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ONC Lawyers
Hong Kong

ONC Corporate Disputes and Insolvency Quarterly
Dear Clients and Friends,

This special newsletter aims to regularly update practitioners on important and noteworthy cases in the areas of corporate disputes and insolvency in Hong Kong, the UK and other common law jurisdictions. We would also seek to give alert on important legislative and regulatory initiatives from Hong Kong. In this issue, we have highlighted:
·        10 Corporate Insolvency Cases

 

·        4 Cross-border Insolvency Cases

 

·        2 Restructuring Case

 ·       5 Corporate Disputes Cases

·        3 Bankruptcy Cases
Our selection of cases and our analysis of them may not be exhaustive. Your comments and suggestions are always most welcome. Please feel free to contact me at ludwig.ng@onc.hk

Best regards,

Ludwig Ng

Partner, Solicitor Advocate

ONC Lawyers

 

In this Quarterly, unless otherwise stated, the following abbreviations are used:-

 

  • Section numbers refer to those in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32, Laws of Hong Kong);
  • Rule numbers refer to those in the Companies (Winding Up) Rules (Cap 32H, Laws of Hong Kong);
  • “BO” means the Bankruptcy Ordinance (Cap 6, Laws of Hong Kong);
  • “CO” means Companies Ordinance (Cap 622, Laws of Hong Kong);
  • “the Company” refers to the company which is the subject matter of the disputes or the winding up petition;
  • “PL” means provisional liquidators

 
HEADLINES OF THIS ISSUE
• Corporate Insolvency Cases
1.          Winding up Listcos in Hong Kong - recent decision illustrates the difficulties creditors may face
Re China Huiyuan Group Ltd [2020] HKCFI 2940
2.          Hong Kong Court’s approach to validation application for MPF contributions made after the commencement of winding up
Re Hsin Chong Construction Co Ltd [2020] HKCFI 3160
3.          One petition against one debtor at one time
Re China Greenfresh Group Co Ltd [2021] HKCFI 36
4.          Failure to plead the basis of a petition clearly may render the petition defective
Pointer & Dent Co Ltd [2020] HKCFI 2823
5.          Evidence in opposition must be filed within the specified timeframe. Otherwise, the Company runs the risk of having to provide security for the debt or facing an immediate winding-up order
Traxys Europe SA v Khingan Resources Ltd [2020] HKCFI 2717
6.          Court refuses injunction to restrain winding up petition based on debts arising out of a contract which contains an arbitration clause, finding that the debtor evidenced no genuine intention to arbitrate
Milestone Builder Engineering Ltd v Yau Kwong Contracting Ltd [2020] HKCFI 2669
7.          Dealing with unclaimed assets of clients when securities brokers decide to cease their business
Re Gold Fund Securities Company Limited [2020] HKCFI 2884
8.          Court of Final Appeal affirms that there is no over-recovery in the context of disgorgement of profit made by a fiduciary
Joe Zhixiong Zhou v Saif Partners II LP [2020] HKCFA 44
9.          Issue of new shares and convertible bonds does not engage section 182
Re China Ocean Industry Group Ltd [2021] HKCFI 247
10.       Duty of directors to have regard to creditors’ interests in corporate insolvency considered in detail
Wing Hong Construction Ltd v Hui Chi Yung [2020] HKCFI 2985
• Cross-border Insolvency Cases
11.       The recognition of an offshore provisional liquidation does not automatically stay proceedings in Hong Kong
Re FDG Electric Vehicles Limited [2020] HKCFI 2931
12.       Provisional liquidators appointed over a Hong Kong company with the express purpose of seeking recognition in the Mainland
Re Ando Credit Ltd [2020] HKCFI 2775
13.       Cayman Grand Court appointed soft-touch provisional liquidators over Hong Kong listed Cayman incorporated company despite extant winding up proceedings in Hong Kong
In the matter of Sun Cheong Creative Development Holdings Limited (FSD 169 of 2020)
14.       Cayman Grand Court adjourned a winding-up petition pending the decision to be made in the ongoing Hong Kong proceedings
Re Altair Asia Investments, FSD 200 of 2019 (RPJ)
• Restructuring Cases
15.        Court of Appeal allowed privatisation of Allied Properties, stating that the court should be slow to differ from the majority views
Re Allied Properties (H.K.) Limited [2020] HKCA 973
16.        Scheme of arrangement sanctioned on second attempt despite inaccuracies and inadequacies in the scheme documentation
  Re Sunbird Business Services Ltd [2020] EWHC 3459 (Ch)
• Corporate Disputes Cases
17.       Court of Appeal affirmed that unreasonableness in the Wednesbury sense is not sufficient to disturb the Chairman’s decision at an EGM
Re Convoy Global Holdings Limited [2020] HKCA 972
18.       Something more than lack of diligence in the prosecution of the proceedings is required before the Court would grant leave to a member of the company to take over the conduct of the litigation
Hou Hsiao Bing v China Technology Solar Power Holdings Ltd [2020] HKCFI 2957
19.       Cayman Court refused to stay a just and equitable winding up in favour of arbitration
  China CVS (Cayman Islands) Holding Corp. (unreported, 25 February 2019)
20.       Hong Kong Court refused to exercise its discretion to stay a just and equitable winding up in favour of arbitration
  Champ Prestige International Limited v China City Construction (International) Co, Limited [2020] HKCFI 355
21.       Shareholders’ right to claim damages under ss. 728-730 of the CO clarified
  Ge Qingfu & Ors v L&A International Holdings Ltd and Others [2020] HKCA 687
• Bankruptcy Cases
22.       Creditors’ objection to automatic discharge from bankruptcy dismissed – procedural steps should be carefully followed
Re Shum Tung Lam [2020] HKCFI 1720
23.       To justify an adjournment of a bankruptcy petition, the debtor must show reasonable prospect of paying the petition debt and any undisputed debts owed to supporting creditors within a reasonable time
Robertson v Wojakovski [2020] EWHC 2737 (Ch)
24.       Section 29 application refused as the Court found that it is unlikely to reveal any new information due to change in circumstances
Joint and Several Trustees of the Property of So Ching Wan v Assen Ltd [2020] HKCA 1081