Court Grants Mandatory Arbitration Stay In Winding Up Proceedings

In the recent case of In the matter of China CVS (Cayman Islands) Holding Corp., Kawaley J of the Grand Court of the Cayman Islands (the "Court") provided some helpful clarity in determining the question of when the mandatory arbitration stay under Section 4 of the Foreign Arbitral Awards Enforcement Law (1997 Revision) ("FAAEL") would apply in the context of winding up proceedings.

Background

In October 2018, Family Mart China Holding Co., Ltd, a Japanese company (the "Petitioner"), petitioned to wind up China CVS (Cayman Islands) Holding Corp. (the "Company") on the just and equitable ground under Section 92(e) of the Cayman Islands Companies Law (2018 Revision) (the "Companies Law"). In the alternative, the Petitioner sought an order requiring Ting Chuan (Cayman Islands) Holding Corporation ("Ting Chuan") to sell its shares in the Company to the Petitioner pursuant to Section 95(3) of the Companies Law. Ting Chuan responded in November 2018 seeking orders,