The decision

Bright J set aside an order permitting the claimants to serve the second defendant, a Panamanian company, out of the jurisdiction and to join it to the proceedings. He did so on two independent grounds.

First ground: no serious issue to be tried

An applicant for permission must satisfy the three-stage test in Seaconsar and Altimo: a serious issue to be tried on the merits; a good arguable case that the claim falls within a jurisdictional gateway; and that England is clearly the appropriate forum.

The claim against the second defendant depended on its having exercised de facto control over, and being the ultimate beneficial owner of, the companies alleged to have committed the deceit. The judge held that the claimants had not raised a serious issue to be tried on that point. Their case rested entirely on inference, and the documentary evidence identified a different person as the ultimate beneficial owner.

Second ground: the application was not fairly presented

The claimants’ evidence and skeleton did not properly address either the test for permission or the duty of full and frank disclosure. The witness statement dealt with permission in a single short paragraph, and the skeleton treated it as a formality. The three failures the judge identified each carry a lesson.

First, the most direct evidence of beneficial ownership (formal filings signed by the registered owner) had been disclosed well before the hearing, but its significance was overlooked and it was never shown to the judge. When he asked about beneficial ownership, he was told that it was purposefully undocumented, which was untrue. Disclosure received from the other side must be reviewed for material adverse to the application, and a judge’s question must be answered accurately.

Second, a statement by US counsel to OFAC, which contradicted the claimants’ case, was exhibited but presented as though it supported that case. Placing an adverse document before the court does not discharge the duty if its significance is inverted. Material against the application must be identified as such.

Third, the judge was given a misleading impression of the relationship between the second defendant and its affiliated entities: an informal association of companies was described as though the second defendant sat at the head of a corporate group. This led the judge to assume a holding company that did not exist. Corporate relationships must be described accurately, including what they are not.

The guidance

Bright J emphasised that practitioners must give serious thought to the duty of full and frank disclosure, so that without-notice applications are fairly presented.

Appendix 9 to the Commercial Court Guide sets out practice guidance on service out, together with a checklist covering each step of the application. The judge held that it should never be ignored, even where, as here, the application for permission is an adjunct to a contested application. Adopting its structure is good mental discipline, encouraging those involved to address every relevant step.

The applicant should set out its case, in the witness statement or skeleton, under headings corresponding to each of the three Seaconsar stages, with a further heading on full and frank disclosure. That may help satisfy the judge that proper care has been taken. Otherwise, the judge is likely to be concerned that these matters have received insufficient attention.

Bright J frequently refuses permission on paper where the checklist has not been completed or its structure adopted, and now considers that approach highly desirable for applications made at a hearing as well. He intends to draw his observations to the attention of his Commercial Court colleagues.

The position in the BVI

The BVI has taken a different route. Under the Eastern Caribbean Supreme Court Civil Procedure Rules (Revised Edition 2023), in force since 31 July 2023, court process falling within a gateway in rule 7.3 may be served out without permission. Instead, the claimant or its legal practitioner files and serves a certificate under rule 7.6. The certificate identifies the gateway relied upon and states the signatory’s belief that the claimant has a good cause of action, that the BVI court is the appropriate forum for the trial, and that the method of service is lawful.

If service is challenged under rule 7.8, the claimant must satisfy the court on each of those matters. The elements mirror the three stages of the Seaconsar test. Permission also remains available under rule 7.4, on a without-notice application supported by affidavit; where that route is taken, the duty of full and frank disclosure applies in the usual way.

Degroma is not binding in the BVI, but English Commercial Court authority carries considerable weight there. Its lesson translates readily: a certificate is a practitioner’s statement of belief on each limb of the test, and should be signed only after the disciplined analysis Bright J required. The BVI rules contain no equivalent of the Appendix 9 checklist, so adopting its structure when preparing the certificate is a prudent safeguard.

Would following the checklist have changed the outcome here? The judge could not be certain, but, in his words, “it should have, in theory, and it might have, in practice”.

Degroma Trading Inc v Dreter 2 Ltd and Interunity Management Corporation SA; Neriman Associates SA v Dreter 1 Ltd and Interunity Management Corporation SA [2026] EWHC 2358 (Comm)

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“Public charge” is an immigration rule generally used to determine whether an individual will be unable to financially support themselves in the future. While it primarily applies to certain immigrants applying for a green card, it can also apply to those changing, extending, or re-entering under certain immigration statuses.  The change raises concerns for employers sponsoring well-compensated individuals for adjustment of status to U.S. lawful permanent residence (or self-sponsored employees) who may be subject to the public charge rule after periods of unemployment from a company reduction-in-force (RIF).

The current rule took effect in 2022 and guides admissibility determinations for cases decided by U.S. Citizenship and Immigration Services (USCIS). The government is withdrawing the current rule, leaving us with the statute (Immigration and Nationality Act) and whatever policy guidance the government may later release on public charge.

Timing of the Change in Public Charge

The final rule applies to applications for adjustment postmarked or electronically submitted on or after September 18, 2026. The announcement also states that it will apply to benefits used after that date. The guidance has been published in the USCIS Policy Manual and instructs adjudicators on applying the public charge ground of inadmissibility. Under this guidance, adjudicators will have broader discretion to determine if an applicant is likely to become a public charge.

Adjudicators will make individualized, fact-specific public charge inadmissibility determinations based on the totality of the circumstances, including the five statutory minimum factors: age, health, family status, financial status, and education/skills. In addition to the preceding factors relevant to the case, officers will assess empirical data relevant to the applicant’s ability to remain financially self-sufficient.

