Walkers acted as Cayman Islands counsel to Oriente Group Limited (the "Company”) in respect of its successful petition for the appointment of Mr Kenneth Fung of FTI Consulting (Hong Kong) Limited, Mr Andrew Morrison and Mr David Griffin of FTI Consulting (Cayman) Ltd as joint restructuring officers (the "Joint Restructuring Officers") pursuant to Section 91B of the Cayman Islands Companies Act (as amended), being the first petition under the new restructuring officer regime, which came into force on 31 August 2022.

Background
 

The Company is the parent company of a group (the "Group") which operates a leading financial technology platform providing alternative sources of credit to traditional retail banks for the unbanked and underbanked population of Southeast Asia, with more than 8 million registered users. The Group's performance was significantly affected by the impact of the COVID-19 pandemic on the Southeast Asian economy and the platforms' users, which resulted in a substantial increase in non-performing (consumer) loans, as well as other factors impacting the global capital markets and investor community including, but not limited to, US-China tensions, the Russia-Ukraine war and interest rate increases by central banks.

Notwithstanding the Company engaging in discussions with its creditors regarding a proposed restructuring of its financial liabilities (as well as more broadly, the restructuring of certain Group liabilities due to third party lenders) from at least May 2022, on 20 September 2022, upon the expiry of the deadline for payment under two statutory demands dated 29 August 2022, two creditors (the "Objecting Creditors") presented a petition to the Grand Court of the Cayman Islands (the "Grand Court") (which was served on the Company on 27 September 2022) seeking, amongst other things, the winding up of the Company on the grounds that the Company is unable to pay its debts as defined in Section 93(a) of the Companies Act and is therefore insolvent (the "Winding Up Petition").

On 21 October 2022, the Company presented a petition to the Grand Court seeking the appointment of the Joint Restructuring Officers pursuant to Section 91B of the Companies Act on the grounds that the Company: (i) is unable to pay its debts as defined in Section 93(a) of the Companies Act and is therefore insolvent; and (ii) intends to present a compromise or arrangement to its creditors (or classes thereof) pursuant to Section 86 and/or 91I of the Companies Act, the law of a foreign country or by way of consensual restructuring (the "RO Petition").

Immediately before the hearing of the RO Petition, the Company was made aware that, notwithstanding the automatic stay on the commencement or continuation of proceedings upon the presentation of the RO Petition pursuant to Section 91G of the Companies Act (as discussed further below), on 10 November 2022, the Objecting Creditors presented a petition to the High Court of the Hong Kong Special Administrative Region (the "Hong Kong Court") seeking, amongst other things, the winding up of the Company (on substantially similar grounds advanced in the Winding Up Petition) (the "Hong Kong Winding Up Petition").

In Sian Participation Corp. (In Liquidation) –v- Halimeda International Limited BVIHCMAP2021/0017 (“Sian”), the Eastern Caribbean Court of Appeal again had occasion to consider (amongst a number of other things) the interrelationship between an arbitration clause in a loan agreement and the Court’s jurisdiction to appoint liquidators to a company under the Insolvency Act 2003. The judgment, in which the Court of Appeal upheld the Order of Wallbank J appointing liquidators, serves as a useful reminder that a party wishing to invoke an arbitration clause as a basis for a stay of winding up proceedings against it, must act promptly in inviting the Court to refer the dispute to arbitration or risk losing the opportunity.

Background
The creditor, Halimeda International Limited (the “Creditor”) applied for the winding up of Sian Participation Corp. (the “Company”), on the grounds of insolvency. The debt arose under a loan agreement made between the Creditor and the Company on 7th December 2012 (the “Loan Agreement”). The Loan Agreement contained an arbitration clause (the “Arbitration Clause”) which required any dispute arising from the Loan Agreement to be resolved through arbitration. The loan fell due for repayment by 31st December 2018 but the Company did not repay the debt. The Creditor filed its application on 29th September 2020. On 27th November 2020, the Company filed a Notice of Opposition denying that the debt was currently due and payable. That Notice of Opposition was amended on 19th and 23rd March 2021, but, as originally filed, made no reference to the Arbitration Clause or any reference to arbitration. On 30th January 2021, the company filed an application to strike out the winding up application. It was in this application that arbitration was first advanced as an issue. Neither party made a formal request to the Court that it refer the matter to arbitration.