Arbitration And Winding Up: Diverging Approaches

Winding up is "[a] type of external administration (also referred to as liquidation) in which a liquidator is appointed to a company to take control of the company and its property, and wind up its affairs in an orderly way for the benefit of creditors".¹ This process can be initiated voluntarily by a company's shareholders or partners as a way to avoid bankruptcy, or it can be compulsory via a court order directing the company to appoint a liquidator.⁴ Compulsory winding up is often triggered by suits brought by the company's creditors or at the conclusion of bankruptcy proceedings.⁵

Once the winding-up process has begun, the company ceases to conduct business as usual, its assets are seized and sold, and the proceeds are used to pay off its debts and liabilities.² Upon the completion of winding up, the company is dissolved and ceases to exist.³