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Hong Kong’s 2nd Recognition of Mainland Liquidator: Re Shenzhen Everich Supply Chain Co Ltd

4 Jun 2020

In Re Shenzhen Everich Supply Chain Co Ltd [2020] HKCFI 965, the Hong Kong court recognised and assisted Mainland liquidator for the second time in history. This decision further cements the approach in Re CEFC Shanghai International Group Ltd [2020] 1 HKLRD 676 which was the Hong Kong court’s inaugural recognition of Mainland liquidators.

One hopes that the combination of CEFC and the present case would prompt the start of the Mainland court’s recognition of Hong Kong insolvency proceedings.

The facts and decision

Shenzhen Everich Supply Chain Co Ltd (“Company”) was incorporated on the Mainland and carried on the business of, among others, supply chain management, logistics management, and local and international freight forwarding services.

In December 2018, the Company went into insolvent liquidation in Shenzhen.

The Company’s business had strong links with Hong Kong because, prior to its liquidation, the Company conducted some of its supply chain business through two Hong Kong subsidiaries, namely Shing Tat (HK) Limited (“Shing Tat”) and Luen Fu International Development Limited (“Luen Fu”).

Shing Tat and Luen Fu had multiple bank accounts in Hong Kong, the total balance of which amounted to some RMB 12.5 million.

Shing Tat and Luen Fu also had external trade receivables in the sum of approximately RMB 4.1 billion.

But Shing Tat and Luen Fu had been in a state of neglect because their sole director had been under Mainland police detention since 2018. The immobilisation of the sole director meant Shing Tat and Luen Fu’s financial affairs were in limbo.

In order to perform their functions under Mainland law, the Company’s Mainland liquidator needed to regularise Shing Tat and Luen Fu’s financial affairs and recover their assets.

Thus the Company’s Mainland liquidator applied to the Hong Kong court for recognition and assistance so that, among other things, the Mainland liquidator could exercise all rights that the Company may have in relation to any of its subsidiaries in Hong Kong.

Drawing on his Lordship’s own extensive reasoning in CEFC, Mr Justice Harris duly granted the recognition and assistance sought by the Mainland liquidator.


This decision is yet another welcome step in the development of Hong Kong/Mainland common law cross-border insolvency assistance.

It now firmly demonstrates the Hong Kong court’s willingness and goodwill to promote Hong Kong/Mainland cross-border insolvency assistance.

This decision should therefore put at ease any practical concerns the Mainland court might have about Hong Kong/Mainland cross-border insolvency assistance.

Cross-border recognition and assistance should not be a one-way street. It is now time for the Mainland court to reciprocate.

Look-Chan Ho and Tommy Cheung acted for the Applicants in this case.