Anti-suit injunctions and the Madoff Ponzi scheme

The company in liquidation had been part of the multi-billion dollar Madoff Ponzi scheme. Investors purchased shares in the company, which in turn invested in Bernard L Madoff Investment Securities LLC (“BLMIS”). When investors sought to withdraw their investment, BLMIS provided fraudulent valuation reports to support an inflated share value. Investors who redeemed their shares early made a profit, but those who retained their investments long term lost everything.

The liquidators started proceedings in the United States against investors who had redeemed their shares at the artificially inflated value, citing British Virgin Islands’ Insolvency Act 2003 whereby the Court was empowered to set aside voidable transactions (akin to preferences and transactions at undervalue).

The investors sought an anti-suit injunction to prevent the liquidators from proceeding with the US claims, which was refused. A number of appeals ensued leading to the Privy Council decision. 

The key issue was whether the statutory regime in the BVI conferred an exclusive jurisdiction on the local court to set aside voidable transactions. 

The Privy Council held that there was no such limitation. It is a matter for each foreign court from which the BVI office-holder seeks assistance to determine whether it can use the statutory tools under the BVI legislation. 

The Privy Council also observed that it is not uncommon for courts in one country to apply to the insolvency law of another when giving assistance to the latter. The fact that different foreign courts may exercise their discretion differently from one another did not prohibit foreign courts from exercising that discretion.

It is a question for the US courts as to whether they should apply the BVI law as requested by the liquidators.

There was no question of vexatious or oppressive litigation here to justify an injunction. The appeal was refused.

UBS AG New York and others v Fairfield Sentry Limited (in liquidation) and others [2019] UKPC20

Our content explained

Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

Mills & Reeve Sites navigation
A tabbed collection of Mills & Reeve sites.
My Mills & Reeve navigation
Subscribe to, or manage your My Mills & Reeve account.
My M&R


Register for My M&R to stay up-to-date with legal news and events, create brochures and bookmark pages.

Existing clients

Log in to your client extranet for free matter information, know-how and documents.


Mills & Reeve system for employees.