SINGAPORE COURT OF APPEAL DECISION HIGHLIGHTS THE IMPORTANCE OF ACCURATE INTERNAL SANCTIONS ASSESSMENTS IN CONTRACTUAL RISK MANAGEMENT

If an internally maintained sanctions list returns red flags, but the entity is not on an official sanctions list, is that sufficient to justify activating a sanctions clause to deny payment to that party? What considerations should financial institutions take into account when managing risk in dealing with sanctioned, or potentially sanctioned, entities? These are … Read more

COMI is first port of call – a modified framework for recognising foreign insolvency proceedings in Hong Kong

Historically, the common law has only recognised foreign insolvency proceedings commenced in the jurisdiction in which the company is incorporated. This may no longer be the case in Hong Kong. Going forward, a Hong Kong court will now recognise foreign insolvency proceedings in the jurisdiction of the company’s “centre of main interests” (COMI). Indeed, it … Read more

Not a soft touch – Hong Kong Court’s increased scrutiny of offshore soft-touch provisional liquidations

A recent pair of decisions of the Hong Kong Companies Court (the “Court”) has immense potential significance for debtor companies listed on the Stock Exchange of Hong Kong (“HKEx”) and their Hong Kong creditors. Facts Re Lamtex Holdings Ltd [2021] HKCFI 622 and Re Ping An Securities Group (Holdings) Ltd [2021] HKCFI 651 both involved a familiar factual … Read more

Hong Kong to Introduce Corporate Rescue Regime and Insolvency Trading Regime

After abortive attempts in 2000-2001, 2008-2009, and 2014 to introduce a statutory corporate rescue procedure, the Hong Kong Government has recently announced in a paper submitted to the Legislative Council that it will present the Companies (Corporate Rescue) Bill (the “Bill”) to the Legislative Council in early 2021. Once enacted, the Bill will introduce a … Read more

IS THE JUICE WORTH THE SQUEEZE?

This post refers to the Court of Appeal decision in Shandong Chenming.  The Court of Final Appeal has in May 2022 further considered the second core requirement in Shandong Chenming. See our blog post here. The natural and most appropriate jurisdiction in which to wind up a company is its place of incorporation. The Hong … Read more

Will you stay no longer? Hong Kong Companies Court considers general stay provisions in recognition orders

When the Hong Kong Court recognises offshore soft-touch provisional liquidation, will there be an automatic stay of proceedings in Hong Kong? Recently, in Re FDG Electric Vehicles Limited [2020] HKCFI 2931, the Companies Court answered “no”. In doing so, the Court revisited the wording of the standard-form recognition order. Soft-touch provisional liquidations A soft-touch provisional … Read more

Good faith in bad times

Can a good faith obligation under PRC law preclude a party from bringing a winding up petition in Hong Kong? A recent Hong Kong Court of First Instance suggests not. In Harbor Prosper (HK) Investments Ltd v. Elegant Profit (Hong Kong) Ltd [2020] HKCFI 2261, the respondent to a winding up petition argued that it … Read more