Mark Byers and others (Respondents) v Chen Ningning (Appellant) (Virgin Islands)

Case summary

Case ID

JCPC/2026/0017

Jurisdiction

British Virgin Islands

Parties

Appellant(s)

Chen Ningning

Respondent(s)

Mark Byers, Matthew Richardson, Pioneer Freight Futures Company Limited (in liquidation)

Issue

(1) Was the Court of Appeal wrong to hold that the loss to an insolvent company caused by preferential payments made to a creditor includes the loss suffered by its general body of creditors? (2) Was the Court of Appeal wrong to order the director of the company to pay equitable compensation for such loss, in circumstances where the director had not obtained any profits by the breach of their fiduciary duty? (3) Was the Court of Appeal wrong to award pre-judgment interest at 5% per annum running from 29 November 2009?

Facts

The appellant was the sole director of the company Pioneer Freight Futures Ltd (“PFF”). PFF entered into a loan agreement with Zenato Investments Ltd, by which Zenato paid US $13m to PFF. By 23 October 2009, PFF was commercially insolvent and liquidation or some other protective process was inevitable. In November 2009, PFF repaid its debt to Zenato in three tranches (“the Zenato Payments”). The appellant was the sole authorised signatory on the account from which the Zenato Payments were made. In 2014, the respondents (as joint liquidators of PFF) brought proceedings in the British Virgin Islands’ Commercial Court claiming the sum of US $13m together with interest, alleging that the appellant had breached her fiduciary duties as director of PFF for causing or authorising the Zenato Payments. The claim was initially dismissed by the BVI courts, but on appeal to the Judicial Committee of the Privy Council it was held that Ms Ningning had breached her fiduciary duty to PFF by failing to prevent the Zenato Payments. The Judicial Committee remitted to the BVI High Court the question of what sums if any, Ms Ningning should pay to the liquidators for her breaches of fiduciary duty to PFF in relation to the Zenato Payments. The BVI High Court held that PFF had suffered no net loss as a result of the Zenato Payments because those payments had discharged a valid debt owed by PFF to Zenato, and therefore that there was no basis for ordering Ms Ningning to pay compensation. The Court of Appeal (Eastern Caribbean Supreme Court) allowed PFF’s appeal against the High Court’s decision. The Court of Appeal held that PFF was entitled to equitable compensation for loss to the company caused by Ms Ningning’s breach of her fiduciary duty to act in the interests of the company, and that this loss was to be equated with the loss to the general body of creditors caused by the preferential payment. The Court of Appeal therefore ordered Ms Ningning to pay $13m of compensation to the liquidators and awarded pre-judgment interest at a rate of 5% per annum from 29 November 2009. Ms Ningning now appeals to the Judicial Committee of the Privy Council. She argues that the Court of Appeal was wrong to overturn the High Court’s ruling that the Zenato Payments did not result in a loss to PFF because they discharged a valid debt in equal amount owed by PFF to Zenato. She also argues that at any rate she is not liable to pay equitable compensation because she did not make a profit from the breach of her fiduciary duty, and that the Court of Appeal should have awarded pre-judgment interest only from the date the claim was issued, and at a rate of no more than 3% per annum.

Date of issue

11 March 2026

Case origin

Appeal As of Right

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