Sian Participation Corporation ((in Liquidation)) v Halimeda International Ltd

• Jurisdiction: British Virgin Islands
• Judge: Farara JA
• Judgment Date: 24 April 2023
• Judgment citation (vLex): [2023] ECSC J0424-2
• Docket Number: BVIHCMAP2021/0017
• Court: Court of Appeal (British Virgin Islands)

Between:

Sian Participation Corp (In Liquidation)

Appellant/Applicant

and

Halimeda International Limited

Respondent

Before:

The Hon. Mr. Mario Michel Justice of Appeal

The Hon. Mde. Margaret Price-Findlay Justice of Appeal

The Hon. Mr. Gerard St. C Farara Justice of Appeal [Ag.]

BVIHCMAP2021/0017

THE EASTERN CARIBBEAN SUPREME COURT

IN THE COURT OF APPEAL

Leave to appeal to His Majesty in Council — Section 3(1)(a) of the Virgin Islands (Appeals to the Privy Council) Order 1967 — Whether intended appeal lies of right — Whether the decision of the learned judge to appoint liquidators over Sian was a final decision — Whether the appeal involves directly or indirectly a claim to or question respecting property or a right valued at £300 or more — Whether the appeal concerns the liquidation of a company in respect of an alleged debt in excess of US$226 million

In September 2020, the respondent, Halimeda International Limited (“Halimeda”) filed an application pursuant to sections 159(1)(a) and 162(1)(a) of the Insolvency Act 2003, to appoint liquidators over Sian Participation Corp (“Sian”), a company incorporated under the Laws of the Territory of the Virgin Islands (“the BVI”), in respect of an alleged debt of approximately US$226,000,000. Halimeda's application was on the ground that Sian was unable to pay its debts as they fell due and was therefore insolvent. Sian resisted that application on several bases including inter alia that it was not insolvent, the debt was not due and owing and that the existence of an arbitration clause in a loan agreement between Sian and Halimeda meant that, in the absence of exceptional circumstances, the liquidation application should be dismissed or stayed as a matter of course in favour of arbitration proceedings (the “Arbitration Issue”).

In May 2021, the learned judge held that the loan in the sum of US$226,000,000 was due and owing and that Sian had failed to show that the debt was disputed on genuine and substantial grounds or that there were other reasons why the liquidation application ought to be dismissed or stayed. In doing so the judge found that the Arbitration Issue had been raised to late by Sian. Consequently, the learned judge granted Halimeda's application and made an order appointing liquidators over Sian. The judge also refused to admit Sian's further evidence in the form a witness statement, an affidavit and their accompanying exhibits.

Sian appealed to the Court of Appeal on several grounds against the learned judge's decision. Sian also filed two applications to adduce additional evidence in the appeal. The Court of Appeal, in its judgment delivered on 11 ^th November 2022, upheld the decision made by the learned judge in the court below and refused Sian's applications to adduce fresh evidence on appeal. Sian now seeks leave to appeal to His Majesty in Council against the decision of the Court of Appeal, on the bases that: (i) the intended appeal lies as of right within the meaning of section 3(1)(a) of the Virgin Islands (Appeals to the Privy Council) Order 1967 (“the 1967 Order”) as the matter in dispute is of the value of 300 pounds sterling or upwards or involves directly or indirectly a claim to or question respecting property or a right of the value of 300 pounds sterling or upwards; (ii) the intended appeal is from a decision in civil proceedings which raises questions of great general or public importance or otherwise ought to be submitted to His Majesty in Council within the meaning of section 3(2)(a) of the 1967 Order; and (iii) leave ought to be granted to appeal pursuant to section 3(2)(a) of the 1967 Order against the Court of Appeal decision refusing to admit certain documents as fresh evidence in the appeal.

Held: dismissing the application for conditional leave to appeal to the Privy Council and awarding costs of the application to the respondent to be assessed by a judge of the court below if not agreed within 21 days, that:

• 1. It is well-settled that winding-up orders are considered final judgments in civil proceedings which can be appealed as of right. While the intended appeal to His Majesty in Council emanates from a winding-up order and as such, is a final decision of the court below, this alone does not satisfy all the requirements of section 3(1)(a) of the 1967 Order relating to an appeal as of right. The requirements that (i) the matter in dispute on the intended appeal to His Majesty in Council be of the value of £300 sterling or upwards, and/or (ii) the appeal involves, directly or indirectly, a claim to or a question respecting property or a right of the value of £300 sterling or upwards, must also be satisfied.