Thus, officers will have broader discretion to examine the public benefits an applicant has received, the duration and extent of that assistance, and the circumstances surrounding its use. A more discretionary inquiry emerges that looks beyond the existence of a job offer and asks a broader question: “Is this individual likely at any time to become a public charge?”

This creates an inherent tension that every employer sponsoring a noncitizen worker for permanent residence should address. Many industries, especially technology, have experienced repeated workforce reductions over the past several years. Layoffs, combined with the public charge policy, may leave a company’s foreign employees more vulnerable. An employee on a work visa who experiences an interruption in employment may find USCIS broadly applying the public charge policy, potentially determining that the employee is at greater risk of becoming a public charge and denying their green card application.

Employment law concerns

Layoffs affect U.S. citizens, lawful permanent residents (LPRs), and visa holders. Layoffs (and hiring) are driven by business conditions, and employers often make such decisions regardless of immigration considerations for foreign national employees.

Those consequences do not alter the fundamental employment-law principles that govern a RIF. Employers should identify the legitimate business reasons for the reduction, whether it be restructuring, declining demand, technological change, cost savings, or shifting strategic priorities, and let those objectives determine which positions are affected.

Objective selection criteria, applied consistently and well documented, help demonstrate that decisions are based on legitimate business needs rather than protected characteristics. Because visa sponsorship often correlates with national origin, employers should not use it as a selection criterion, either to shield a sponsored employee from layoff due to potential immigration consequences or to target an employee for termination.

Employers should also determine early whether federal WARN Act or state “mini-WARN” notice requirements apply, as those obligations may affect the timing of the reduction. When foreign national employees are affected, employers should clearly set termination dates and coordinate the employment and immigration aspects of the separation.

Severance arrangements may trigger additional requirements. In group termination programs involving employees age 40 or older, releases of federal age discrimination claims must comply with the Older Workers Benefit Protection Act (OWBPA), including its disclosure and consideration-period requirements. This further underscores the importance of establishing and documenting defensible selection criteria before implementing the reduction.

The developing public-charge framework introduces another consideration for RIF planning, but it does not alter these fundamental employment-law principles. Employers can plan for potential immigration consequences while continuing to base RIF selection decisions on legitimate, consistently applied business criteria.

Conclusion

Under the “new” public charge policy, USCIS will have greater discretion to assess an employee’s long-term employment prospects when adjudicating permanent residence applications.

Employers will need to consider how they handle RIFs in light of the employment law considerations described above, while managing layoffs that affect their foreign national workers who may be in the process of adjusting their status to lawful permanent residence in the United States.

In the face of recurring layoffs in many industries, employers may determine that the strongest employment-based adjustment filings will show more than eligibility for the position. They will show, if supportable, earning capacity, employability, and financial resilience. Employers may want to review pending adjustment cases with their legal counsel and identify where additional evidence could help tell that story.

Final note: While the rescission and guidance went into effect on September 18, 2026, the changes are not retroactive. The new policy only applies to adjustment of status (I-485) applications postmarked or e-filed on or after September 18, 2026. Additionally, various cities, states, and organizations have sued challenging the new rule. Although now in effect, it is possible that the new policy may be paused or halted by the ongoing litigation.

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As some lawyers may already have experienced, recently the Land Registry has on occasion been raising requisitions requiring foreign legal opinions to be provided, specifically confirming that foreign companies applying to register dispositions of property situated in England and Wales have not been dissolved since taking ownership of the property, even if they have subsequently been restored.

Based on recent Land Registry practice, the requirement would appear to extend to the registration and enforcement of fixed legal charges.

In its new practice guide 78, the Land Registry has clarified the position as follows:

“Note: the legal effect on registered titles [which could be termination for example] owned by overseas entities that cease to exist happens automatically and is not then automatically reversed if the entity is later revived or restored under the law of the territory that governed the entity when it ceased to exist.

If we are asked to register a disposition of a registered title by an overseas entity, we may ask the applicant to provide evidence to establish that the entity had a continuous existence from the date on which it was first registered as proprietor of the title until the date of the disposition to be registered (even though it may subsequently have been wound up and dissolved). We will usually rely on a legal opinion letter from a suitably qualified lawyer in the relevant jurisdiction confirming that this has been the case.

When applying to register a disposition affecting land owned by an overseas entity, you must tell us if you believe the entity may have ceased to exist in its jurisdiction of incorporation at any time after it became the registered proprietor.  This includes a change of domicile from the jurisdiction shown in the register but does not include a status change occurring after the disposition if the registration of that disposition will remove the entity as proprietor.”

Note that the Land Registry has made it clear that “Foreign laws that provide that the restored entity is to be treated as if it had never ceased to exist generally have no effect under English law”. 

Following the publishing of the new Land Registry guidance, the prudent approach for England and Wales lawyers, and foreign lawyers opining on England and Wales property transactions, must be to ensure that an opinion is given as to the continued existence of the foreign company throughout its ownership of the property.

At Stephen Ailwood Legal, we regularly issue foreign legal opinions to the Land Registry and to other parties with respect to England and Wales property transactions involving BVI and other offshore companies.  Please contact Karen Gilbert or your usual Stephen Ailwood Legal contact for an instant fixed fee proposal for a BVI or other foreign legal opinion.  Please also contact us for general advice where, for example, a foreign company may have been dissolved and restored during the period of its property ownership.

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In a recent episode of Stephen Ailwood Legal’s Moving People podcast, James Clark, Partner specialising in data protection and digital regulation, including AI, in the UK, and Dr Peter Schneidereit, IT, data and cyber Partner in Germany, discussed what the AI Act means in practice for businesses operating in the UK and across Europe.

