It has become increasingly common for shareholders to agree
that disputes concerning the ownership or management of a company
should be referred to arbitration. This often means that the courts
in the jurisdiction of a company's incorporation have a limited
role in overseeing corporate governance matters. However, the
winding up of offshore companies is generally the preserve of their
home courts, and this can often provide an important safeguard for
investors in companies that are being mismanaged or used for
nefarious purposes when the contractually agreed dispute provisions
are failing to offer protection.
Arbitration clauses and mandatory stays of court
proceedings
Where arbitration clauses are used, they tend to leave no
alternative method of resolving disputes. Article 8 of the United
Nations Commission on International Trade Law
(UNCITRAL) Model Law, which is given
effect in the British Virgin Islands and Cayman Islands arbitration
legislation, has the
