On 11 July 2017, Charles Sussex SC, Jose-Antonio Maurellet and Richard Zimmern spoke at a seminar on Cross-border Insolvency.
Charles Sussex SC provided insights on the winding up of foreign companies in Hong Kong, Richard Zimmerntook us through Judicial Assistance and Jose Antonio Maurellet SC examined Schemes of Arrangement.
In referencing section 327 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) Charles noted that despite the fact that it is unusual to wind up a company in a jurisdiction other than its place of incorporation, the court does have power by virtue of the Ordinance to wind up a foreign incorporated company. He went on to say that when exercising its discretion, the court would consider three core requirements, which would include:
- whether there is sufficient connection to Hong Kong;
- whether there is a reasonable possibility that the winding-up order will benefit those applying for it and;
- whether the court was able to exercise jurisdiction over one or more persons in the distribution of the company’s assets.
In the context of Judicial Assistance, Richard remarked that there was no statutory source for assistance in Hong Kong and commented that this was an ‘extraordinary omission by our Administration’ before moving on to discuss the concept of ‘modified universalism’ and the limitations posed by Singularis Holdings Ltd v PricewaterhouseCoopers (Bermuda) [2014] UKPC 36 (the Singularis case.)
Jose concluded with a discussion on parallel schemes of arrangement in relation to a foreign company where there was a “sufficient connection” with Hong Kong to justify the Hong Kong courts sanctioning the scheme. He noted that in the absence of a single test which could be used to establish a sufficient connection, a judgment would be made by the court depending upon the evidence presented.
