The High Court of Hong Kong refused to allow a Chapter 11 Trustee to disclose a Decision from Hong Kong winding up proceedings in the US bankruptcy court. The US proceedings were commenced to prevent a creditor from taking action following a breach of undertakings given to the Hong Kong court in circumstances where the company had no jurisdictional connection with the US.

This article considers the landmark case by the Hong Kong Court of First Instance, in Joint and Several Liquidators of CEFC Shanghai International Group Ltd [2020] HKCFI 167. It is a significant step that the Hong Kong Courts have taken, enhancing cross-border insolvency cooperation between Mainland China and Hong Kong.

Facts

Hong Kong’s well-established financial market, low taxation incentives, and laissez-faire policies have consistently earned the city the title of the World’s Freest Economy and the third easiest place to do business in. Yet, the city’s on-going social movements seem to be having an influence on its financials.

Hong Kong is known to be an international business hub, and also serves as a gateway to China’s Belt and Road Initiative, which has over 65 countries participating in developing infrastructure and investment initiatives between East Asia and Europe.

High value transactions are commonplace and one way to protect the interests of Hong Kong businesses transacting with foreign companies is to seek a guarantee from the directors or shareholders of the foreign company.

The Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (CAP 32) (the “Amendment Ordinance”) came into force on 13 February 2017. One of the key objectives of the Amendment Ordinance is to increase protection of creditors. Under the Amendment Ordinance, liquidators are given the avoidance power to set aside transactions at an undervalue and unfair preferences. 

While most jurisdictions provide liquidators with wide investigative powers to locate and realise assets locally, the exercise of such powers becomes more complicated when the assets are situated overseas. As more and more businesses expand globally and corporate structures become equally more complex, the liquidators’ task becomes more problematic in winding up such companies.

Introduction

While most jurisdictions provide liquidators with wide investigative powers to locate and realise assets locally, the exercise of such powers becomes more complicated when the assets are situated overseas. As more and more businesses expand globally and corporate structures become equally more complex, the liquidators' task becomes more problematic in winding up such companies.

Hong Kong Court records available publicly today show that a Petition was presented last Friday to wind up O.W. Bunker China Ltd (a Hong Kong company).  The records indicate that the Winding-up Petition was presented by the company itself rather than a creditor.  This is consistent with the steps taken by other companies within the OW Bunker group to seek Court protection.

Introduction

ADVISORY | DISPUTES | TRANSACTIONS Financial Litigation roundup Spring 2015 Welcome to the latest edition of our Financial Litigation roundup. In this edition, we consider recent judgments and ongoing cases from the banking and financial world in the UK and Asia, as well as regulatory developments across those jurisdictions. English judgments SPL Private Finance (PF1) IC Limited and others v Arch Financial Products LLP and others; SPL Private Finance (PF2) IC Ltd and other v Robin Farrell. more> McWilliam v Norton Finance (UK) Ltd (in liquidation).