In Re G Ltd [2016] 1 HKLRD 167, the court sets out the powers a Hong Kong court possesses to recognise and assist foreign liquidators.
The Petitioner (“P”) sought to wind up G, a Cayman Islands company listed in Hong Kong on the grounds of insolvency. Meanwhile P sought for an early hearing of an application to appoint provisional liquidators. At the hearing on 2 October 2015, it emerged that G had issued a petition for its own winding up in the Cayman Islands and that an application to appoint provisional liquidators was to be heard on 8 October 2015. It was held that since there was no pressing need to appoint provisional liquidators immediately in Hong Kong, the judge adjourned P’s application pending the outcome of the Cayman Islands Court. On 8 October 2015, G’s application was unopposed and the Cayman Islands Court appointed KPMG in both the Cayman Islands and Hong Kong as provisional liquidators.
The court, in dismissing P’s application, stated that a company’s place of incorporation is presumably the most appropriate jurisdiction to petition of a winding-up order. However, any unregistered company may, in the court’s discretion, be wound up pursuant to section 327(3) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), if (a) the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; (b) the company is unable to pay its debts; (c) if the court is of opinion that it is just and equitable that the company should be wound up.
The court also emphsised that, at common law, it is empowered to assist overseas liquidators of insolvent companies wound up in their places of incorporation with similar insolvency regimes by giving them substantially similar powers to those which domestic liquidators would have. If the foreign liquidators considered it necessary to seek recognition and assistance from the Hong Kong court, the most straightforward way would be to obtain a letter of request from the local court, and then to apply ex parte on paper for a recognition order.
In addition, if the liquidators thought it desirable to wind up the foreign company in Hong Kong and that they could satisfy the criteria for assessing such petitions, they could apply for a winding-up order, and if required, apply to be appointed as provisional liquidators in Hong Kong pending the determination of the petition.