Winding Up vs Arbitration – Stay Of Creditor's Winding Up Proceedings Refused By Privy Council

The inter-relationship between disputed debts, arbitration agreements and winding up proceedings has come up again this time before the Privy Council in Sian Participation Corp (In Liquidation) v Halimeda International Ltd [2024] UKPC 16. In delivering this important judgment, the Privy Council looked closely at the dividing line between two areas of public policy, namely insolvency and arbitration.

Background

The appeal was against the decision of the BVI Commercial Court, as affirmed by the Eastern Caribbean Court of Appeal, to place the appellant into liquidation pursuant to a liquidation application brought by the respondent, Halimeda International Ltd.

Pursuant to a facility agreement, the respondent advanced a term loan of USD 140 million to the appellant. The loan has not been repaid. As of 15 December 2020, the total sum claimed was over USD 226 million.