A law with reach beyond the EU

Although the AI Act is an EU regulation, businesses outside the EU should not assume it is irrelevant to them. As James explains, the Act can apply on an extraterritorial basis where a non-EU business places an AI system on the EU market or where the output of an AI system used outside the EU affects individuals in the EU.

For example, a UK-headquartered business selling an AI-enabled product into the EU, or using AI to make HR decisions affecting EU-based employees, may find itself within scope. For UK companies with European customers, employees or operations, this makes the AI Act a practical compliance issue rather than a purely European legal development.

Understanding the risk-based framework

The AI Act does not regulate every AI system in the same way. Instead, it uses a risk-based model. Certain AI practices are prohibited outright, including social scoring, some forms of biometric surveillance and systems designed to manipulate behaviour or infer emotions in the workplace.

The most significant obligations apply to “high-risk” AI systems. These include AI systems used as safety components in regulated products, such as medical devices, and systems used in areas such as recruitment, credit decisions, insurance and other contexts where AI may materially affect people’s rights, safety or access to essential services.

For businesses, the first step is therefore to map which AI systems they develop, buy, sell or deploy; identify whether they are acting as a provider or deployer; and classify each system by risk level. Only then can organisations determine which obligations apply.

Why GDPR compliance is not enough

While comparisons have been made between GDPR and the EU AI Act, Peter highlights an important distinction that the AI Act is not, at its core, a data protection law. While data protection remains highly relevant, particularly where personal data is used to train or operate AI systems, the AI Act is closer to product safety regulation. Its focus is on whether AI systems are designed, deployed and monitored safely.

That means existing GDPR programmes may be useful, but they will not provide a complete roadmap. Organisations – particularly those in regulated sectors – should instead look to their product safety, risk management, quality assurance and post-market surveillance frameworks, then assess what AI-specific controls need to be added.

Transparency and generative AI

The Act also introduces transparency obligations for certain AI systems, including generative AI tools and so-called deepfakes. Providers may need to ensure AI-generated content can be detected through machine-readable marking, while deployers may need to provide clear, human-readable notices where AI-generated or manipulated content is presented to the public.

As Peter notes, the definition of a deepfake under the AI Act is broader than many businesses may expect. It can extend beyond celebrity impersonations or false statements to AI-generated images, video or audio that portray people, places, objects or events in ways that did not actually occur.

The UK’s different approach

The UK has not adopted an equivalent to the EU AI Act. Instead, its approach is decentralised and regulator-led, with existing regulators such as the ICO, FCA, Ofcom and CMA expected to apply AI principles within their own remits. These principles include safety, transparency, fairness, accountability and contestability.

For businesses operating in both the UK and EU, however, there will often be significant practical overlap. The governance steps required for AI Act compliance – mapping systems, assessing risk, documenting controls, ensuring human oversight and managing data protection issues – are also likely to support good practice under UK regulatory expectations.

Practical next steps

James and Peter say that businesses should start by building an inventory of AI systems and use cases, identifying whether they are providers or deployers, classifying systems by risk, and reviewing existing governance frameworks. For high-risk systems, organisations should assess gaps in areas such as risk management, data quality, technical documentation, human oversight, incident reporting and audit readiness.

As James and Peter emphasise, the AI Act is still a developing area. The wording is broad in places, guidance is evolving and enforcement will depend partly on national authorities in each EU member state. A pragmatic, documented and risk-based approach will therefore be essential.

To hear the full discussion, including practical examples for UK businesses, EU-regulated sectors and deployers of AI systems, listen to the full podcast here.

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From 1^st of October 2026, that will be the standard. The Federal Tax Authority Decision No.13 of 2026 is introducing enhanced supplier and transaction verification requirements on a simple premise, that a valid invoice is no longer the end of enquiry.

For finance, procurement, tax and legal teams, the practical shift is that due diligence which may once have been informal, now has become a documented, repeatable control.

What has changed

The decision applies to taxable persons registered, or required to be register, for UAE VAT. Before deducting input tax, the recipient must verify two things

1. The identity and legitimacy of the supplier; and
2. The commercial and factual circumstances of the supply itself.

The recipient must be able to demonstrate that the transaction is genuine, commercially justified, properly priced, connected to the supplier’s licensed activities and supported by reliable records.

There is a limited exception where the consideration for a supply, excluding VAT, is below AED 10,000. This is narrower than it appears.

The exception only applies to genuine low value transactions which fall under the threshold of AED 10,000, if you deal with the same supplier, and the total value of the same supplier exceeds, or is expected to exceed, AED 100,000 across the preceding or following twelve-month period, the allowance disappears. It is a threshold for individual low-value supplies, not a blanket exception therefore businesses dealing repeatedly with the same counterparty should not rely on it.

What is required to verify the Supplier

Verification will be required whenever a business deals with a supplier for the first time, or where the supplier has not been verified in the preceding twelve months. For corporate suppliers, this goes well beyond just collecting the trade license. The recipient must verify the incorporation through official database or a certificate, confirm those details against the supplier’s name, address and workforce, and identify the individual authorised to represent by obtaining a valid Emirates ID or passport for that person.

It must also satisfy that the supplier has a genuine place of business, either electronically or a site visit where warranted. The premises should fit the nature of its activity.

Incorporation documents cannot be read in isolation, all the requirements mentioned above should reasonably line up with the transaction in question.

If the supplier is a natural person, the requirements are lighter and include valid proof of identity, and a meeting (virtual or in person) before the supply is made.

The onboarding process should distinguish between the two rather than apply generic checklist.

Verifying the transaction

Alongside the supplier, each taxable supply must be assessed on its own terms. That assessment looks at the purpose of the purchase, rational for engaging a particular supplier, whether the goods or service were in fact received, whether the transaction is consistent with the recipient’s own activities, and whether the supplier’s role is commercially explainable, and the pricing sits within market norms.

