The Commercial Court has refused to grant anti-suit relief for a derivative action brought in the British Virgin Islands. The Claimants alleged that the action breached an exclusive jurisdiction clause in the shareholders’ agreement, but the Court held that a derivative action is a special kind of claim, and not caught by the Litigation Prohibition in the agreement.
The decision means that Swan Bitcoin can bring a derivative action on behalf of 2040 Energy for selling assets at undervalue, wrongly diverting contracts, and stealing trade secrets.
Brief background facts
The Claimants in the action were Tether Investments (Tether), a stablecoin giant, and 2040 Energy Limited (2040 Energy), which is the joint venture between Tether and Swan Bitcoin.
2040 Energy was set up to carry out bitcoin mining and Tether and Swan Bitcoin structured the business so that Swan would manage the mining operations while Tether provided funding. Tether had a 79% stake in the entity and Swan Bitcoin had 20%. Tether provided more than $400 million of financing to 2040 Energy, the majority of which is said to remain outstanding.
The relationship between Tether and Swan Bitcoin broke down in mid-2024. The team at Swan Bitcoin that made up the “mining team”, resigned and joined another company called Proton.
In March 2026, Swan Bitcoin applied for leave in the BVI to bring a derivative action in the name of and on behalf of 2040 Energy. The intention of the derivative action is the alleged diversion of business opportunities by Tether and others to third parties, including the company, Proton, which had replaced Swan Bitcoin as manager of 2040 Energy’s business.
The recent application by Tether sought an anti-suit injunction to restrain the derivative action.
The Litigation Prohibition
The shareholders agreement included an exclusive jurisdiction clause in favour of the English court, but the Claimants did not content that the BVI leave application should be brought in England. Instead, Tether argued that no leave application can properly be made by Swan Bitcoin anywhere in the world, due to the ‘Litigation Prohibition’ in the agreement.
The Litigation Prohibition prevents Swan Bitcoin from carrying out ‘reserved matters’ without Tether’s consent. The institution of legal proceedings is one of those reserved matters.
Tether’s case was that the Litigation Prohibition is expressed in wide enough terms to include a derivative action brought in the name of and on behalf of 2040 Energy.
In contrast, Swan Bitcoin’s position was that the Litigation Prohibition covers claims instituted by 2040 Energy or its subsidiaries, not claims, such as the proposed derivative claim, which is instituted by Swan Bitcoin.
Derivative claims are not caught by the prohibition
In making his decision, Mr Sean O’Sullivan KC (sitting as a Deputy High Court Judge) considered that a derivative claim is a special kind of claim brought by a shareholder in the name of a company. As such, it is not characterised as a claim instituted by the company.
It is the member, or the shareholder, who is taking that active step, not the company.
He found it unattractive for derivative claims to be precluded by an “anodyne” prohibition such as the one used in the shareholders agreement. These types of Litigation Prohibitions are common in joint venture situations. The restrictions are concerned with controlling what the company does. However, the intention is not to take away the substantive rights of the minority shareholders. Judge O’Sullivan KC concluded that if that were the intention, different words would be used.
He did not consider that the drafters had in mind the “niche concept” of a derivative action when they prepared the Litigation Prohibition. Neither does it follow that an action which is instituted by Swan Bitcoin should be treated as being instituted by 2040 Energy.
The derivative proceedings brought by Swan Bitcoin would therefore not give rise to a breach by 2040 Energy of the Litigation Prohibition.
For those reasons (among others), the anti-suit injunction was refused.
Comment
The legal fallout of the joint venture illustrates again that JV relationships can be fraught and can quickly unravel. The bitcoin mining industry is in its early stages and JVs will be necessary to match up funding ability with technical knowledge. However, as this case demonstrates, the minority shareholders will still have recourse if the relationship sours, or the JV entity is not managed correctly.
Read the judgment here: Tether Investments, S.A. de C.V. & Anor v Electric Solidus, Inc. (t/a Swan Bitcoin) [2026] EWHC 1652 (Comm)
