ICM SPC v Jarvis and Johnston [2025] CIGC (FSD)
6th March 2025
The Hon. Justice David Doyle gave judgment in ICM SPC v Jarvis and Johnston [2025] CIGC (FSD) 17 on 26 February 2025. A copy of the transcript, which became available on 4 March 2025, can be found here. The Applicant company’s application to restrain presentation of a winding-up petition against it was dismissed. David Chivers KC appeared for the successful respondents, with assistance from Samuel Parsons. Instructed by Ben Hobden, Luke Fraser and Jeremy Child of Harneys (Cayman) LLP.
The segregated portfolio company (‘SPC’) brought its originating summons in the Financial Services Division of the Cayman Islands Grand Court. This litigation followed two earlier key events.
First, the liquidators of Phoenix Commodities Pvt Ltd (a BVI company (‘Phoenix’)) had included the SPC in its list of members in December 2021, which was drawn up in accordance with the BVI Insolvency Act and Rules. The list recorded that the SPC had been issued with 440,935 shares, at the price of $90.72 per share, and that no payment had been received for those shares. The SPC was therefore – according to that list – liable to contribute to Phoenix’s assets in the amount of around £40m; a ‘contributory’ in the fullest sense. The liquidators duly made a call on the SPC.
The SPC applied to the BVI High Court to remove itself from the list of Phoenix’s members. That originating application was dismissed on 30 May 2024, following trial before Mangatal J in September 2023.
The central question for the Cayman Court was whether the liquidators of Phoenix were entitled to present a winding-up petition on the basis of the list of members, the call, and the subsequent statutory demand.
The SPC objected, primarily on the basis that section 205 of the BVI Insolvency Act 2005 required a so-called ‘balance order’ to be obtained before it could be liable, and that it had been deprived of a right to object to such an order being made.
The Cayman Court rejected that argument. It held that:
- A debt was owed by a member on the list and became due when called.
- The absence of any equivalent to section 80 of the UK Insolvency Act 1986 was irrelevant.
- The availability of the balance order mechanism in the BVI was irrelevant to the Cayman proceedings (it being another possible route, in a different jurisdiction).
The SPC’s application was consequently dismissed, thereby enabling the liquidators of Phoenix to present a winding-up petition for the call sum.