In practice, this is where providing just an invoice alone looks thin. A defensible file will connect that invoice to the surrounding commercial record such as purchase order, engagement letter or contract, the delivery note, or completion certificate.

Payment, pricing and the AED 375,000 threshold

Payment methods must be commercially justifiable. Where a third party makes or receives payment or funds go to another account outside the supplier’s country of incorporation, the recipient should hold a reasonable explanation supported by evidence.

Generally, payments should be electronic as they leave a clear trail. In the event that payment is made by cash it will need to be supported by documented commercial reasons and must be easily verifiable.

To put it simply – pay in a normal, reasonable way, and if you do something unusual, be able to explain why.

Pricing also attracts scrutiny, any significant departure from market conditions should carry a clear explanation such as unusual specifications, urgency, scarcity or specialised expertise.

Larger relationships attract an additional layer to all of this. Where supplies from a single supplier exceed, or are expected to exceed, AED 375,000 over a twelve-month period, the recipient must obtain written confirmation from an authorised UAE bank that the supplier maintains a bank account, and that it has no relevant reservations attached (meaning no red flags or conditions on the account). This bank confirmation doesn’t need to be addressed to the recipient, it is simply to prove the supplier holds a valid bank account.

Practical Affects in Business

Perhaps the most consequential requirement is that the verification process itself must be documented. Verification becomes a governance matter as informal checks are not enough if the organisation cannot later show what was checked, when, by who and on what basis it was approved.

For legal teams, the decision reaches into advisory and compliance. Clients will need help building the verification process the decision requires – : onboarding checklist, the mandatory written policy, escalation rules for risky suppliers and record- retention agreements.

If we also look at supplier and consultant agreements these should now be drafted so the client can actually satisfy these checks, accurate licensing representations, confirming signatory’s authority, warranties about the payment account and notice of any change to it, delivery/acceptance evidence, right to request documents and cooperation with FTA audits

The bottom line

FTA Decision No 13. of 2026 raises the bar for what a taxable person must show before deducting input VAT or when dealing with a transaction above the AED 10,000 threshold: it is not enough merely that an invoice exists, but that the supplier has to be genuine, the transaction commercially justified, and the goods or services are within the supplier’s legitimate activities. The final test is a simple one: if the FTA asked, could the business explain its verification of a given supplier and transaction from the records it holds?

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None of this makes prediction markets conceptually new. Wagering on the outcome of future events, and taking financial positions on the movement of prices, rates or indices, are both long-established activities. What has changed is the infrastructure. Smart contracts and blockchain-based settlement now allow a market to be created, traded and settled without a conventional bookmaker, broker or exchange sitting at the centre of the transaction, and without any inherent limit on the type of event a market can reference.

This creates a genuine classification problem. A prediction market can look like a bet in some respects and a financial derivative in others, and in some cases plausibly resembles both at once. BVI legislation, however, is not concerned with how an activity feels commercially. Instead, each statute defines specific activities and products, and regulation follows from whether a given arrangement falls within those definitions. The task for any BVI entity involved in a prediction market structure is therefore to ascertain what a participant is acquiring, what determines its value, and what function the BVI entity performs in creating, operating or facilitating the arrangement. Two BVI statutes call for particular attention: the Virgin Islands Gaming and Betting Control Act, 2020, as amended (the “Gaming Act”), and the Securities and Investment Business Act, 2010, as amended (“SIBA”). Where digital assets are used, the Virtual Assets Service Providers Act, 2022, as amended (the “VASP Act”) also warrants consideration.

What is a prediction market?

Structures vary between platforms, but the basic mechanic is consistent. A market is built around a future event with an objectively verifiable outcome, and participants trade “YES” or “NO” shares tied to that outcome. At settlement, a “YES” share pays US$1.00 if the event occurs and nothing if it does not. A “NO” share pays the reverse. Because these shares trade continuously up to settlement, the market price at any given moment reflects participants’ collective view of the probability of the event occurring. For example, a “YES” share trading at US$0.65 implies the market currently prices the event at roughly a 65% chance of happening.

Contracts have been built around interest rate decisions, elections, sporting results, corporate events and even weather. Unlike a traditional fixed-odds bet, a participant is not locked in until the event resolves. Positions can be bought and sold throughout the life of the market, so a gain or loss can be crystallised well before the underlying outcome is known. In that respect, the product behaves more like a short-dated, continuously priced derivative than a conventional wager, even where the subject matter of the market is exactly what one would expect to find at a bookmaker.

The growing use of stablecoins adds a further dimension relevant to offshore structuring. Polymarket, for example, settles positions in USDC over public blockchain rails. That combination of derivative-like mechanics, gambling-adjacent subject matter and digital-asset settlement means a single platform can, in principle, touch several different areas of BVI financial services and gaming regulation at once.

The BVI regulatory landscape

The BVI has no legislation drafted specifically for prediction markets or event contracts. A BVI entity involved in launching, operating or supporting such a platform must instead work through legislation designed with other business models in mind. None of the statutory regimes referenced above treats “prediction markets” as a defined category, so the analysis has to be done at the level of the individual contract and the relevant BVI entity’s role, rather than by reference to how the platform brands itself.

The Gaming Act: gaming, betting, and betting transactions

The Gaming Act is the natural starting point of any analysis. It reversed the BVI’s historical prohibition on gambling and introduced a licensing regime overseen by the Gaming and Betting Control Commission. Section 29 of the Gaming Act prohibits a person from participating in a wide range of gaming and betting activities without an appropriate licence, and those activities extend well beyond running a casino or sportsbook. They include, among others, owning or operating a gaming machine location, performing a function connected with a licensed gaming or betting activity, manufacturing, supplying or repairing gaming equipment or software, and providing facilities for betting of any kind, or providing or utilising premises for gaming or betting. On its face, this language reaches infrastructure and technology providers as readily as the counterparty accepting the wager.

