Vol 22 (2025) - Issue 1

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The Interplay between Insolvency and Arbitration and Contrasting Approaches Pre- and Post-Sian Participation

Synopsis
The landmark decision by the Privy Council in Sian Participation Corp v Halimeda International Ltd ('Sian'), handed down in June 2024, is of significance for in solvency and arbitration practitioners alike because, amongst other matters:
It confirms that a winding-up petition should not be stayed or dismissed merely because the underlying debt is subject to a broadly worded arbitration agreement, thereby endorsing the approach adopted by the courts in the British Virgin Islands ('BVI'). The debt must be disputed on genuine and substantial grounds, which contrasts with the position reached by the English Court of Appeal in Salford Estates (No. 2) Ltd v Altomart Ltd (No. 2) ('Salford Estates 2').
It marks the first instance of the Privy Council (as the BVI's highest appeal court) using its powers under Willers v Joyce (No. 2)3 to declare a previously leading English authority (Salford Estates 2) as having been wrongly decided.
This article explores the evolution of judicial approaches to the interplay between arbitration clauses and winding up proceedings in England and Wales, the BVI and Hong Kong, both before and after Sian.