In Sian Participation Corporation (In Liquidation) v Halimeda International Ltd [2024] UKPC 16, the Privy Council considered an appeal from the Court of Appeal of the Eastern Caribbean Supreme Court (BVI) as to whether a company should be wound up where the debt on which the winding up application is based is subject to an arbitration agreement and is said to be disputed and/or subject to a cross-claim.

Introduction

"The law on 'knowing receipt' has perplexed judges and academics alike for several decades" – Lord Burrows (paragraph 99).

They say every man needs protection, they say that every man must fall.¹

The collapse of UK retailer British Home Stores ("BHS") in 2016 remains one of the most high-profile corporate insolvencies of recent times. It went from being a household name across the UK, with over 11,000 employees, to having reported debts of £1.3 billion, including a pension deficit of nearly £600 million. The group's demise saw the closure of some 164 stores nationwide and significant job losses.

Seven years after the British Home Stores Group Limited, a well known high street retailer, and its operating subsidiaries entered liquidation, the High Court has found two former directors liable for wrongful trading and misfeasance.

Background

Harrington v. Purdue Pharma L.P., No. 23-124

Today, the Supreme Court held 5-4 that the Bankruptcy Code does not allow a bankruptcy court to discharge claims against a non-debtor without the consent of affected claimants.

在 Sian Participation v. Halimeda International [2024] UKPC 16一案中，布里格斯勋爵（Lord Briggs）和夏宝伦勋爵（Lord Hamblen）代表委员会作出判决，认可了关于清盘呈请的传统做法。两位法官确认，即使产生债务的合同包含仲裁条款，亦不能削弱债务人证明债务确实存在实质性争议的责任（下称“可审理问题标准”）。

该案中，委员会的观点与香港高等法院暂委法官王鸣峰资深大律师（William Wong SC）在 Dayang v. Asia Master Logistics [2020] 2 HKLRD 423 一案中的观点（见判词第82、98段）如出一辙，可归纳如下：

The High Court has found that a borrower's debenture granted to a lender in respect of certain internet protocol (IP) addresses was a floating charge.

In Sian Participation v. Halimeda International [2024] UKPC 16, Lords Briggs and Hamblen, delivering judgment on behalf of the Board, endorsed the traditional approach to winding-up petitions. Their Lordships confirmed that a debtor’s duty to show that the debt is genuinely disputed on substantial grounds (“Triable Issue Standard”) remains undiluted even if the contract from which the debt arose contains an arbitration clause.