As presently constituted, the Gaming and Betting Control Commission contemplated by the Gaming Act has not yet been fully established. This leaves a practical gap for any BVI entity trying to comply. Any structure intending to operate, or provide services to, a prediction market platform should factor this gap into its risk assessment and its timeline.

Whether a particular prediction market falls within the Gaming Act then turns on three separately defined terms that do not map neatly onto everyday usage of the words “gaming” and “betting”.

This produces an odd result in practice. A market on a horse race sits squarely within “betting”, while a market on an election or a central bank decision does not, even though the two are economically indistinguishable in that they both involve a fixed stake and a binary outcome. The gap is narrowed, though not closed, by the separate concept of a “betting transaction”, which is not limited to sport and appears independently in operative provisions of the Gaming Act, including the restrictions on using premises to facilitate such transactions. Both concepts were revisited in a 2021 amendment to the Gaming Act, and the distinction between them was preserved rather than aligned. This suggests that the narrower scope of “betting” reflects a deliberate legislative choice rather than an oversight.

The practical consequence is that a non-sporting prediction market cannot simply be assumed to fall outside of the Gaming Act. It is unlikely to meet the narrower definition of “betting”, but it may still meet the broader definition of a “betting transaction” if it involves fixed-odds or pool-style wagering on an event. Structure therefore matters more than subject matter because whether the Gaming Act applies turns on how the market is built and operated, not on whether the underlying event happens to be a football match, an election, or something else entirely.

Does BVI incorporation alone matter?

A related question is whether a BVI entity’s involvement is, by itself, enough to trigger either regime, even where all operational activity happens elsewhere. SIBA and the Gaming Act take different approaches to this point. On the one hand, SIBA expressly deems a BVI business company that carries on investment business outside the BVI to be carrying on that business from within the BVI, so incorporation alone is sufficient to bring offshore activity within scope. On the other hand, the Gaming Act contains no equivalent deeming language. In its absence, the better view is that the jurisdictional question turns on where the licensable activities actually occur, where facilities are provided, and what the BVI entity actually does, rather than on the place of incorporation alone. That said, because the Gaming Act does not expressly limit its own territorial reach, the position is not free from doubt, and we would advise against assuming that operating entirely outside the BVI automatically puts a BVI company beyond the Gaming Act’s scope.

SIBA: is the contract an investment?

SIBA prohibits carrying on investment business in or from the BVI without a licence unless an exemption or exclusion applies. As noted above, a BVI company’s offshore investment business is deemed to be carried on from within the BVI regardless of where its operations actually sit.

Classification under SIBA turns on two important questions. Firstly, is the contract or token traded on the platform an “investment” under schedule 1 to SIBA? Secondly, if so, does the BVI entity’s involvement – including dealing, arranging, managing, or advising in investments, or operating an investment exchange – amount to regulated investment business?

Most prediction market contracts do not constitute options or futures because they rarely confer a right to buy or sell an underlying asset or provide for future delivery of property. The potentially more relevant category is the contract for differences. Ordinarily understood as a derivative tracking the price of an underlying financial asset, SIBA’s own definition is considerably wider. It captures any contract designed to secure a profit or avoid a loss by reference to fluctuations in the value or price of property, or in “an index or other factor designated for that purpose in the contract”. A binary contract on an election, a rate decision, or a corporate transaction fits this description surprisingly well because the occurrence or non-occurrence of the relevant event is capable of being the designated “factor” by which profit or loss is measured, irrespective of the underlying subject matter.

This is not to say that every prediction market contract is a contract for differences and the definition must be tested against the specific terms of the contract in question. However, it does mean that the SIBA analysis cannot be limited to markets on conventional financial products.

Operating an investment exchange

Even where the underlying contract is a SIBA investment, it is important to consider whether operating the platform itself amounts to operating an investment exchange. SIBA defines this as providing a facility – electronic or otherwise – for the orderly trading or listing of investments among members of the exchange. A platform that lets participants trade event contracts that resemble contracts for differences against one another could fall within this definition, in which case the operator may need an investment business licence.

The mechanics of the specific platform, rather than its marketing description, are important in ensuring that the classification is correct. Smart-contract-based matching is not obviously different, for these purposes, from a conventional order book because both perform the same function of bringing buyers and sellers together on defined terms. A platform also does not fall outside the scope of SIBA scope because it calls itself “decentralised”. Instead, what matters is which identifiable persons retain control over the interface, the underlying code, the admission of new markets, or the liquidity that makes trading possible. Those persons’ roles then need to be tested individually against SIBA’s categories of investment business.

The VASP Act

A platform that settles positions using digital assets brings the VASP Act into the analysis as well. Depending on how the platform is structured, exchanging, transferring or holding custody of virtual assets on behalf of participants is likely to constitute a “virtual assets service” requiring registration with the BVI Financial Services Commission.

This sits alongside, rather than replaces, the SIBA analysis. The VASP Act’s definitions carve out certain products already regulated under other BVI financial services legislation, so whether a contract qualifies as a SIBA investment can itself affect how it is treated under the VASP Act. As with the Gaming Act and SIBA, using blockchain technology does not automatically bring a platform within the VASP Act. The relevant question remains which activities the BVI entity actually performs.

