A milestone for the application by Hong Kong liquidators for recognition and assistance in the Mainland

A milestone for the application by Hong Kong liquidators for recognition and assistance in the Mainland

A milestone for the application by Hong Kong liquidators for recognition and assistance in the Mainland 1400 787 Hugo

Before 14 May 2021, there was no procedure between Mainland China and Hong Kong for mutual recognition of insolvency processes. This situation changed on 14 May 2021. The Supreme People’s Court and the Secretary for Justice signed two documents, namely Record of Meeting of the Supreme People’s Court and the Government of the Hong Kong Special Administrative Region and Mutual Recognition of and Assistance to Bankruptcy (Insolvency), and the Supreme People’s Court’s Opinion on taking forward a pilot measure in relation to Recognition and Assistance to Bankruptcy (Insolvency) Proceedings in the Hong Kong Special Administrative Region (the “Supreme People’s Court’s Opinion”), which established a cooperation mechanism (the “Cooperation Mechanism”).

Under the cooperation mechanism, the Mainland and Hong Kong jurisdictions agreed to the terms that several cities, such as Shanghai, Shenzhen and Xiamen in the Mainland and Hong Kong would mutually recognize and assist each other in matters regarding insolvency.

The first application made in accordance with the Cooperation Mechanism was in Re Samson Paper Company Limited [2021] HKCFI 2151. In the case, the Court of First Instance opined that formal recognition by the Shenzhen Intermediate People’s Court would be the first occasion on which a court in the Mainland has formally recognized and assisted a liquidator appointed by the Hong Kong High Court.

The Re Samson Paper Company Limited case stipulates the procedure for an application by a Hong Kong liquidator. Article 6 of the Supreme People’s Court’s Opinion provides that a Hong Kong liquidator shall submit the following documents:

  • A written application;
  • A letter of request for recognition and assistance issued by the High Court of Hong Kong;
  • The relevant documents on the commencement of the Hong Kong Insolvency Proceedings and in relation to the appointment of the Hong Kong Administrator;
  • Materials evidencing that the debtor’s centre of main interests is in the Hong Kong Special Administrative Region, and if any of such materials was acknowledged outside the Mainland, it shall be certified according to the laws of the Mainland;
  • A copy of the document evidencing a successful application for recognition and assistance;
  • A copy of the identity document of the administrator in Hong Kong and if such document was acknowledged outside the Mainland, it shall be certified according to the laws of the Mainland; and
  • Documentary proof showing that the debtor’s principal assets in the Mainland are located in a pilot area, or that it has a place of business or a representative office in a pilot area.

Furthermore, the Court of First Instance held that the Hong Kong court has inherent jurisdiction to grant letters of request to permit Hong Kong liquidators to seek recognition and assistance in other jurisdictions.

If you would like to apply for a letter of request for your liquidator to carry out cross-border duties, please contact us today for a discussion.

 

Back to top
Privacy Preferences

When you visit our website, it may store information through your browser from specific services, usually in the form of cookies. Here you can change your Privacy preferences. It is worth noting that blocking some types of cookies may impact your experience on our website and the services we are able to offer.

Click to enable/disable Google Analytics tracking code.
Click to enable/disable Google Fonts.
Click to enable/disable Google Maps.
Click to enable/disable video embeds.
Our website uses cookies, mainly from 3rd party services. Define your Privacy Preferences and/or agree to our use of cookies.