Lung Ming Mining Co Ltd - Transcript of Oral Ruling on Preliminary Issue

¶ CICA (Civil) Appeal 18 of 2020 - Lung Ming Mining Co Ltd. - Transcript of Oral Ruling on Preliminary Issue
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IN THE COURT OF APPEAL OF THE CAYMAN ISLANDS
ON APPEAL FROM THE GRAND COURT OF THE CAYMAN ISLANDS
FINANCIAL SERVICES DIVISION
CICA (Civil) Appeal No 18 of 2020
(Formerly FSD 127 of 2019 (CRJ))
IN THE MATTER OF LUNG MING MINING CO. LTD
BETWEEN:
Mr. Xiaoming Li
Appellant
AND
Mr. Kris Beighton and Mr. Patrick Cowley
(in their capacity as former Joint Official Liquidators of the Dissolved Company)
Respondents
BEFORE:
The Rt. Hon Sir John Goldring, President
The Rt. Hon Sir Bernard Rix, Justice of Appeal
The Hon John Martin, Justice of the Peace
Appearances:
Mr. Tom Lowe QC instructed by Mr. Ian Lambert of HSM
Chambers for the Appellant.
Conyers, Attorneys for the Respondents, not present.
Heard:
10 November 2020
Oral Ruling delivered:
10 November 2020
Written transcript delivered: 16 April 2021
PRELIMINARY RULING
The Rt. Hon Sir Bernard Rix, Justice of Appeal
1.
This is a hearing on a preliminary issue in an appeal pursuant to an Order of this court made on
7 October 2020.

¶ 2.
The preliminary issue is one as to the jurisdiction of this court. Is an appeal available in terms
of the Court of Appeal Law (2011 Revision)?

¶ CICA (Civil) Appeal 18 of 2020 - Lung Ming Mining Co Ltd. - Transcript of Oral Ruling on Preliminary Issue
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3.
The background can be taken from some essential paragraphs of the judgment of the
Honourable Justice Cheryll Richards QC below, as follows.
4.
By a summons filed on 18 November 2019, Messrs Patrick Cowley and Kris Beighton, the
Joint Official Liquidators (the “JOLS”) of Lung Ming Mining Co. Ltd (“the Company”),
applied for its dissolution pursuant to section 152(1) Companies Law (2018 Revision), and
Order 22 of the Companies Winding Up Rules 2018 (“CWR”) (the “Application”).
5.
The Application, which was made on the basis that the affairs of the Company had been
completely wound up, was opposed by Mr. Xiaoming Li (“Mr. Li”). Mr. Li was a controlling
shareholder and a former director of the Company. It is asserted on his behalf in summary, that
the Company is the owner of an asset which has significant value and that the JOLs have not
properly enquired into or taken account of this asset.
6.
The Company was incorporated in the Cayman Islands as an exempted limited liability
company on 6 May 2018. It acted as a holding company with primary business operations in
Mongolia and the People’s Republic of China (“PRC”). These operations involved the
production of iron ore and the operation of the Mongolia Rogol Iron Ore Mines.
7.
Following an investigation of the issue raised by Mr. Li as to an outstanding valuable asset of
the Company, the Judge concluded, on balance, that the JOLs were correct in their assessment
that no value can practically or realistically be ascribed to this asset. Put another way, from all
the evidence that the Judge had seen, there appeared to be no real prospect of realisation of
some value. The Judge therefore, for the reasons contained in the Judgment, considering all the
evidential material before the court, and accepting the submissions of the JOLs, was satisfied
that the affairs of the Company had been completely wound up. An order was therefore made
pursuant to section 152 (1) of the Companies Law.
8.
Section 152(1) simply says:
“When the affairs of the company have been completely wound up the Court
shall make an order that the company be dissolved from the date of that order
or such other date that the Court thinks fit, and the company shall be dissolved
accordingly.”
9.
On this appeal the point has been made in writing, both in correspondence, and in a written
skeleton argument on behalf of the JOLs, or as they would prefer to be called at this point, the