Bringing the analysis together

Pulling the three regimes together, a “prediction market” is not a single regulatory category under BVI law. The same platform can produce different answers for different contracts, and a single-label approach to compliance is unlikely to hold up. Rather than running through an exhaustive checklist, most of the analysis can be captured by three broader questions:

• What does the contract actually reference, and how does it settle? The precise event, and whether the arrangement runs on a fixed-odds, pool, or other basis, determines whether “betting”, “betting transaction” or SIBA’s “contracts for differences” definition is engaged.
• What does the BVI entity actually do? Whether the entity merely provides infrastructure, controls admission of new markets, holds client assets, or matches trades determines which regulated activities, if any, it is performing, and under which regime.
• Where does everything actually happen? The location of activities, facilities, counterparties and, where relevant, the platform’s control functions will affect the jurisdictional analysis differently under each regime.

Corporate governance considerations

Beyond the licensing analysis, prediction markets raise governance questions that will be familiar from other emerging-asset contexts, but which apply here with particular force given the potential difficulties of classifying the underlying product.

Directors of a BVI company considering exposure to prediction markets should first confirm that doing so falls within the company’s corporate capacity and any investment mandate set out in its memorandum and articles of association, or agreed with shareholders. Even where such exposure is constitutionally permissible, directors remain subject to their fiduciary and statutory duties. Accordingly, directors must act in good faith in the best interests of the company, exercise their powers for a proper purpose, and generally exercise reasonable care, skill and diligence. Losses arising from prediction market exposure could found a derivative claim by shareholders alleging that directors acted imprudently or outside their mandate, particularly where the classification of the underlying contract is itself contested.

Accounting treatment follows from classification. Depending on whether a position is ultimately characterised as a bet, a derivative, or another form of financial instrument, it may need to be recorded at fair value, tested for impairment, or disclosed as a contingent exposure. A failure to record or disclose a material position correctly can itself generate governance and reporting disputes independent of the underlying legal characterisation question.

Practical takeaways for BVI structures

Some practical takeaways for BVI structures are as follows:

• Analyse contract by contract, not platform by platform. A single prediction market may offer contracts that are properly gambling products under the narrower definition of “betting”, contracts caught only by the broader concept of a “betting transaction”, contracts that are SIBA investments (including as contracts for differences), and contracts that involve a virtual asset.
• Don’t assume non-sporting events sit outside the Gaming Act. The concept of a “betting transaction” is not confined to sport and may catch political, economic or corporate event contracts that fall outside the narrower definition of “betting”.
• Treat the CFD analysis under SIBA as a live issue for any binary contract. The “other factor” language in SIBA’s definition of “contract for differences” is broad enough to capture event contracts with no connection to conventional financial markets.
• Map jurisdiction separately for each regime. SIBA’s deeming provision brings offshore investment business within scope regardless of where it is conducted. The Gaming Act has no equivalent provision, though its own silence on territorial reach means the position is not entirely free from doubt either.
• Build in controls for user-generated markets. A platform that allows users to create new markets should have governance in place to prevent newly created contracts from inadvertently shifting the platform into regulated territory.
• Revisit corporate governance. Confirm corporate capacity for prediction market exposure, and ensure that directors are compliant with their duties.
• Expect the compliance gap to persist for now. With the Gaming and Betting Control Commission not yet operational, entities that conclude that a Gaming Act licence is required may face a practical gap between the legal obligation to be licensed and the ability to obtain that licence. This should be built into risk assessments and timelines.

Conclusion

Prediction markets illustrate a familiar pattern when new technology arrives faster than legislation designed around older business models. That is not the same as a regulatory gap. The Gaming Act, SIBA and the VASP Act each supply a framework capable of capturing relevant prediction markets activity, but the legislation is not drafted with “prediction markets” as a defined category. The result is that any classification must happen at the level of the individual contract and the relevant BVI entity, not at the level of the platform’s brand.

For persons considering a BVI structure, the practical task is to work systematically through the Gaming Act’s three overlapping definitions, SIBA’s schedule 1 categories (including contracts for differences), and the VASP Act’s registration triggers, before deciding how a given contract or platform should be treated. Doing that early, contract by contract, is considerably more cost-efficient than resolving the question after a platform has already gone live.

Next Steps

If you want to know more about the content of this article, please contact Peter Vas below.

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. This article was last updated on 16 September 2026.

[1] What are Prediction Markets? The Future of Real-time Trading and Forecasting | INN

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The Building Safety Act 2022 (the “Act”) is the UK’s landmark piece of legislation affecting how high-rise buildings are regulated in light of the Grenfell Tower disaster and also addressing how historic building safety defects are dealt with. A body of case law drawing on the Act is starting to take shape and it is possible to identify a theme that indicates, initially at least, a positivity with the Courts to prioritise the interest of residents and pursue those responsible for building safety failings.

These decisions follow on from the UK Government’s announcements during 2026 concerning remediation and the regulation of construction products. These developments taken together indicate a more cohesive approach to dealing with building safety and the cladding matters that have come to light since the Grenfell disaster.

Crest Nicholson Regeneration Ltd v Ardmore Construction Ltd (In Administration) [2026] EWHC 789 (TCC)

The decision in Crest Nicholson came in the first quarter of 2026 before the Technology and Construction Court (“TCC”). The Court was asked to make Building Liability Orders (“BLOs”) against Ardmore Construction Limited (in administration) (“ACL”) and related companies. BLOs were one of the most controversial components of the Act where corporate liability is imputed to companies other than the company that would ordinarily be considered liable for the defect. BLOs are Court orders that allow liability for a building safety matter to be passed to an associated company.

