22 January 2020
Hong Kong Recognized Mainland Liquidation Administrators for the First Time
On 13 January 2020, the Hong Kong Court of First Instance granted an order recognising the Mainland insolvency proceedings in respect of CEFC Shanghai International Group Limited and providing assistance to its Mainland liquidators in Hong Kong in Re CEFC Shanghai International Group Limited  HKCFI 167, marking the first time that a Hong Kong Court has recognized Mainland insolvency proceedings and assisted liquidators there.
In his judgment, Mr. Justice Jonathan Harris summarised the principles that govern recognition and assistance in relation to foreign insolvency proceedings, and concluded that the decision in Galbraith v Grimshaw  AC 508 was "inconsistent with contemporary cross-border insolvency law and its reasoning is inapplicable to modern common law cross-border insolvency assistance".
Further, Mr. Justice Harris discussed towards the end of the judgment (from  to ) the uncertainty surrounding whether Mainland courts will favour and promote "there being one bankruptcy in a transnational context and how in practice such cases would be approached" by listing a number of bankruptcy-related cases in the Mainland which "have an element of recognition" but are understood to "not being viewed by Mainland judges as involving a formal recognition of a foreign insolvency proceeding". As such, this judgment may be of interest to practitioners who want to have a "crash course" on cross-border insolvency matters in the Mainland.
The full judgment is available here. Mr. Justice Jonathan Harris is a member of the Advisory Committee of the ABLI-III Restructuring Project.
A more detailed commentary of the case is available here. Mr Look-Chan Ho, who acted for the applicant in the case along with Mr Tommy Cheung, is a member of the Working Committee of the Restructuring Project.
Ms Shen Yuhan, a co-reporter for China of the Restructuring Project, is a member of the Mainland joint liquidator team in the case.
Photo credit: South China Morning Post