  Inderjit Kaur Chhina v Muhammad Nazir Muhammad Ismail et al BVIHCMAP2020/0024 (delivered 23rd March 2023, unreported) followed; Walter Fletcher v Income Tax Commissioner [1972] AC 414 applied; Alceo Zuliani and others v Vernon S. Viera [1994] 1 WLR 1149 followed; Meghji Lakhamshi & Bros. v Furniture Workshop [1954] AC 80 applied.

• 2. In this case, neither of these requirements have been satisfied by Sian. It is not enough that the dispute relates in some way to property or a right that is worth more than the threshold amount. The fact that the winding-up was ordered because of an unpaid debt of US$226 million does not mean that the value threshold test is met. It is the value of the dispute itself that must meet the threshold amount. In the court below, the learned judge determined that the debt was not disputed on genuine and substantial grounds. Further, in relation to the Arbitration Issue, the learned judge found that it had been raised too late. These decisions of the learned judge were upheld by the Court of Appeal in the substantive appeal. Moreover, as this Court found in the appeal that the judge in the court below did not make any determination concerning Sian's interest in any property, the intended appeal cannot involve directly or indirectly a claim to or question respecting property of the value of £300.

• 3. The Court has the power to refuse leave to appeal to His Majesty in Council where there is no genuine dispute, even where, in the circumstances, the applicant is entitled to leave to appeal as of right. In this case, while the Arbitration Issue does raise a question of law, that question is not one of great general or public importance or which otherwise which ought to be submitted to His Majesty pursuant to section 3(2)(a) of the 1967 Order. It is not sufficient to satisfy the requirement of that sub-section that this issue will or may be encountered by other parties from time to time. Further, the issue of law has been settled in the BVI in the decision of this Court dated 8 ^th December 2015 in Jinpeng Group Limited v Peak Hotels and Resorts limited and does not require resolution, and Sian's complaint that the case of Jinpeng Group Limited took a different approach to that taken by the English Court of Appeal in Salford Estates (No. 2) Ltd does not make the Arbitration Issue one of “great general or public importance” or which otherwise requires the attention or determination of the Privy Council..

  Meyer v Baynes [2019] UKPC 3 followed; Water and Sewerage Authority of Trinidad and Tobago v Sahadath and another [2022] UKPC 56 applied; Jinpeng Group Limited v Peak Hotels and Resorts Limited BVIHCMAP2014/0025 and BVIHCMAP2015/0003 (delivered 8th December 2015, unreported) considered; Salford Estates (No. 2) Ltd v Altomart Ltd [2014] EWCA Civ 1575 considered; Renaissance Ventures Ltd et al v Comodo Holdings Ltd. BVIHCMAP2018/0005 and BVIHCMAP2018/0008 (delivered 8th October 2018, unreported) followed; Inderjit Kaur Chhina v Muhammad Nazir Muhammad Ismail et al BVIHCMAP2020/0024 (delivered 23rd March 2023, unreported) followed.

• 4. Sian has not shown how the rejection of the fresh evidence application can properly be placed before the Board. Without sight of the arbitration award, the Court is not in a position to determine whether its contents would have an important bearing on the outcome of this appeal. Consequently, this Court is not in a position to find that there are issues of great general or public importance or any point of law on which the Court could benefit from the guidance by the Board.

Appearances:

Mr. Tom Smith, KC with him Mr. Paul Fradley, Mr. André McKenzie and Ms. Jhneil Stewart for the Appellant/Applicant

Mr. Paul Lowenstein, KC with him Mr. Rupert Hamilton, Mr. Andrew Willins and Ms. Tamara Cameron for the Respondent

1 Farara JA [AG.]: The appellant/applicant, Sian Participation Corp (“Sian”) seeks leave to appeal to His Majesty in Council against the decision of the Court of Appeal delivered on 11 ^th November 2022, dismissing the appeal, affirming the decision of the learned judge and awarding costs of the appeal to Halimeda International Limited (“Halimeda”), to be assessed by the court below if not agreed within 21 days. Sian contends that this is a suitable case for this Court to grant leave to appeal to the Judicial Committee of the Privy Council in all the circumstances and on the following grounds:

• (i) an appeal lies as of right within the meaning of section 3(1)(a) of the Virgin Islands (Appeals to the Privy Council) Order 1967 1 (“ the 1967 Order”) against the Winding-Up Order (defined below) as it is a final decision in civil proceedings and concerns a matter in dispute in the intended appeal to His Majesty in Council of the value of £300 sterling or upwards and/or a question respecting property or a right of the value of £300 sterling or upwards, in particular, the intended appeal concerns

  the liquidation of a company in respect of an alleged debt in excess of US$226,000,000.

• (ii) this is an appropriate case for the Court of Appeal to grant leave to appeal to His Majesty in Council pursuant to section 3(2)(a) of the 1967 Order because the intended appeal is from a decision in civil proceedings...