporated company wholly owned and controlled by him for no consideration. This transfer, effected by Tarek and not the Bahraini liquidator appointed over AICO Bahrain, was recorded by the Palestinian Stock Exchange as having been made “without payment”. Eventually, AICO Bahrain was dissolved in May 2021 without proper distribution of assets to either Rana or Malak, despite the liquidation being solvent. 
7. Once AICO Bahrain was formally liquidated, there were no routes available under Bahraini law to either AICO Bahrain or any of its shareholders to reopen the company’s affairs and trace the allegedly improper transfer of the APIC Shares and pursue claims involving them. More importantly, since the shares were held by AIIC, they constituted assets situated in the BVI. Consequently, Rana commenced proceedings against AIIC, Tarek and Talal (“Respondents”) before the BVI HC to recover these APIC Shares on the basis that the Respondents had either by way of unlawful means and conspiracy, sought to deprive her and Malak of the APIC Shares or alternatively, had been unjustly enriched by the transfer of the APIC Shares.   
8. Before the BVI HC, Rana obtained the following reliefs:  
   
   1. First, on 12 October 2023, she procured a freezing order restraining AIIC from dealing with or dissipating its assets within the BVI. Relevantly, however, such order froze neither a sum equivalent to the full value of the APIC Shares nor the full amount of dividends in the APIC Shares that ought to have been received by AIIC since the date of the transfer.  
   2. Second, on 7 March 2024, the BVI HC granted Rana an ex parte order putting AICO Bahrain in provisional liquidation and appointed Mr Aaron Gardner as provisional liquidator (“PL”). The PL immediately sought proprietary relief over the APIC Shares on behalf of AICO Bahrain against AIIC. The PL further sought an ex parte notification injunction against AIIC in respect of the APIC Shares. A few days later, on 11 March 2024, the BVI HC granted a notification injunction against AIIC, requiring AIIC to notify the BVI HC before seeking to dispose of any APIC Shares.  
9. Unsurprisingly, on 29 April 2024, the Respondents moved to set aside the BVI HC’s orders granting provisional liquidation and notification injunction (“Set-Aside Application”). 
10. The central issue before the BVI HC was whether it had the jurisdiction to order the liquidation of AICO Bahrain, given that it had already been dissolved in Bahrain, where it was incorporated, and, if so, whether it ought to exercise its discretion to order such liquidation.  

2. The Decision of the BVI HC 

11. AICO represents the first reported judgment in which the BVI HC exercised its powers under Section 163 of the BVI IA to wind up AICO Bahrain even though it was already dissolved in its place of incorporation. The BVI HC dismissed the Set Aside Application; granted Rana’s application for the appointment of a liquidator over AICO Bahrain; and also continued the provisional liquidation over AICO Bahrain and the notification injunction against AIIC, as granted by previous orders. 
12. In doing so, the BVI HC examined three foundational issues: (i) whether Rana possessed the standing to bring an application under Section 163 by virtue of being a “member” within the meaning Section 162(2)(c); (ii) whether AICO Bahrain as the foreign company had demonstrated a sufficient connection to the BVI by way of retaining assets in the jurisdiction in terms of Section 163(1)(d) and Section 163(2); and (iii) whether the BVI HC ought to exercise its general discretion under Section 163 to appoint a liquidator over AICO Bahrain.  

