Asset Tracing in The Bahamas: An Overview

08/03/2018

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As a jurisdiction, the Bahamas has limited Pre‑Action/ Pre‑Judgment asset tracing tools. Public searches of the Registry of Records and the Companies Registry can confirm the ownership of assets such as real property, and shareholdings in companies with which the wrongdoer is known or suspected to be affiliated, or through which the wrongdoer is suspected of having funnelled funds. A limitation of searching the Companies Registry lies in the fact that more often than not, the shares are held in the names of nominees, and therefore a search may not disclose the name of the beneficial owner.

Post‑Judgment, there are more tools available to assist in identifying assets as discussed below in point 3.

1. Is any information about assets publicly available?
Information is publicly available on the ownership of real property, and the share ownership in companies. In respect of the latter, it is subject to the aforementioned limitation concerning shares being held in the names of nominees.

2. What steps can be taken to obtain information to identify asset holders (whether third party or wrongdoer/adverse party) or the assets?
As against third parties
There is provision under Order 39 rule 1 of the Rules of the Supreme Court whereby the Court in relation to any cause or matter, and in the interest of justice, may require a deposition to be taken from any person. 

As against the wrongdoer
Pre-Action/Pre-Judgment, there is no means to compel a party to identify his assets; save where injunctive relief is obtained, and such disclosure is necessary to enable that injunction to be policed.

Post-Judgment, an Order for Examination can be conducted against a person and any officer of a Company to compel them to disclose their assets. Insolvency proceedings can also be used to gain control of the affairs of a wrongdoer by way of appointment of a Trustee in Bankruptcy, Receiver, or Liquidator, who can identify, gather, and realise any available assets.

3. Can steps be taken to protect/preserve assets on an interim basis?
Yes. Order 29 rule 2 of the Rules of the Supreme Court expressly provide for interim preservation Orders in respect of any property forming the subject matter of an Action.

4. What are the requirements for obtaining a freezing injunction (if available)?
To obtain a freezing injunction a party must have a cause of action against the wrongdoer.

There must be a risk that the assets will be transferred or dissipated so as to prevent the enforcement of any judgment that may be obtained. 

A freezing order can be made in respect of an asset held by or under the control of the wrongdoer including assets held by an innocent third party for or on behalf of the wrongdoer, such as a bank with whom the wrongdoer maintains an account. However, innocent third parties are entitled to vary the Order as need be, and typically are awarded their costs on an indemnity basis, subject only to the qualification that such costs were reasonably incurred.

An undertaking in damages must be given to compensate the wrongdoer in the event the court finds that the freezing injunction ought not to have been granted. 

5. What assets can be frozen and do they have to be within the jurisdiction?
Any assets in the possession of or under the control of a wrongdoer can be frozen. They must be within the jurisdiction.

6. What about a search order?
A Search Order can only be made in respect of and enforced against premises within the jurisdiction.

7. Can a freezing injunction or search order be obtained in support of proceedings outside of the jurisdiction?
Yes. However there must be a subsisting cause of action within the jurisdiction and the court must have territorial jurisdiction over the wrongdoers. The court will not grant a “free-standing” injunction, ie where there is no substantive cause of action within the jurisdiction against the Defendant.

8. Can a freezing injunction obtained from a foreign court be enforced against assets in the jurisdiction?
The Reciprocal Enforcement of Judgements Act allows enforcement of Judgments and Orders which have been made in specified countries.

FOR MORE INFORMATION CONTACT:
Surinder Deal
Partner

*Previously published in TerraLex’s Guide to Tracing Assets Around the World, 2018 

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