Creditors seeking to enforce an undisputed debt against a solvent foreign non-Hong Kong company in the courts of Hong Kong will welcome the recent judgment of the Court of Final Appeal (CFA) in Shandong Chenming Paper Holdings Limited v Arjowiggins HKK 2 Limited [2022] HKCFA 11, as the CFA helpfully backs a broader and more commercially holistic interpretation of a key tenet relating to how Hong Kong courts approach certain threshold assessments involving winding up petitions brought by creditors in Hong Kong against foreign incorporated companies.

In the recent case Re CW Advanced Technologies Limited, the Hong Kong court took the opportunity, albeit only obiter dicta, to raise and briefly comment on certain unresolved questions surrounding three issues of interest to insolvency practitioners:

A party's right to terminate a contract in the event that the other party becomes insolvent is one of the most commonly seen termination rights in outsourcing and technology agreements. However, the effectiveness of such provisions in the future could change in agreements governing the provision of IT services, as the new Enterprise and Regulatory Reform Act 2013 gives the Government the power to extend the law that currently protects supplies of gas, water, electricity and communication services during an organisation's insolvency to the supply of IT services.