Rana’s standing 

13. Rana argued that she had standing to appoint a liquidator over AICO Bahrain on three bases, of which the BVI HC accepted one: that Rana was “a member” of AICO Bahrain because she inherited 4,000 AICO Bahrain shares upon the death of Omar.^[2]  
14. Section 163(1) provides that the categories of persons who may bring such an application ought to be those specified in Section 162(2) of the BVI IA – these include “a member” as specified at Section 162(2)(c). Section 2 of the BVI IA defines a member as “a person to whom shares in a company have been transferred or transmitted by law”.^[3] In a nutshell, Rana’s standing to apply for the winding up of the dissolved AICO Bahrain under Section 163 turned on whether she was a valid member of AICO Bahrain in terms of Section 162(2)(c) of the BVI IA. 
15. Rana submitted that she was a valid member of AICO Bahrain, given that she owned 4,000 shares in AICO Bahrain. Rana contended that after Omar passed away intestate in Quebec, Canada, where he had been domiciled, she was vested with one-third of Omar’s estate under Quebec law. She submitted that her application was valid under Sections 163(1)(b) and (d) since it was just and equitable in the circumstances for a liquidator to be appointed over AICO Bahrain and because AICO Bahrain had been dissolved in its country of registration, respectively. The Respondents argued that AICO Bahrain was ultimately a Bahraini, and not a BVI, company and that any reference to a member in Sections 2 and 162(2)(c) implied a member in a BVI company alone. They also argued that Rana failed to fulfil three requirements, being: (a) a sufficient interest in the shares of AICO Bahrain;^[4] (b) which exceeded her mere beneficial ownership of the APIC Shares (which was insufficient);^[5] and (c) the liability to contribute to the assets of AICO Bahrain.^[6] They contended that a mere beneficial owner would not be a person to whom shares had been transferred or transmitted by law, in terms of Section 2 of the BVI IA. 
16. Despite some reservations, the BVI HC found that the 4000 shares had indeed vested automatically by operation of law in Rana upon Omar’s death and that in relation to these shares at least, she has a sufficient interest to qualify her to apply for the appointment of a liquidator over AICO Bahrain. Therefore, since she was someone to whom shares in a BVI company had been transferred or transmitted by law, she not a mere beneficial owner of these shares. The BVI HC also noted that Section 163 does not provide a more restrictive meaning for a member of a foreign company than for a member of a BVI company. Hence, Rana was a valid member of AICO Bahrain. 

AICO Bahrain’s sufficient connection to the BVI  

17. As a starting point, an application by a person under Section 162(2) and Section 163(1)(d) of the BVI IA empowers the BVI courts to appoint a liquidator of a foreign company if such a company, “has a connection to the Virgin Islands and […] the company is dissolved or has otherwise ceased to exist under or by virtue of the laws of the country in which it was last registered”. Section 163(2) confirms that, “a foreign company has a connection with the Virgin Islands only if – (a) it has or appears to have assets in the Virgin Islands; (b) it is carrying on, or has carried on, business in the Virgin Islands; or (c) there is a reasonable prospect that the appointment of a liquidator of the company under this Part will benefit the creditors of the company”.  
18. Rana argued that AICO Bahrain had or appeared to have the APIC Shares with the situs of those shares deemed to be the BVI. In support of her argument, she produced AICO Bahrain’s audited accounts by Ernst & Young, which consistently recorded AICO Bahrain as beneficially owning the APIC Shares for years after their transfer to Tarek. The Respondents contested this on the basis that Rana had failed to establish that a valid trust was formed for APIC Shares. Moreover, the validity of such a trust would be governed not by BVI law directly but, upon the application of the BVI conflict of laws rules, by either Jordanian law (being where Tarek resided) or Palestinian law (where the APIC Shares were listed). The Respondents further argued that such a trust was invalid under both these systems of law. 
19. The BVI HC emphasised that Rana had to fulfil the relatively low threshold contained in Section 163(2)(a) of the BVI IA by which a foreign company, like AICO Bahrain, could demonstrate a connection to the BVI if it “has or appears to have assets” in the jurisdiction. The BVI HC accepted Rana’s evidence of Ernst and Young’s audited accounts to be compelling.^[7] On this basis, the BVI HC found that the fact that AICO Bahrain appears to have beneficially owned the APIC Shares prior to its dissolution demonstrated a sufficient connection to the BVI to satisfy the test in Section 163(2)(a).  

