The Grand Court of the Cayman Islands granted common law recognition and assistance to the foreign Liquidators of a Cayman Islands company post Rubin v Eurofinance and Singularis Holdings Limited v PwC.
In Re China Agrotech Holdings Limited Ltd (FSD 157 of 2017 (NSJ)), the Grand Court of the Cayman Islands ("Cayman Court") granted Liquidators appointed by the High Court of Hong Kong leave to present and consent to a scheme of arrangement on behalf of China Agrotech Limited (the "Company") based on a common law discretion.
Briefings
Navigating the tension between private dispute resolution and insolvency class actions, March 2018
In Lasmos Limited v. Southwest Pacific Bauxite (HK) Limited1, the Hong Kong Court of First Instance dismissed a winding-up petition based on an unsatisfied statutory demand.
In a recent Court of First Instance case before Harris J, Southwest Pacific Bauxite (HK) Ltd (Company) sought to strike out a winding-up petition issued against it by Lasmos Ltd (Petitioner). The ground of insolvency relied on by the Petitioner was a statutory demand of US$259,700.48 (Debt), arising out of a management services agreement (MSA) between the Company and the Petitioner (Parties). The Company disputed the Debt.
On 2 March 2018, the Hong Kong Court of First Instance (“CFI“) issued a notable decision which signifies a development of Hong Kong law in the contexts of insolvency and arbitration. The CFI held in Lasmos Limited v Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426 that a winding-up petition issued on the ground of insolvency should generally be dismissed if there is an arbitration clause contained in an agreement giving rise to a debt relied on to support the petition.
In Lasmos Ltd v. Southwest Pacific Bauxite (HK) Ltd (02/03/2018, HCCW 277/2017), [2018] HKCFI 426 (Lasmos), the Court of First Instance held that a winding-up petition based on a disputed debt may be dismissed if there was an arbitration clause in the underlying agreement, upon which arbitration has commenced.
Manley Toys Limited once claimed to be the seventh largest toy company in the world. Due to ongoing litigation and declining sales, it entered into a voluntary liquidation in Hong Kong. On March 22, 2016, the debtor’s appointed liquidators and foreign representatives filed a motion for recognition under chapter 15 of the Bankruptcy Code. The motion was opposed by ASI Inc., f/k/a Aviva Sports, Inc. (“Aviva”) and Toys “R” Us, Inc. (“TRU”).
The impact of an arbitration clause on the Court’s discretion to grant a winding up order was recently considered by the Court of First Instance in Hong Kong.
In Lasmos Limited v Southwest Pacific Bauxite (HK) Limited (HCCW 227/2017; [2018] HKCFI 426), the Court dismissed a winding up petition in view of an arbitration clause contained in the agreement between the parties and held that the dispute concerning the alleged debt should be dealt with in accordance with the arbitration clause.
Facts
A Guide to Doing BUSINESS IN HONG KONG Contents Introduction Hong Kong at a Glance 1 Political System 1 Legal System 1 Economic System 1 Investment Incentives 1 Financial System 1 International Relationships 1 Relationship with the PRC 2 Belt and Road Initiative 2 General Data Protection Regulation 2 Business Vehicles Types of Business Vehicle 5 Business Registration 5 Special Types of Business 5 Hong Kong Companies 5 Incorporation of a Private Limited Company 5 Branch Operations 7 Reasons for Choosing a Branch or Subsidiary 7 Representative Offices 8 Sole Proprietorships/General Partnershi