The dispute related to a residential development in Portsmouth constructed between 2007 and 2009. The First Defendant, ACL, was appointed by Crest Nicholson Regeneration Limited (“Crest NRL”) to carry out the design and construction of the properties. Investigations that took place to the properties following the Grenfell Tower disaster indicated that the “external wall systems” were unsafe and an unacceptable fire safety risk to residents. It was also alleged that internal fire safety defects were identified at the development. The nature and scale of the defects led to a pre-action protocol litigation process being commenced by Crest NRL followed by an adjudication process in May 2025 aimed at recovering the remediation costs from ACL.  The adjudication found that ACL was in breach of contract as a result of the fire safety defects in the Development – ACL entered into administration at around the same time as the adjudication decision.

Subsequently, the Claimant parties (“Crest”) commenced Court proceedings against the Defendant Parties (“Ardmore”) to obtain i) a BLO against a number of the Ardmore parties for liability that ACL might owe and ii) a BLO against a number of Ardmore companies for the adjudicator’s award against ACL.

Ardmore’s case centered on the argument that it was too early to determine a BLO before the hearing of the facts at a full trial. The reasoning put forward in support of Ardmore’s position was that a Court might reach a number of different positions based upon evidence that could only be dealt with through examination at trial. HHJ Constable was persuaded by a number of factors including decisions in Willmott Dixon Construction Ltd v Prater [2024] EWHC 1190 (TCC), 214 ConLR 164 and Southwark Park Road RTM Company Limited v Click St. Andrews Limited [2024] EWHC 3179 (TCC) that there was no requirement for liability to be established before a BLO can be made. In doing so he differed in approach to the ‘full trial’ argument made by Ardmore.

The Court’s position being: “Ultimately, whenever the application is heard, it may only be acceded to where the Court concludes that, at the point it is making the BLO, it is just and equitable to do so.”.

The enforcement of the adjudicator’s award through the making of a BLO drew upon the interim nature of adjudications with the statutory basis for their enforcement based upon the statutory requirement for Court action: – “Its interim status does not mean that, pending any trial, it somehow does not create a liability. It plainly does. ”. The key to the decision was then whether pursuant to s.130 of the Act, the adjudicator’s decision was a ‘relevant liability’. The Court, relying upon the liability findings of the adjudicator, which were “presently binding” on Crest and ACL, agreed that the BLO should be made.

The decision is a key indicator that BLOs are an active tool that the Courts are willing to make use of at an interim stage to ensure that liability for building safety defects is managed and determined in the interests of residents. In doing so, the TCC looked favourably on ensuring that responsibility for the remediation process was not unnecessarily delayed by proceedings being issued following an adjudication. Permission to appeal has been granted, given the significance of the decision.

HB (Wm) Ltd & Ors v Sto Ltd & Ors  [2026] EWHC 1833 (TCC)

A further recent interim application decision in the TCC emphasised how the Court will approach the issue of liability owed to leaseholder/building owners by manufacturers under s.149 of the Act 2022 (Liability for Past Defaults). The case is notable for tackling the issue of BLOs that are targeted against companies domiciled outside of the jurisdiction.

The decision involved three sets of proceedings brought by different developers (Redrow, Lendlease, Barratt (the ‘Claimants’)) against three related companies (“Sto”) – i) Sto Limited (in administration)  – a supplier and manufacturer of Sto products), ii) Sto SE & Co KGaA (supplier of ‘wall systems in bulk’ to Sto Limited) and iii) Stotmeister Beteilgungs GMBH (the majority shareholder in the second defendant, both domiciled in Germany. The first defendant is domiciled in Scotland and proceedings against it are stayed).

The Claimants had carried out or are in the process of carrying out remedial works to high-rise buildings with works funded by the UK Government’s Building Safety Fund. Accepting that they are responsible for remediation costs in the first instance, the Claimants commenced proceedings against Sto by way of contribution on the grounds that Sto was responsible for the cladding. HHJ Moody highlighted the ‘Redrow’ set of proceedings – where the second and third defendants proceeded to make applications to set aside service out of the jurisdiction as well as an application to set aside an extension of time for service.

As mentioned, each of the substantive claims was brought under the Civil Liability (Contribution) Act 1978 on the grounds that the Defendants were liable to building owners for the ‘same damage’ within the meaning given by s. 1 of the Civil Liability (Contribution) Act 1978.

The underlying liability advanced against Sto included i) a liability for Sto Limited and Sto SE & Co KGaA to persons with a relevant interest pursuant to s.149 of the Building Safety Act 2022 and ii) a liability under section 130 of the Building Safety Act that it was ‘just and equitable’ for a BLO to be ordered against Sto SE & Co KGaA and Stotmeister Beteilgungs GMBH with respect to the liabilities of Sto Limited.

The decision is notable for its assessment of s.149 of the Act, which provides a cause of action for liabilities arising from cladding product installations.  The first issue of note was whether permission to serve a claim form out of the jurisdiction was valid – that decision was upheld. The issue of significance, which was dealt with in some detail in the judgment, examined whether the claim against the second defendant pursuant to s.149 had real prospects of success. Given the absence of a successful product test compliant with BS8414-1 or BS8418-2, the Court concluded that there a real prospect of success were the claims to proceed to trial, the conclusions in Okpabi v Royal Dutch Shell Plc [2021] UKSC 3 being acknowledged.

Mr Justice Moody left open the question under s.1 of the Civil Liability (Contribution) Act 1978  as to whether same damage under a BLO could amount to ‘same damage and/or liability to the same person’ – as a matter that would need to be determined against the facts. The non-binding view that emerged from the judgment was that there was a realistic prospect of the same damage argument successfully engaging. Of significance was the Court’s treatment of extra-territoriality and relying on Cox v Ergo Versicherung [2014] UKSC 22, the Court was persuaded that the right approach was to determine the applicable law and that extra-territoriality had no relevance to the issues in question. The issue of whether an application to set aside time for an extension to service of the claim form against one of the Claimants was determined in line with Libyan Investment Authority v JP Morgan [2019] EWHC 1452 (Comm) and the application was refused. Contractors will make particular note of the indication given by the Court as to how recovery actions against third parties by way of contribution might be pursued through the Act.

