The Court of Appeal’s Judgment comes as the most recent development in a long running dispute in relation to investments of approximately US$500m which Mr Wang made in four investment funds structured and promoted by the London based financial advisor ‘Floreat’. The Judgment considers:

  • Whether a beneficial owner of shares is entitled to maintain winding up proceedings;
  • Whether a beneficial owner of shares, that holds an instrument of transfer executed otherwise than in accordance with the Company’s Articles, is a member for the purposes of the Insolvency Act 2003;
  • Whether a second application for the grant of interim relief, where the earlier application failed on full and frank disclosure grounds, is an abuse of the process of the Court; and
  • Whether foreign judgments (and liquidators reports) are admissible in evidence in interlocutory proceedings.


The background to the proceedings is that Mr Wang had issued an application seeking the appointment of liquidators and provisional liquidators in three funds incorporated in the Cayman Islands, and one in the British Virgin Islands.  He alleged serious impropriety by constituent parts of the Floreat Group, various of its management, and its principals Hussam Otaibi, Mutaz Otaibi and James Wilcox (the Floreat Principals), (all of them together, Floreat Parties) in relation to their conduct of the affairs of the funds.

Real Assets (RA) Global Opportunity Fund I limited (the Fund) was the fund incorporated in the BVI.  Mr Wang was the beneficial owner of 97.2% of the participating shares issued by that Fund, but he was not (at least at the time that the application for the appointment of liquidators was issued) a registered shareholder of the Fund.  The voting shares were held by Floreat Real Estate Limited (FRE), a part of the Floreat Group.  Mr Wang had made attempts to have certain of the shares held on his behalf by his nominees transferred to him, but (as the Court held) the “supposedly independent directors” of the Fund repeatedly obstructed the transfer of certain of those shares into Mr Wang’s name.

The Standing of Beneficial Owners

The Court’s judgment extends to some 130 pages.  The judgment, prepared by Farara JA:

  • confirms that a beneficial owner of shares can (in appropriate circumstances) take proceedings to protect his interests in a company in which he is ultimately a shareholder, notwithstanding the fact that he is not a registered shareholder of the company.  Applying the equitable principles which have been developed in England and confirmed by the English Court of Appeal in Eclairs Group v. JKX Oil & Gas [2014] EWCA Civ 640 and by the Supreme Court in Roberts (FC) v. Gill [2010] UKSC 22, the Court held that a beneficiary can take proceedings to protect trust property, where special circumstances exist.  The Court also rejected an argument that Section 184C of the BVI Business Companies Act 2004 (requiring the permission of the Court to bring a derivative claim) is applicable to such a claim.  This decision therefore represents the approval of an earlier, first instance, decision of Malcolm Davis-White J in Tipp Investments PCC v. Chagala Group BVIHCM 2016/0102.
  • considers whether the extended definition of “member” in the Insolvency Act 2003, which extends to unregistered shareholders that hold an executed but unregistered Instrument of Transfer, is applicable in cases where certain steps prescribed by the Articles of Association relating to the transfer of the shares have not been carried out.  The Court of Appeal held that since the Articles in this case required the consent of the directors to the transfer of shares, Mr. Wang did not fall within the extended definition of shareholder even though the directors had sought to obstruct the transfer by withholding their consent.  Instead, that was a special circumstance entitling the Court to permit the application to proceed on a derivative trusts basis.

Other Topical Issues

The Judgment also resolves, for the first time at an appellate level, two further issues which have arisen in recent first instance authorities:

  • Whether it is necessarily an abuse of the process of the Court for a litigant to bring a second application for interim relief, where an earlier application had failed on grounds relating to non-disclosure.  This is an issue which had arisen before Mangatal J in another recent case, AO Alfa Bank v. Kipford BVIHCM 2022/0007, also a case where issues of non-disclosure arose on the first application.

Applying the decision of the English Court of Appeal in Koza Ltd. & Hamdi Akin Ipek v. Koza Altin Isletmeleri AS [2020] EWCA Civ 1018, the Court of Appeal held that it is not necessarily an abuse of the process of the Court to bring a second application, where (1) there has been a material change in circumstances as well as (2) new evidence relating to the need to protect the assets of the Fund from those controlling it.

  • Whether the reports of Liquidators, and the decisions of foreign Courts, are inadmissible in evidence under the rule in Hollington v. Hewthorn [1943] 1 KB 587.  The Court of Appeal noted that this was the first time the issue had arisen for consideration at an appellate level, but that the authorities had moved on such that evidence of that type is now admissible on an interlocutory application because “in most interlocutory proceedings, the court is not called upon to make final decisions but to determine whether there is a serious issue…”.

In the context of FRE’s attempt to exclude the findings of Kawaley J in related proceedings in the Grand Court of the Cayman Islands, this was an important conclusion.  In those proceedings, Floreat Parties had abandoned their defence of winding up proceedings, part way through a six-week trial, with Kawaley J observing that the relevant Floreat Parties “did not have the temerity to permit the Court to examine more fully” and that it was “manifestly appropriate” for the Cayman funds to be wound up – at the very least to enable their affairs to be investigated.

Accordingly, the Court has, once again, shown that it will act swiftly to protect the shareholders of BVI companies, or (in appropriate cases) their beneficial owners, in cases where the assets of a Company are at risk.

Andrew Willins and Tamara Cameron of Appleby acted on behalf of the successful Respondent, Chia Hsing Wang, instructing James Collins KC and Benedict Tompkins of Essex Court Chambers.  David Lee and David Lewis-Hall of Appleby acted on behalf of Mr Wang in the Cayman Islands.  David Mumford KC appeared in an earlier appeal, and Stephen Rubin KC appeared with James Collins KC in the Cayman proceedings.

Key Contacts

Andrew Willins

Partner: BVI

T +1 284 393 5323
E Email Andrew

Tamara Cameron

Counsel: BVI

T +1 284 393 5344
E Email Tamara

David Lee

Partner: Cayman Islands

T +1 345 814 2083
E Email David

David Lewis-Hall

Consultant: Cayman Islands

T +1 (345) 814 2047
E Email David

Daniel Mitchell

Partner: BVI

T +1 284 393 5306
E Email Daniel

Gráinne Hussey

Associate: BVI

T +1 284 393 5322
E Email Gráinne

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