Vol 13 (2016) - Issue 2

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Enforcement of Arbitration Award in Cayman: MNC Media Investment Limited v Ang Choon Beng

The Cayman Islands has once again proved itself to be a favourable jurisdiction for those trying to enforce arbitration awards under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards ('the NY Convention'), following a decision by the Court of Appeal in the matter of MNC Media Investment Limited v Ang Choon Beng. Paul Smith and Ben Hobden of Conyers Dill & Pearman acted on behalf of the successful Respondent.
The Appellant, MNC Media Investment Limited ('MNC'), was a holding company incorporated in the Cayman Islands that owns an electronic media products business carried on in the Peoples’ Republic of China through a number of variable interest entities.
By a Put and Call option, made between the Respondent, Mr. Ang Choon Beng ('Mr. Ang') and the Appellant and two other non-Cayman Islands parties (cumulatively referred to as the 'Linktone Parties', Linktone being the former name of MNC), Mr. Ang agreed to grant the Linktone Parties a call option to purchase certain shares and the Linktone Parties granted Mr. Ang a put option to require the Linktone Parties to re-purchase the same shares.
Mr. Ang sought to exercise his put option requiring the Linktone Parties to re-purchase the shares to no avail, and subsequently commenced arbitration proceedings against the Linktone Parties in the Singapore International Arbitration Centre ('SIAC'). The SIAC Tribunal found in favour of Mr. Ang and in its partial award directed that Mr. Ang and the Linktone Parties complete the sale and purchase of the shares under the put option. The partial award did not make any provision for interest or costs, but gave Mr. Ang liberty to apply to the SIAC Tribunal should the need arise.
The Linktone Parties failed to comply with the partial award, so Mr. Ang made an application to the SIAC Tribunal for a consequential order for the procedure for the completion of the sale and purchase of the shares and sought an order for payment of costs and interest. Mr. Ang succeeded with these applications, the SIAC Tribunal making a final award in this regard.
Mr. Ang then set about enforcing the final award in the Cayman Islands. The matter first found itself before the Grand Court in November 2014 when Mr. Ang sought an order pursuant to section 5 of the Foreign Arbitral Awards Enforcement Law (1997) Revision (the 'Law') for leave to enforce the final award of the SIAC Tribunal against MNC. The NY Convention applies to the Cayman Islands, and accordingly the procedure under the Law for enforcing NY Convention awards is one which is very straightforward and enforcement friendly. Following a brief ex parte application Mr. Ang was granted leave to enforce the final award.
Mr. Ang next presented a statutory demand against MNC (the 'Statutory Demand') under section 93 of the Companies Law, threatening to wind up MNC if the interest and costs awarded to him was not paid. The effect of section 93 of the Companies Law is that MNC would be deemed to be insolvent if the demand, for an undisputed debt, was not paid within 21 days.
MNC made an application to set aside the Statutory Demand on the basis that there was a genuine dispute as to whether the interest and costs were payable. It was argued by MNC that payment of interest and costs was not a joint and several obligation upon all of the Linktone Parties, but an obligation that was inextricably linked to the completion of the sale and purchase of the shares which was not activated until such time that the Linktone Parties elected one of themselves to be the payor and that the final award of the SIAC Tribunal should be construed accordingly. In the alternate, MNC contended that the final award was void for uncertainty and that the Statutory Demand should be set aside on that basis.
On the contrary, Counsel for Mr. Ang argued that the final award was plain and clear in its terms; there was a free standing joint and several obligation upon all of the Linktone Parties to make payment of the costs and interest ordered under the final award. It was argued that to place any other construction on the final award would be to defeat its purpose.