Hurdles to Winding Up Foreign Companies in Hong Kong Re-examined
International Business Articles
ONC Lawyers
Hong Kong
In a recent decision of Re Insigma Technology Co Ltd unreported, HCCW 224/2013 (15 October 2014), Harris J restated the general principles of winding up a foreign company under section 327 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32). He also warned the prospective petitioners of the possibility that an indemnity costs order may be made against them if their Petitions to wind up a foreign company were found to be speculative.
Insigma Technology Co Ltd (“Insigma”) is a company incorporated in the People’s Republic of China (“PRC”) and listed on the Shanghai Stock Exchange. It has not been registered in Hong Kong under Part XI of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (“CWUMPO”) or Part 16 of the Companies Ordinance (Cap 622). It has no established place of business in Hong Kong either. Nevertheless, Insigma has a 95% interest in a Hong Kong incorporated company, Innovation (Hong Kong) International Investment Ltd (“Innovation”).
In 2010, Alstom Technology Ltd (“Alstom”) obtained an arbitration award against Insigma in Singapore (the “Award”). Alstom’s attempt to have the Award recognized and enforced in the Hangzhou Intermediate People’s Court of Zhejiang Province was unsuccessful with the result that the debt was not recognised in PRC. Alstom had also accepted that it could not apply to wind up Insigma in PRC.
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December 2014