The application of s.149 is important. Whilst this decision arises from an application to set aside service, the interim decision is indicative of the circumstances when a Court may be persuaded that the product in question was defective or that marketing of its material was misleading.

Summary

Both decisions are important and give direction as to how the Courts are interpreting and acting on cases reaching them on building safety matters. The ambition of bringing about remediation promptly is a clear theme as is efficient case management. The use of BLOs as part of that process and the application of s.149 of the Act are starting to become decisive tools in that process. The Crest Nicholson decision is open to appeal and, assuming the appeal is heard, some prospect remains that the Court of Appeal may take a different view on the use of BLOs in this instance.

The development of decisions with the intention of putting right building safety issues remains a constant tenet in these decisions. Contractors, insurers and construction industry organisations will wish to pay attention to the decisions and look, in particular, at the determination regarding s.149, which is likely to influence future approaches to building safety liability.

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In a speech at the Manufacturing Technology Centre in Coventry, Chancellor John Healey said the Government would take action to address a system in which major projects can face repeated legal challenges, consultations and reviews before construction begins. The proposals would extend restrictions previously announced for critical energy projects to all major infrastructure schemes, with the aim of preventing what the Chancellor described as “vexatious litigation” from blocking economic growth.

Dispute Resolution Partner, Paolo Caldato, said the Chancellor’s approach should be welcomed in principle, but warned that it is unlikely to remove legal challenge altogether.

“The Chancellor’s plan to shield Critical National Importance Projects from standard judicial reviews is a welcome step for national resilience. In practice, however, it will not stop ‘lawfare’; it will simply force it to evolve.

This proposal is caught between two fundamental, contradictory tensions. Constitutionally, bypassing standard judicial oversight risks eroding democratic accountability and executive checks and balances. Practically, leaving a human rights safeguard opens an obvious loophole. Because the UK remains a signatory to the ECHR, legal challengers will simply re-shape their claims around Article 8 rights.

The real victory for the Treasury won’t be stopping legal challenges entirely, but compressing the calendar. By forcing these inevitable human rights battles into a hyper-accelerated court timetable, the government may successfully prevent legal actions from causing the multi-year construction delays that have historically paralysed British infrastructure.

It remains to be seen, of course, whether these proposals will survive the inevitable backlash that the Chancellor will face from backbench Labour MPs.”

Paolo was featured by The Times, The Legal Diary, Construction News, Law Society Gazette

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The proposed powers would allow regional leaders to introduce an Overnight Visitor Levy, adding a small charge to overnight stays in hotels and other accommodation.

Internationally, similar levies are already used in many major visitor destinations, often with funds directed towards infrastructure, sustainability measures or the maintenance of historic and cultural assets.

Stephen Ailwood Legal Partner Penny Paddle said the announcement by Prime Minister Andy Burnham has reignited significant debate.

“Supporters argue that the levy can ease the financial strain on seasonal hotspots providing additional funding to areas such as local infrastructure, waste management, and emergency services, which are impacted by the burden placed on them by a seasonal influx of tourists and are currently subsidised by local taxpayers or are simply unable to keep up with demand. Allowing tourist hotspots to collect a small nightly fee ensures that visitors contribute directly to the upkeep of the places they enjoy, mirroring successful models already used across Europe.

However, critics express deep concern over the timing and impact of a “holiday tax,” especially on domestic travellers. Opponents argue it unfairly penalises British families choosing staycations and could hurt the hospitality sector by driving tourists toward cheaper, tax-free destinations. There are also fears that the administrative burden of collecting the levy will fall heavily on struggling local B&Bs and independent accommodation providers.

With increasing global instability and more families choosing to staycation, one thing is clear, the impact of ever increasing tourist numbers on local communities cannot be ignored. It remains an issue which continues to divide communities and only time will tell whether or not the critics fears will be realised.”

Penny’s comments featured in Event Planner News and The Legal Diary.

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The declaration forms part of South Africa’s Customs process and is completed through the South African Traveller Management System (SATMS). Travellers are generally required to provide their passport or travel-document details, travel and contact information and details of travelling companions. They must also disclose goods, currency or bearer negotiable instruments that are required to be declared, including goods exceeding the applicable duty-free allowances, restricted or prohibited goods and goods of a commercial nature. Ordinary personal effects for the traveller’s own use generally do not need to be declared.

The declaration must generally be submitted no more than 24 hours before departure from the country from which the traveller is travelling. Where a journey to South Africa involves connecting flights or stops, it should be submitted no more than 24 hours before departure on the final leg of the journey to South Africa. After submission, SARS issues an electronic confirmation containing instructions that the traveller must follow at the relevant port of entry or exit.

Although advance online submission is now required, SARS states that a traveller will not be refused entry into or departure from South Africa solely because the declaration was not completed beforehand. Where a traveller could not submit it electronically because of lack of internet access, system failure or another reasonable ground, assistance is available at the entry point and, in limited circumstances, a paper declaration may be used.

The purpose of the system is to simplify Customs compliance while allowing SARS and other authorities to improve cross-border monitoring, data integration and risk management. Failure to make a proper declaration, or making a false declaration, can result in delays, detention or forfeiture of goods, penalties and potentially other enforcement action under Customs legislation.

The declaration can be completed through the SARS Customs Online Traveller Declaration portal (https://www.sars.gov.za/travellerdeclaration) or through the SATMS mobile application.

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