[2024] UKPC 16
On appeal from the Court of Appeal of the Eastern Caribbean
Supreme Court (British Virgin Islands)
Justices: Lord Reed (President), Lord Lloyd-Jones, Lord Briggs, Lord
Hamblen, Lord Burrows
Background to the Appeal
This appeal concerns the test to be applied by courts in the British Virgin Islands (the “BVI”)
when exercising their discretion to dismiss or stay insolvency proceedings in circumstances
where the parties have agreed to resolve their disputes by arbitration.
In December 2012, the respondent advanced a loan of USD 140m to the appellant (the
“Loan”). The agreement governing the Loan (the “Facility Agreement”) included a clause
providing that “any claim, dispute or difference of whatever nature arising under, out of or in
connection with” the Facility Agreement would be referred to arbitration (the “Arbitration
Agreement”).
The Loan has not been repaid. In February 2020, the respondent sent a letter to the appellant
demanding payment of the debt under the Facility Agreement (the “Debt”). As at 15
December 2020, the total sum claimed was approximately USD 226m. The appellant disputes
that the Debt is due and payable on the basis of a cross-claim and/or set-off.
In September 2020, the respondent applied to have liquidators appointed in respect of the
appellant pursuant to sections 159(1)(a) and 162(1)(a) of the BVI Insolvency Act 2003.
Following a hearing of the application, Mr Justice Wallbank (the “Judge”) delivered an oral
judgment in May 2021 holding, among other things, that the appellant had failed to show that
the Debt was disputed on genuine and substantial grounds. The Judge ordered the appellant to
be put into liquidation.