In a highly international cross-border restructuring, the High Court of Hong Kong has refused to assist the New York-based Chapter 11 trustee of a Singaporean subsidiary of the Cayman-incorporated Peruvian business China Fishery Group (“CFG”).
On Friday 18 January 2019, Hong Kong and the Mainland reached a milestone by signing the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters between the Courts of the Mainland and of the Hong Kong Special Administrative Region (“Arrangement“). When taken together with other similar arrangements that are in train, the Mainland Supreme People’s Court envisages that approximately 90% of judgments of a civil and commercial nature will soon be reciprocally recognised and enforced between Hong Kong and the Mainland.
In Swiss Cosmeceutics (Asia) Ltd [2019] HKCFI 336, Mr Justice Harris of the Hong Kong Court of First Instance declined to wind up a company despite it failing to establish a bona fide defence on substantial grounds. Mr Justice Harris commented on the difficulties presented by sporadic record keeping, and reiterated the principle that the burden of proof lies with the company to demonstrate a bona fide defence on substantial grounds, despite the existence of anomalies in the petitioner’s claim.
Facts
In Re Kaoru Takamatsu [2019] HKCFI 802, [2019] HKEC 906, the Hong Kong Court of First Instance has recognised Japanese insolvency proceedings and granted assistance to a trustee in bankruptcy appointed by the Japanese Court.
In the past couple of decades, jurisdictions all over the world have been required to grapple with problems arising out of corporate insolvencies with cross-border elements. Solving these problems has required considerable judicial flexibility and innovation, but judges in some jurisdictions have been helped by the enactment of legislation designed to deal with cross-border status.
The Hong Kong Court have confirmed for the first time that a foreign voluntary liquidation is eligible for common law recognition and assistance in Hong Kong.
China Culture Media International Holdings Limited, incorporated in the BVI, was wound up on 9 May 2016. China Culture was the sole shareholder of Supreme Tycoon Limited, also incorporated in the BVI.
A U.S. Bankruptcy Court (the “Bankruptcy Court”) recently enjoined a Hong Kong-based investor from exercising its shareholder purchase rights in an Asian joint venture.[1] The Bankruptcy Court’s order also prevents the investor from proceeding with litigation to enforce its rights in a Hong Kong court. Neither of the joint venture partners, or the joint venture itself, are debtors in a domestic or foreign insolvency proceeding. Nevertheless, the Bankruptcy Court ruled that injunctive relief was warranted because the investor’s actions were disrupting a sale process for the U.S.