The BVI HC’s discretion to appoint a liquidator over AICO Bahrain 

20. Section 163(1) provides that the BVI HC “may” grant an application for the appointment of a liquidator over a foreign company, although the BVI HC appreciated that it did not stipulate how such discretion was to be exercised.^[8] 
21. Rana argued that the legal test to determine the exercise of such discretion was whether “there is a realistic possibility of some benefit to one member coming from winding up”.^[9] This required a low threshold of proof at the level of a good arguable case or a serious issue to be tried. Moreover, Rana submitted that while it would be sufficient if she alone were to benefit from the liquidation of AICO Bahrain, in the present case, so would Malak, who had also suffered from the fraud perpetrated by the Respondents. Consequently, Rana alleged that she was entitled to act on the estate’s behalf in the BVI to collect its assets. It was sufficient in this respect for a potential claim to be identified that required further investigation by the PL. In her submissions, Rana alluded to the strength and quality of the evidence that the APIC Shares were fraudulently misappropriated, as well as the fact that Bahrain was not a forum available to her in which to litigate.  
22. The Respondents argued that several reasons militated against the exercise of this discretion. The Respondents asserted that since the Bahraini law provided a remedy for the administration of AICO Bahrain’s assets after its dissolution, the BVI HC ought not to intervene. The Respondents contended that the liquidation in the BVI served no benefit to any creditors of AICO Bahrain. The PL had not identified any creditors for nearly a year since his appointment – a fact which the Respondents found unsurprising given that AICO Bahrain was solvent on its liquidation in Bahrain. Moreover, a majority of the members of AICO Bahrain (specifically Tarek, Talal and Lama) opposed the liquidation. The Respondents alleged that Rana had only brought proceedings in the BVI for the collateral purpose of securing funding for her other legal proceedings. 
23. The BVI HC found that Rana demonstrated a good arguable case that the exercise of discretion under Section 163 was warranted. The BVI HC noted that Section 163 did not limit the Court’s discretion only when the company was insolvent or where it had creditors, and that such discretion could be exercised to serve the interest of justice or where it sought to facilitate investigations to remedy serious fraud on members of the foreign company. Confirming that in the present case, it was concerned not just with the merits of a commercial decision taken by the shareholders of AICO Bahrain but instead with an alleged serious fraud perpetrated by the majority shareholders of AICO Bahrain, the BVI HC accepted Rana’s evidence that such a fraud had been perpetrated by Talal and Lama, as well as Tarek. For these reasons, the BVI HC found that the interests of justice would not be served by allowing what appeared to be a serious and high-value fraud to remain un-investigated and unchallenged.  

3. The Significance of AICO for Cross-Border Insolvency  

24. The novelty of AICO lies in the BVI HC’s express application of Section 163(1)(d) that it may appoint a liquidator over a foreign company even where it has been dissolved in its place of incorporation. More interestingly, the built-in safeguards of Section 163 present the BVI as a sophisticated but insolvency-friendly jurisdiction. 
25. Consider the statutory deeming mechanism in Section 163(2)(a) of the BVI IA by which a foreign company must demonstrate a connection to the BVI if it has or appears to have assets in the jurisdiction. This test is expansively framed and does not require a final determination of proprietary rights. By permitting inquiry where evidence suggests the existence of potentially recoverable assets, the statutory framework prevents complex factual disputes concerning ownership or control of foreign-held shares from collapsing at the jurisdiction stage.  
26. Similarly, consider the BVI HC’s broad-based approach to appointing a liquidator “in the interests of justice” where an alleged serious fraud appears to have unfolded. Although the BVI HC maintained that the Respondents would be afforded the opportunity to defend themselves against the allegations of fraud against them, it remained alive to the jurisdictional dilemma with respect to the APIC Shares. In appointing a liquidator to investigate the fate of the APIC Shares, the BVI HC noted that it would be wrong to accord greater weight to the wishes of those who appeared to have perpetrated and subsequently benefited from an alleged fraud than to the wishes of the putative victims of the alleged fraud.  
27. The BVI HC’s reasoning belies the vigilance that is necessary from courts of offshore jurisdictions. AICO establishes that BVI courts may intervene even where the primary liquidation process has concluded or been manipulated, provided assets in the BVI remain potentially recoverable and statutory thresholds are met. 

3. EXPLORING PARALLELS IN OFFSHORE COURTS OF THE MIDDLE EAST 

28. The decision in AICO presents an intriguing parallel for the international commercial courts of the DIFC and the ADGM, given the prominence of the DIFC and the ADGM as international financial centres in the Middle East. One interesting question is whether these courts might permit a similar appointment of a liquidator in respect of a dissolved foreign company under their respective statutory frameworks. However, a much more interesting analysis comes from the fact that despite the conceptual similarities these regimes share, they impose jurisdictional requirements that distinctly shape the contours of such a relief in each jurisdiction.  

