Vol 21 (2024) - Issue 3

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This Is Not a Wind Up: Viewing a Stay to Restrain Presentation of an Application to Appoint Liquidators through the Prism of an Injunction

Synopsis
Creditors of companies in the BVI will often begin the process of recovering their debt by serving a statutory demand. In many such cases, companies so served will invoke the statutory mechanism to have the demand set aside1 afforded to them by the BVI Insolvency Act, 2003 (the 'Act'). If the application to set aside is dismissed, and the BVI Court makes the order which the Act requires, authorising the creditor to proceed with an application to appoint liquidators to a company (an 'Authorisation Order'), the debtor may then seek to stave off winding up proceedings further by seeking a stay of the Authorisation Order pending appeal (a 'Stay Application').
A recent decision of the BVI Commercial Court (the 'Court') (the Hon. Justice Ingrid Mangatal (Ag.)) in Rich Region Holdings Limited v Industrial and Commercial Bank of China (Macau) Limited BVIHC (COM) 0134 of 2022 ('Rich Region') has provided welcome clarity on the approach that the Court will adopt in determining whether to grant a stay to restrain the presentation of an application to appoint liquidators in such circumstances.