¶ CICA (Civil) Appeal 18 of 2020 - Lung Ming Mining Co Ltd. - Transcript of Oral Ruling on Preliminary Issue
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‘former JOLs’, that this court has no jurisdiction following the dissolution of the Company to
entertain this appeal.
10.
The JOLs (as I will for the sake of brevity continue to describe them), rely for these purposes
on some jurisprudence in these Islands, namely Schramm and Hiscox Syndicate 33 v Financial
Secretary, heard by the Chief Justice 2004 05 CILR 39, and affirmed on appeal by this Court
as reported in 2004/05 CILR 104 – that case standing for the proposition that a company
dissolved under section 146, following the striking off of the Register by the Registrar at the
conclusion of a voluntary liquidation, could not be brought back onto the Register pursuant to
the provisions of section 178. The point made in the Schramm case is that there are no
provisions, as there have been for the last century or so in the UK, to allow for the restoration
of a company following its dissolution in such a way.
11.
However that jurisprudence which in itself followed 19th century jurisprudence in the UK in
cases such as In re: Pinto Silver Mining Company (1878) 8 Ch Div 273 did not concern a
question of appeal, but of an un-appealed dissolution of a company.
12.
In the present case we are concerned with the question of an appeal against a dissolution
pursuant to section 152(1). The question of jurisdiction for such an appeal prima facie has to
be determined by reference to the Court of Appeal Law. Section 6 of the Court of Appeal Law
makes provision for cases for which there is no appeal.
13.
Section 6 begins as follows: “No appeal shall lie ..” and there then follow in sub-sections (a) –
(h) a variety of cases in which no appeal shall lie. For example sub-section (a) which provides
that no appeal shall lie against “any order allowing an extension of time for appealing from a
judgment”; and sub-section (b) “from an order of a judge of the Grand Court giving
unconditional leave to defend an action.”
14.
Sub-section (c) is the important one for present purposes-
“from any decision of the Grand Court in respect of which it is provided by any
law in force in the Islands that such decision is to be final.”
15.
The question therefore arises whether there is any law in force in these Islands whereby a
decision of dissolution under section 152(1) of the Companies Law is to be final.
16.
Section 152 itself does not express such a dissolution to be a final decision and nor does any
other provision of the Companies Law which has been brought to our attention.

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17.
This can be contrasted, although it is not a matter of company law at all, with sub-section (d)
of section 6 Court of Appeal Law which talks not about the dissolution of a company, but the
dissolution of a marriage, which is certainly as important a matter.
18.
Thus section 6(d) Court of Appeal Law provides expressly that no appeal shall lie from “any
order absolute for the dissolution or nullity of marriage in favour of any party who, having had
time and opportunity to appeal from the decree nisi on which the order was founded, has not
appealed from that decree, except upon some point that would not have been available to such
party on such appeal”.
19.
There are other provisions that are relevant. Sub-section (g) of section 6 of the Court of Appeal
Law says no appeal shall lie “in any case in which, before the decision of the Grand Court, the
parties have agreed in writing that such decision shall be final.” There is no such agreement in
this case. And sub-section (h) says no appeal shall lie “in such other cases as may be prescribed
by rules of court as, in the opinion of the Authority having power to make such rules, are of the
nature of final decisions” - but there are no rules of court that prescribe that a dissolution under
section 152 are of the nature of a final decision.
20.
It follows that this Court’s jurisdiction is not prohibited by section 6 of the Court of Appeal
Law and therefore there is no prohibition on such an appeal as is sought in the present case of
dissolution of a company.
21.
The JOLs have submitted nevertheless, that following dissolution they are functi officio. That
may be the case, but if an appeal is permissible then whether or not they are functi officio must
be subject to any decision on appeal.
22.
Thus it is in the case of arbitration. Arbitrators are functi officio when they publish their final
award, but if that award perchance might be subject to challenge in the court and following that
challenge there is a reference back to the arbitrators by the court, then their jurisdictional
functionality as arbitrators arises again – as it may also do in such a case of dissolution of a
company.
23.
The Court of Appeal of course have all the powers that the trial judge would have had.
24.
I quite understand that the JOLs are concerned about the expenses of the appeal and of any
continuing litigation, but they are entitled to ask for security for costs as they have suggested
that they are minded to do, were they to fail in this preliminary issue, and there may be other
alternative methods by which provision may be made to secure their costs, but those matters do
not lie before this court at this moment.

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25.
The Court has briefly heard from Mr. Tom Lowe QC on behalf of the Appellant. The JOLs,
having put in their written skeleton, have not appeared at this preliminary issue.
26.
In conclusion, I accept that on this preliminary issue there is jurisdiction for an appeal to lie. I
therefore decide this preliminary issue in favour of the Appellant.
The Hon John Martin, Justice of Appeal
27.
I agree.
The Rt. Hon Sir John Goldring, President
28.
I also agree.