Rongxinda Development (BVI) Ltd

• Jurisdiction: Caribbean States
• Court: Eastern Caribbean Supreme Court
• Judge: Jack, J
• Judgment Date: 13 April 2022
• Judgment citation (vLex): [2022] ECSC J0413-1
• Year: 2022
• Docket Number: CLAIM No: BVIHC (COM) 2022/0008

EASTERN CARIBBEAN SUPREME COURT

IN THE HIGH COURT OF JUSTICE

(COMMERCIAL DIVISION)

CLAIM No: BVIHC (COM) 2022/0008

In the Matter of Rongxinda Development (BVI) Ltd

And in the Matter of Section 179A of the BVI Business Companies Act 2004 (As Amended)

And in the Matter of a Scheme of Arrangement

Between:

Rongxinda Development (BVI) Ltd

Applicant

Appearances:

Mr. Peter Ferrer, Ms. Marcia McFarlane and Mr. Chai Ridgers of Harneys for the Applicant

JUDGMENT (No 1)

1 Jack, J [Ag]: In this matter, I am asked to make orders in respect of a Scheme of Arrangement under section 179A of the BVI Business Companies Act 2004 1 which is being proposed in respect of Rongxingda Development (BVI) Limited. Section 179A provides so far as material:

“(1) Where a compromise or arrangement is proposed between a company and its creditors or, any class of them, or between the company and its members or any class of them, the Court may, on the application of a person specified in subsection

(2) order a meeting of the creditors or class of creditors or of the members or class of members as the case may be, be summoned in such manner as the Court directs.

(2) An application under subsection (1) may be made by, (a) the company…

(3) If a majority in number representing seventy five percent in value of the creditors or class of creditors or members or class of members as the case may be, present and voting either in person or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement if sanctioned by the Court is binding on all the creditors, or the class of creditors or the members or class of members as the case may be, and also on the company, or in the case of a company in voluntary liquidation, or in liquidation under the Insolvency Act, on the liquidator and on every person liable to contribute to the assets of the company in the event of its liquidation.”

2 I do not need to read the rest of the Section. It can be seen that there is a two-stage process. The first stage is for me to order that there be a meeting. And secondly, if the meeting reaches the necessary seventy-five percent by value of creditors, I then have to consider the question of sanctioning the proposal.

3 As Mr. Ferrer conveniently sets out at para 1.5 of his skeleton argument, there are five matters to be considered when the Court is determining whether a Scheme Meeting should be convened.

• (a) The Court's jurisdiction to make an order that the company be at liberty to convene the meeting, the Scheme Meeting under section 179A and directions for the further conduct of the matter;

• (b) Whether the Scheme has a reasonable prospect of success;

• (c) The classes and scheme creditors proposed by the company;

• (d) The notice of timing and conduct of the Scheme Meeting; and

• (e) the documentation to be approved at the Scheme meeting.

4 The background of this matter is the difficulties (which are well-known) in the real estate market in the People's Republic of China. Rongxingda Development (BVI) Limited is a wholly-owned subsidiary of...