On Wednesday, the Court of Final Appeal ("CFA") reversed the lower courts' decision in the Yung Kee case1 , holding that the Hong Kong court has jurisdiction to order the winding up of Yung Kee Holdings Limited (the "Company"), a holding company incorporated in the British Virgin Islands and not registered in Hong Kong.
In another groundbreaking decision, the Hong Kong court in Re Ando Credit Ltd [2020] HKCFI 2775, has appointed provisional liquidators over a Hong Kong-incorporated investment manager for the express purpose of allowing the liquidators to seek recognition in the Mainland. The judgment is the latest in a series of judgments facilitating cross-border recognition and enforcement of assets and takes the degree of potential cooperation envisaged to a new level.
Application unopposed
It has long been considered that lenders under a syndicated facility retain a right to seek to recover their portion of a loan directly following a payment default, typically by seeking the winding up of obligors. This is based on the several nature of the rights of finance parties which appears in clause 2 of the standard LMA terms.
The Hong Kong government is proposing much-anticipated legislation for the introduction of a corporate rescue procedure and insolvent trading regime. Hong Kong has, for years, struggled to introduce a statutory corporate rescue procedure (CRP), having previously made unsuccessful attempts in 2000-2001, 2008-2009, and 2014. Now – with COVID-19 severely impacting the economy – the government has finally tabled the Companies (Corporate Rescue) Bill.
In 2014, the law of privilege was considered from various angles, with the year closing on a Court of Final Appeal decision emphasising the primacy of legal professional privilege ("LPP") as an absolute right guaranteed by the Basic Law of Hong Kong.
While the cases outlined below generally provide comfort that the law of privilege in Hong Kong holds strong, we offer a few practical points to help safeguard the privilege of legal advice:
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.
The Court of Appeal has declined jurisdiction to wind up Yung Kee Holdings Limited (the "Company"), a company incorporated in the British Virgin Islands ("BVI"), upholding the decision of Harris J at first instance that the Company did not have "sufficient connection" with Hong Kong.
Hong Kong Court refuses to grant an antisuit injunction to stay a winding-up petition where an arbitration agreement existed
21 August 2020
The Hong Kong Court of First Instance has dismissed an application by a British Virgin Islands (BVI) company (C) for an interim anti-suit injunction against proceedings commenced by a Cayman Islands company (D) for the winding-up of the BVI company in the High Court of the BVI.
The new Hong Kong Companies Ordinance is planned to come into operation in the first quarter of 2014. This wholesale renovation of the law governing the operation of companies in Hong Kong repeals almost all of the existing provisions of the Companies Ordinance with a few exceptions, including the existing insolvency and winding-up provisions. These will remain in their current form and be retitled as the Companies (Winding Up and Miscellaneous Provisions) Ordinance.
Hong Kong Court refuses to grant an antisuit injunction to stay a winding-up petition where an arbitration agreement existed
19 August 2020
The Hong Kong Court of First Instance has dismissed an application by a British Virgin Islands (BVI) company (C) for an interim anti-suit injunction against proceedings commenced by a Cayman Islands company (D) for the winding-up of the BVI company in the High Court of the BVI.