In a pair of recent contrasting judgments, Re Agritrade Resources Ltd [2020] HKCFI 1967 and Re Rare Earth Magnesium Technology Group Holdings Ltd [2020] HKCFI 2260, the Hong Kong Court has once again confirmed its pragmatic approach towards applications by foreign liquidators and provisional liquidators for recognition and assistance in Hong Kong. The judgments emphasize the importance of adhering to the standard forms of order adopted by the Hong Kong courts in respect of such applications, and the need for any departure from the standard form to be fully justified.

In a recent judgment, the Hong Kong Court reiterated the principles outlined in Kam Leung Sui Kwan v. Kam Kwan Lai [2015] 18 HKCFAR 501 (Yung Kee), the case concerning the famous roastgoose restaurant in the heart of Hong Kong's Central district, when determining whether to exercise its discretion to wind up a foreign-incorporated company. In this case, the court also refused to grant a stay of the petition in favor of arbitration.

Florida escape

The Singapore High Court has recently granted recognition to Hong Kong liquidation proceedings and liquidators for the first time under Singapore's enactment of the United Nations Commission on International Trade Law Model Law on Cross Border Insolvency (the model law).

In several Commonwealth jurisdictions, the corporate legislation allows creditors to petition a court to order the winding up of a debtor in circumstances where that debtor is unable to pay its debts as they fall due. Such legislation generally presumes that the debtor is insolvent if it has failed to comply with a statutory notice requiring the debtor to pay a certain debt within a given period of time (a statutory demand).

The Australian Government has introduced new laws which are intended to avoid unnecessary corporate insolvencies in light of the challenges presented by the unfolding COVID-19 global pandemic. The new laws came into effect on 25 March 2020 and include:

Just in time for the Chinese New Year, a Hong Kong court has taken a major step forward in the developing law on cross-border insolvency by recognizing a mainland Chinese liquidation for the first time. In the Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167, Mr. Justice Harris granted recognition and assistance to mainland administrators in Hong Kong so they could perform their functions and protect assets held in Hong Kong from enforcement.

Just in time for Chinese New Year, a Hong Kong court has taken a major step forward in the developing law on cross-border insolvency by recognising a mainland Chinese liquidation for the first time. InJoint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167, Mr Justice Harris granted recognition and assistance to mainland administrators in Hong Kong so they could perform their functions and protect assets held in Hong Kong from enforcement.

A five judge majority of the Supreme Court of Canada has allowed an appeal brought by the Alberta Energy Regulator (“AER”) and the Orphan Well Association from the decision of the Alberta Court of Appeal in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124 (“Redwater”). The case has been one of the most closely watched by the Canadian oil and gas industry in decades.

The Alberta Court of Appeal has dismissed the appeal brought by the Alberta Energy Regulator and the Orphan Well Association from the decision of the Court of Queen’s Bench of Alberta in Re Redwater Energy Corporation. A majority of the panel held that the provisions of the provincial legislation governing certain actions of licensees of oil and gas assets do not apply to receivers and trustees in bankruptcy of insolvent companies, given the paramountcy of the Bankruptcy and Insolvency Act over provincial legislation where the governing provisions conflict.

When a lender makes an interest bearing loan to a borrower for a fixed term, the contract may provide that the borrower cannot repay the principal sum before maturity. This is often referred to as a “no call” provision. The intent of this provision is to protect the lender’s expected return on its investment during the term of the contract. Otherwise, the lender could be faced with the loss of interest payments that the borrower would have otherwise paid to the lender.