We previously wrote about the Court’s attitude to liquidators’ applications for directions on matters arising in a compulsory winding up (i.e., by the court) under section 200 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap.

Statutory demand is a common and important tool in the winding up process. But recently, the Hong Kong Court of First Instance has reminded us that it is by no means a must.

In Re Grand Peace Group Holdings Limited [2021] HKCFI 2361, the Hong Kong Court refused to exercise its discretionary jurisdiction to wind up an offshore holding company due to difficulties in the recognition of Hong Kong liquidators in the BVI.

Background

1. Introduction 

As discussed in our previous blog post, the decision for provisional liquidators to apply for directions on the distribution of funds can be a difficult one to make.

The long-running saga between Shandong Chenming Paper Holdings (“Shandong Chenming“) and Arjowiggins HKK2 Ltd (“Arjowiggins“) has continued with the Court of Appeal handing down its judgment on an appeal against a lower court judgment which had dismissed Shandong Chenming’s application to injunct Arjowiggins from presenting a winding-up petition against Shandong Chenming (Shandong Chenming Paper Holdings Limited v. Arjowiggins HKK2 Limited [2020] HKCA 670).

The Hong Kong Court has broken yet more new ground by recognising Mainland reorganisation proceedings for the first time in Re HNA Group Co Limited [2021] HKCFI 2897.

The recent decision in Re The Liquidator of Shenzhen Everich Supply Chain Co, Ltd (in liquidation in the People’s Republic of China) [2020] HKCFI 965 reaffirms the willingness of the Hong Kong Companies Court (the “Companies Court”) to recognise the winding-up of a company in Mainland China and thereby grant recognition and assistance to liquidators appointed in the Mainland.

In another leap forward for cross-border insolvency cooperation between Hong Kong and Mainland China, the Hong Kong Court has issued its very first letter of request to a Mainland Court requesting recognition and assistance of Hong Kong liquidators under the new arrangement for mutual recognition of and assistance to insolvency proceedings introduced on 14 May 2021 (New Arrangement, which we wrote about

In The Joint and Several Provisional Liquidators of China Oil Gangran Energy Group Holdings Limited [2020] HKCFI 825, the Hong Kong Court continued a trend of recognising foreign soft-touch provisional liquidators.