On 24 April 2023, the Court of Appeal of the Eastern Caribbean Supreme Court delivered a further judgment in Sian Participation Corporation (in Liquidation) v Halimeda International Limited [1], providing useful guidance for meeting the threshold requirements for leave to appeal against a decision to uphold a winding up order. That judgment also clarifies further the Court’s approach to staying applications for the appointment of a liquidator where the debt upon which the application was based was the subject of an arbitration agreement.

The application made by Sian Participation Corporation (“Sian”) arose from an order for the appointment of liquidators which was obtained by Halimeda International Limited (“Halimeda”) on the basis that Sian was insolvent in view of its failure to pay a US$226 million debt which was due and owing to Halimeda. At first instance, Sian disputed its insolvency or that the debt was due and owing. During the course of the winding up proceedings, Sian also contended that there was an operative arbitration agreement between the parties which warranted the proceedings being dismissed or stayed. The learned judge found that debt was not disputed on genuine or substantial grounds and that the arbitration issue was raised too late.

Sian’s appeal against the learned judge’s decision was dismissed along with an application to adduce as fresh evidence the outcome of a separate arbitration between Sian and third parties to show that the debt was disputed on genuine and substantial grounds. See our article on that decision here: Too Late To Arbitrate | Appleby (applebyglobal.com).

In this further decision, Sian’s application for leave to appeal to the Privy Council was dismissed.

Sian brought that application on two bases: first, it contended that it was entitled to appeal as of right on the basis that the appeal was a final decision directly or indirectly respecting property valued at £300 or higher; second, that the Court’s departure in Jinpeng Group Limited v Peak Hotels and Resorts Limited [2] from the decision of the English Court of Appeal in Salford Estates (No. 2) Ltd v Altomart Ltd [3] in relation to the proper approach to a disputed debt petition where the underlying dispute was the subject of an arbitration agreement was an issue which raised questions of great general or public importance.

On the first question, there was surprisingly limited authority on the question of whether or not an appeal from a winding up order respected property valued at £300 or higher. The Court held that although a winding up order was a final judgment, Sian had failed to satisfy the value threshold under section 3(1)(a) of the Virgin Islands (Appeals to the Privy Council) Order 1967 (the “1967 Order”). It did not follow that the value threshold was met simply because the winding up order was made as a result of a US$226 million debt or the fact that the intended appeal concerned large sums in general terms. What was pertinent were the matters in dispute: in a winding up case, the Court was not determining liability for the debt, it was merely deciding whether or not the debt was disputed on genuine and substantial grounds. Moreover, in this case, the Court of Appeal had held that the arbitration issue had been raised too late, that being a discretionary question which itself involved no determination as to a right respecting property with a value exceeding the minimum statutory threshold. In the absence of any determination by the judge as to any interest held by Sian in property, it could not be said that the appeal involved directly or indirectly questions respecting property valued at £300 or higher.

On the second issue, Sian sought to argue that the Court of Appeal decision in Jinpeng was contrary to the approach taken by other common law jurisdictions to stay proceedings where there is an arbitration clause, unless exceptional circumstances are shown. However, the Court of Appeal held that:

  1. The difference in approach was “not a fundamental one”. In Jinpeng, the Court of Appeal had recognised that the court has a discretion whether to stay or dismiss a liquidation application in favour of arbitration proceedings. The departure from Salford related only to the general approach as to how that discretion was to be exercised, “and whether there should be a strong presumption in favour of staying or dismissing liquidation applications (as in Salford) or whether this should only be done in exceptional circumstances (as in Jinpeng);”
  2. In refusing to follow English authority, Jinpeng had settled the law in the BVI; and
  3. the mere fact that other jurisdictions, most notably Hong Kong and Singapore, had taken a different approach gave rise to no question of great or general or public importance in the BVI.

The key features of this decision can be distilled as follows:

  1. It is well-settled that winding up orders are final judgments.
  2. The value threshold is not met merely by reference to the value of the debt on which a winding up order is made. The relevant consideration is the matter in dispute.
  3. Even where an appeal lies as of right, the Court retains a residual discretion to refuse leave to appeal where there is no genuine dispute.
  4. The fact that other parties might encounter the same issue from time to time does not make that issue a question of great general or public importance.
  5. Jinpeng is settled law in the BVI.


The decision of the Court of Appeal is to be welcomed:

  • The BVI is a jurisdiction in which over 375,000 active companies exist. On Sian’s case, any insolvent company would have had an appeal as of right, at the expense of its creditors, regardless of whether or not the appeal raised any question of great general or public importance (or, indeed, any merit).
  • The Court of Appeal accepted that it has jurisdiction to refuse leave to appeal to the Privy Council where there is no genuine appeal, even where an appeal would otherwise exist as of right. Although the Court did not specifically rely upon this jurisdiction in dismissing the application, in accepting the existence of this jurisdiction in the BVI for the first time it was following the decisions in Meyer v Barnes [4] and Water and Sewerage Authority of Trinidad and Tobago v Sahadath and another [5].
  • Subject to any further attempt to appeal, the law of the BVI in relation to the relevance of an arbitration agreement on a winding-up application can now be regarded as having been finally settled. As Farara JA put it, the difference is not a fundamental one and goes only to how the Court’s discretion is to be exercised: whether there should be a strong presumption in favour of staying or dismissing liquidation applications (as in Salford) or whether this should only be done in exceptional circumstances (as in Jinpeng).

Andrew Willins and Tamara Cameron of Appleby acted for the successful Respondent, Halimeda International Limited, instructing Paul Lowenstein KC and Rupert Hamilton of Twenty Essex.

[1] BVIHCMAP 2021/0017 (decided 24 April 2023)
[2] BVIHCMAP 2014/0025 and BVIHCMAP 2015/0003 (delivered 8 December 2015)
[3] [2014] EWCA Civ 1575
[4] [2019] UKPC 3
[5] [2022] UKPC 56

Twitter LinkedIn Email Save as PDF
More News