1. Before the DIFC Courts  

29. Given the DIFC’s popularity as an international financial centre, it is interesting to consider how a relief like that granted in AICO will play out in the DIFC. The DIFC Insolvency Law No. 1 of 2019 (“DIFC Insolvency Law”) contains broad, expansive powers that clearly contemplate dealings with an overseas entity provided that it carried on business in the DIFC or has assets within the DIFC. However, before addressing the statutory basis for such a relief in the DIFC, it is necessary to consider the distinction between foreign companies in the DIFC.  
30. DIFC legislations differentiate between foreign companies that have registered in the DIFC and foreign companies that have not. A “Recognised Company” in the DIFC Insolvency Law is identified as a “Foreign Company” that has been registered under the DIFC Companies Law (Law No. 5 of 2018) (“DIFC Companies Law”).^[10] By contrast, a “Foreign Company” is defined as a body corporate incorporated in any jurisdiction other than the DIFC.^[11] This is a key distinction because it subjects Recognised Companies to a more well-pronounced regime than Foreign Companies.  
31. First, Article 119(1)(c) of the DIFC Insolvency Law expressly permits the DIFC Courts to wind up a Recognised Company if, among other reasons, it “has been dissolved or deregistered in its place of origin”. This provision is materially similar to Section 163(1)(d) of the BVI IA. It appears uncontroversial that the reasoning adopted in AICO to interpret Section 163(1)(d) of the BVI IA would be of persuasive value to the DIFC Courts to appoint a liquidator to wind up a Recognised Company under Article 119(1)(c).  
32. Second, and unlike with Recognised Companies, there is no explicit provision permitting the DIFC Courts to wind up Foreign Companies which have been dissolved or deregistered in their place of origin. It seems likely by this omission itself that the drafters of the DIFC Insolvency Law did not intend to treat Foreign Companies in the same manner as Recognised Companies. Consequently, the DIFC Courts do not possess the discretion to wind up a dissolved Foreign Company.  
33. However, Article 117(1) permits the DIFC Courts to assist with a foreign main proceeding. It provides that when “a Foreign Company is the subject of insolvency proceedings in its jurisdiction of incorporation, the Court shall, upon request from the court of that jurisdiction, assist that court in the gathering and remitting of assets maintained within the DIFC”. This creates an intriguing situation for the DIFC courts, which can be called upon to assist courts of the jurisdiction of incorporation of a Foreign Company subject to three conditions, (i) such assistance can only be sought while the Foreign Company is undergoing insolvency proceedings before the courts of its jurisdiction of incorporation; (ii) such assistance might only be offered after a request from the court of the jurisdiction of incorporation was made; and (iii), the Foreign Company must maintain assets in the DIFC.  
34. In creating this distinction between Foreign Companies and Registered Companies, the DIFC Insolvency Law departs from the UK Insolvency Act 1986 (“UK IA”). Part V of the UK IA deals with the winding up of “Unregistered Companies”, which is defined under Section 220 to mean “any company except the company registered under the UK Companies Act, 2006”. Section 221(3) of the UK IA confirms that for the purposes of winding up an Unregistered Company is deemed to be registered in England and Wales or Scotland, and its principal place is deemed to be seated in the jurisdiction where the winding up application is filed.  Section 221(5) then allows for winding up of an unregistered company: (a) if it is dissolved or has ceased to carry on business in the country of its origin, (b) if it is unable to pay its debts, or (c) the court is of the opinion that it is just and equitable for the company to be wound up. 
35. The DIFC Insolvency Law does not adopt this legal fiction. Instead, it distinguishes its treatment of foreign companies on the basis of registration within the DIFC, whereby the ability to wind up a dissolved foreign entity is only confined to Recognised Companies under Article 119 of the DIFC Insolvency Law. In doing so, the DIFC Insolvency Law adds an additional layer of compliance to obtain the relief than its counterpart in the BVI, which expressly authorises foreign companies, whether or not they are registered in the BVI.  

