Stay A While: The Interplay Between Winding-Up Proceedings And The Mandatory Stay Provisions Under The BVI Arbitration Act

Kenworth Industrial v Xin Gang Power InvestmentsBVIHCOM 2023/0006

The recent decision of the BVI Commercial Court (the "Court") (the Hon. Justice Ingrid Mangatal (Ag.)) in Kenworth Industrial Limited v Xin Gang Power Investments Limited BVIHCOM 2023/0006 has provided clarity on the interplay between the pro-arbitration provisions of the BVI Arbitration Act, 2013 (the "Arbitration Act"), and the exclusive jurisdiction of the Court to wind up a company on the just and equitable ground under section 162(1)(b) of the Insolvency Act, 2003 (the "Insolvency Act").

The key issue considered by the Court was whether proceedings by a member seeking the appointment of liquidators to Xin Gang Power Investments Limited (the "Company") on the just and equitable ground should be stayed in favour of arbitration in accordance with an arbitration agreement (the "Arbitration Agreement") contained in the Company's articles of association.