Robertsons obtaining Hong Kong’s first order to recognize a trustee in bankruptcy appointed by the Court of a non-common law jurisdiction
Robertsons made the first successful application, on behalf of its foreign Client, for recognition of a bankruptcy order made by an overseas Court of a law jurisdiction in October 2018.
Robertsons’ Client had been appointed the official trustee in bankruptcy of an individual in Japan. He sought assistance from Robertsons for such appointment to be recognized by the Hong Kong Court in order to avoid needing to file a fresh bankruptcy petition in Hong Kong.
Established principles of private international law stipulate that the domiciliary law of the place of incorporation of a company determines the validity of its formation and continued existence as a legal person. On that basis, a petition to wind up a company in a jurisdiction other than its place of incorporation is, on the face of the case, unusual.
In the past five years, however, increasing numbers of application have been made to the Courts seeking recognition of foreign liquidators and trustees in bankruptcy, seeking to streamline the process of asset recovery in cross-border insolvencies.
Given the increasing international focus on measures intended to encourage efficient cross-border insolvency and Hong Kong’s status as an international financial centre, the Hong Kong Courts have become more prepared to provide judicial assistance by recognizing bankruptcy and liquidation orders granted by foreign Courts of common law jurisdictions.
The Hong Kong Companies Court, under the lead of the Honourable Mr. Justice Harris, has developed a comprehensive approach to handle such applications. The Court has set out in a series of judgments, guidance as to how practitioners should assist the Court in handling with these recognition applications.
Nevertheless, these applications and precedents were limited to the granting of assistance to only foreign Courts of common law jurisdictions, such as BVI, Bermuda, Cayman Islands and Australia. Liquidators and trustees in bankruptcy appointed by non-common law Courts have hitherto struggled through repetitive insolvency petitions and proceedings in Hong Kong in order to acquire the very same official appointments they have already obtained in their domestic Courts.
In October 2018, the Hong Kong Court granted a first recognition order to Robertsons’ Japanese Client, recognizing his appointment as the trustee in bankruptcy for a bankrupt in Japan. Robertsons’ Japanese Client will now proceed with effect to recover the bankrupt’s assets in Hong Kong without needing to commence bankruptcy proceedings afresh against the bankrupt in this.
With this latest decision, it appears that the recognition proceedings will, henceforward, extend to cover non-common law jurisdictions. Robertsons’ litigation team is grateful for this development and the common-sense approach of the Court and the Honourable Mr. Justice Harris to streamlining the cross-border insolvency asset recovery process and is honoured to have been a pioneer in this area of law.