In Re Guy Lam Kwok Hung [2023] HKCFA 9, the Court of Final Appeal clarified when a debtor can resist a bankruptcy petition based on an exclusive jurisdiction clause (EJC) in his contract with the petitioner creditor. It is important to appreciate the Court’s reasoning and how it can be applied to various factual scenarios.

Section 503(b)(9) Overview

The enforcement of court orders that are designed to preserve, trace or track crypto-assets within North America is often limited in practice. As seen in the recent Ontario decision of Cicada 137 LLC v. Medjedovic (“Cicada”),^[1] mechanisms by which legal enforcement principles can be effectively applied against stolen or misappropriated crypto-assets are constrained.

In the recent case of Re JD Group Ltd in liquidation; Bhatia v Purkiss (as liquidator of JD Group Ltd) a company director appealed a decision that he was liable for VAT fraud.

Background

Mr Bhatia was the sole director of a company trading in mobile phones. He was sent a HMRC notice explaining the risks of mobile phone trading and liability for involvement in VAT fraud.

In the latest decision of the Hong Kong court to consider the interplay between arbitration clauses and winding-up or bankruptcy petitions, on 22 May 2023, the Hon. Linda Chan J (the Judge) made a winding-up order against Simplicity & Vogue Retailing (HK) Co. Limited (the Company) and rejected the Company’s argument that the dispute over the underlying debt should be referred to arbitration.

The English tax authority, HMRC, has successfully challenged the restructuring plans put forward by The Great Annual Savings Company Limited (GAS) and Nasmyth Group Limited (Nasmyth).

This is the first time that HMRC has actively challenged restructuring plans at the sanction hearing. The key takeaways from the judgments:

Nasmyth

Background

The impact of the opening of insolvency proceedings on options granted in combined contracts (for example, a lease contract containing a call option for the leased real estate) had been in dispute for a long time.

Decision

The Austrian Supreme Court held that call options granted in lease contracts where the option fee has been paid do not expire with the opening of insolvency proceedings, nor are they subject to the right of the insolvency administrator to terminate the lease contract.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit recently held that, at a minimum, a substantial change in circumstances is required to justify modification of a bankruptcy plan under Section 1229.

The Eighth Circuit BAP also determined that the bankruptcy court’s ruling that the debtors met their burden of showing an unanticipated, substantial change in circumstances was not clearly erroneous, despite multiple changes by the debtor, nor was the bankruptcy court’s finding that the fourth modified plan was feasible and confirmable.

The law regarding moratoriums imposed under Section 14 of the Insolvency and Bankruptcy Code^[1] (hereinafter referred to as the IBC 2016) has been often explained and clarified by various judicial pronouncements, which aptly interpret the multitudes contained in Section 14 of the IBC.

In a recent judgment passed by the National Company Law Appellate Tribunal (NCLAT), in the case of Somesh Choudhary v Knight Riders Sports Private Limited & Anr¹, it was held that claims arising out of Intellectual Property Rights would come within the ambit of Section 5 (21) of the Insolvency and Bankruptcy Code, 2016