2. Before the ADGM Courts  

36. An equally interesting comparative for the DIFC’s cross-border insolvency regime is that of the ADGM. The ADGM Insolvency Regulations, 2022 (“ADGM IR”) establish a creditor-focused framework broadly modelled on the UK IA.  
37. Chapter 1 of Part 6 of the ADGM IR deals with the winding up of non-ADGM companies. These are referred to as “Unregistered Companies” and include an association or a non-Abu Dhabi Global Market Company as registered pursuant to the ADGM Commercial Licensing Regulations 2015, but do not include a “Company” within the meaning of the ADGM Companies Regulations 2020.^[12] A Company is defined as a company formed or registered under the Companies Regulations, 2020 (whether or not incorporated under the Companies Regulations, 2020).^[13] 
38. Section 266(5) of the ADGM IR allows for an Unregistered Company to be wound up if it “is dissolved or has ceased to carry on business or is carrying on business for purpose of winding-up its affairs”. This is similar to Section 163(1)(d) of the BVI IA as well as to Article 119(1)(c)(i) of the DIFC Insolvency Law.  
39. However, such winding up is subject to three mandatory conditions as contained in Section 266(4)(a)-(c) of the ADGM IR lays down:  
40. In terms of Section 266(4)(a), the Unregistered Company has to have a sufficient connection to ADGM, which may (but does not necessarily have to) include ownership over assets located in ADGM. This is broader than its equivalent Section 163(2)(a) of the BVI IA, which requires a foreign company to have or appear to have assets in the BVI.  
41. Under Section 266(4)(b), there must exist a real prospect that winding up the Unregistered Company will benefit the party applying for this. This is similar to Section 163(2)(c) of the BVI IA.  
42. In terms of Section 266(4)(c), if the ADGM Courts have jurisdiction over one or more persons interested in the distribution of assets of the Unregistered Company. This is unique to the ADGM and requires the demonstration of in personam jurisdiction over one or more persons interested in the distribution of the assets of the unregistered company.  
43. The ADGM goes a step further than both the BVI IA and the DIFC Insolvency Law in insulating its insolvency regime from any misuse. Not only does it require the dissolved foreign companies seeking its assistance in appointing a liquidator to sustain a sufficient connection with the ADGM, but it also requires the persons interested in the distribution of the assets of such a dissolved foreign company to fall within the in personam jurisdiction of the ADGM Courts. This renders the ADGM the most stringent of the three jurisdictions discussed in this insight. It is worth recalling that, should the dispute between Rana and her siblings in AICO have unfolded before the ADGM Courts (instead of in the BVI), Rana, as a Saudi citizen resident in Canada, would likely not have been able to demonstrate that she fell within the in personam jurisdiction of the ADGM Courts. This requirement of in personam jurisdiction over the applicants is not a requirement under BVI law and did not merit consideration in AICO.  
44. Yet, this is exactly the sort of additional legislative ring-fencing that will make future decisions of the ADGM Courts on Sections 265 and 266 interesting statements in cross-border insolvency. It remains to be seen how the ADGM Courts interpret the in personam jurisdiction requirement in Section 266(4)(c), which appears in neither the BVI IA nor the DIFC Insolvency Law. 

4. CONCLUSION  

45. The decision in AICO highlights why offshore jurisdictions such as the BVI, DIFC, and ADGM play a critical role in modern asset-recovery frameworks. They possess the statutory provisions and judicial flexibility required to intervene where onshore regimes cannot. By demonstrating that a court can appoint a liquidator over a dissolved foreign entity to redress cross-border wrongdoing, AICO provides a powerful roadmap for multi-jurisdictional cross-border insolvency disputes.  
46. In comparison to its DIFC and ADGM counterparts, the BVI regime emerges as the most expansive in terms of its cross-border insolvency reach. The DIFC appears to adopt a more compliance-focused, recognition-based approach and curtails the replication of the relief in AICO to those dissolved, foreign companies that are registered in the DIFC. The ADGM regime narrows this relief in AICO even further by requiring prospective applications seeking the winding up of dissolved foreign companies to fulfil three cumulative jurisdictional requirements. 
47. Despite the varying breadth and impact of this relief across the BVI, the DIFC and the ADGM, a coherent legislative policy connects all three jurisdictions i.e., each recognises the need to protect assets and stakeholders connected to their respective jurisdictions. AICO thus serves as a meaningful comparative reference point for offshore jurisdictions seeking to strengthen their cross-border insolvency frameworks and ensure that dissolved foreign companies cannot circumvent judicial scrutiny through technical dissolution abroad. This makes AICO a noteworthy development with the potential to shape cross-border insolvency regimes across offshore jurisdictions.