Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA
Legal Era|December 2020
A TEST CASE IN THE MAKING?
Naomi Moore, Daniel L. Cohen, Jeremy Haywood, Jessica Lambach, Jingli Jiang
Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA

RE ANDO PAVES THE WAY FOR A LONG-AWAITED TEST CASE, WHICH HAS EMERGED AT A TIME WHEN A PROPOSED FRAMEWORK FOR COOPERATION BETWEEN COURTS IN HONG KONG AND MAINLAND CHINA IN CROSS-BORDER CORPORATE INSOLVENCY MATTERS IS IN DEVELOPMENT.

In Re Ando Credit Limited [2020] HKCFI 2775 (“Re Ando”), the Hong Kong Companies Court recently appointed provisional liquidators over a Hong Kong company, Ando Credit Limited, in novel circumstances with potentially significant consequences. According to the Court’s written reasons dated November 11, 2020 (published in light of the unprecedented nature of the decision), the provisional liquidators were appointed at a hearing on October 23, 2020, for the express purpose of enabling them to seek recognition in Mainland China to facilitate the recovery of very substantial receivables owed to the company by Mainland China-based debtors.

Earlier this year, prior to Re Ando, the Hong Kong Companies Court recognized Mainland China-appointed insolvency officeholders for the first time.1 With the growing number and significance of corporate bankruptcies in Mainland China, one important but unanswered question for international investors and the restructuring community is whether courts in Mainland China are willing and able to reciprocate by recognizing and granting assistance when needed to insolvency officeholders appointed in Hong Kong. Re Ando paves the way for a long-awaited test case, which has emerged at a time when a proposed framework for cooperation between courts in Hong Kong and Mainland China in cross-border corporate insolvency matters is in development.

This story is from the December 2020 edition of Legal Era.

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This story is from the December 2020 edition of Legal Era.

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