Where Arbitration And Provisional Liquidation Co-Exist: Cayman Islands Court Appoints Provisional Liquidators Notwithstanding Arbitration Stay

Key Points

• In two related decisions in Peakwave Investment Management Limited v Energy Evolution GP Limited¹, the Cayman Islands Grand Court (the court) considered the appointment and powers of provisional liquidators (PLs) in circumstances where a winding-up petition has been stayed in favour of arbitration.
• The court held that it retains jurisdiction to appoint PLs notwithstanding an arbitration stay, but that whether it would exercise its discretion to make such an appointment depends on the facts. Further the court held that, as a matter of Cayman Islands law the appointment of PLs does not automatically displace the management powers of a company’s directors.
• Together, the two decisions provide important guidance for practitioners navigating the intersection of winding-up proceedings and arbitration in the Cayman Islands.