Nov 2012
BRITISH VIRGIN ISLANDS
HIGH COURT (COMMERCIAL DIVISION)
STATUTORY DEMAND BASED ON LCIA ARBITRATION AWARD – WHETHER AWARD CREATING AN ENFORCEABLE DEBT – WHETHER UNDERLYING DEBT DISPUTED – S. 10 INSOLVENCY ACT, 2003 (THE “ACT”) – WHETHER DEMAND TO BE SET ASIDE
Vendort Traders Inc (“Vendort”) applied in the Commercial Court to set aside a statutory demand served on it by Evrostroy Grupp LLC (“Evrostroy”) on the ground that it was unenforceable. The statutory demand was for a debt in the sum of RUR38 million (together with GB£36,000 and US$3,474 by way of interest and costs of the arbitration) pursuant to a final award made in an LCIA arbitration. Vendort sought to argue that the fact that the award was not made enforceable as a judgment under Section 28 of the Arbitration Ordinance (the “Ordinance”) rendered it unenforceable. As such, pursuant to Section 10(3) of the Act unenforceable debts are excluded from the definition of liability and, therefore, could not be a debt for the purpose of a statutory demand or a claim in the liquidation of the company.