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BASSETERRE, ST. KITTS, June 7, 2026 — The Eastern Caribbean Supreme Court of Appeal has delivered a significant judgment in a high-profile Nevis international banking case involving the Regulator of International Banking, Petrodel Investment Advisers (Nevis) Limited, Michael J. Prest, and Bank of Nevis International Limited (BONI).

The judgment, delivered on June 2, 2026, examined whether the Banking Regulator had the lawful authority under the Nevis International Banking Ordinance (NIBO) and related regulations to issue restrictive directives and impose fines and penalties totalling US$120,000 against BONI.

At the heart of the appeal was a series of letters issued in June 2021, including correspondence restricting the activities of BONI’s shareholder and ultimate beneficial owners, as well as a June 25, 2021 letter imposing fines and penalties of US$120,000 for what was described as BONI’s alleged delay in providing requested information concerning the appointment of Michael J. Prest as BONI’s Chief Executive Officer.

The Court of Appeal found that the lower court judge had made an error when he proceeded on the basis that all parties agreed the Banking Regulator’s authority came from the Financial Services Regulatory Commission Act. The Court made clear that there was no such consensus and that the Banking Regulator had in fact relied on NIBO and the Nevis International Banking Regulations as the source of his authority.

However, after considering the matter afresh, the Court of Appeal still reached a decisive conclusion: the Banking Regulator was not lawfully authorized to issue the cease-and-desist-type restrictions or impose the US$120,000 in fines and penalties under the provisions relied upon.

In one of the most consequential findings, the Court held that Regulation 12(4) of the Nevis Island Banking Regulations could not lawfully support the imposition of the fines. The Court found that the regulation exceeded the authority granted under the parent legislation and ran afoul of the limits imposed by the Interpretation Act. As a result, the Court described the Banking Regulator’s reliance on that regulation as “misconceived.”

The Court further held that it was not permissible to imply, from the legislative framework, a broad power allowing the Banking Regulator to impose such fines and penalties. It found that the regulation-making power under NIBO did not expressly authorize the Minister to prescribe fines at the level contemplated, and that the penalty provision exceeded the statutory limit.

The ruling means the Court upheld the essential outcome that BONI was entitled to have the US$120,000 fine quashed and repaid, together with applicable interest.

However, the Banking Regulator scored a partial victory on the issue of legal costs. The Court accepted that, under section 30(8) of NIBO, the Banking Regulator was protected from liability where he acted in good faith while purporting to discharge functions under the Ordinance. The Court found that the Banking Regulator had acted in good faith and was therefore not liable to pay the legal costs arising from the judicial review proceedings in the court below.

The judgment is likely to attract significant attention across the financial services sector, particularly in Nevis, where international banking regulation remains a sensitive and highly scrutinized area. The ruling underscores the importance of clear statutory authority when regulators take enforcement action, particularly where fines, penalties, and restrictions on corporate activity are involved.

The case also highlights the delicate balance between strong regulatory oversight and the rule of law. While the Court acknowledged the importance of cooperation between banking regulators and financial institutions in maintaining a stable financial system, it made clear that regulatory powers must be exercised within the limits set by legislation.

The decision stands as a major legal development for BONI and a significant clarification of the limits of the Banking Regulator’s authority under Nevis’ international banking framework.