Our litigation team has acted for the Joint and Several Liquidators (the “JLs”) of CEFC Shanghai International Group Limited (上海华信国际集团有限公司) (“CEFC Huaxin”), which went into insolvent liquidation with JLs appointed (the “Mainland Liquidation”) pursuant to the rulings by the Shanghai No.3 Intermediate People’s Court under the Enterprise Bankruptcy Law of the People’s Republic of China (the “PRC”). For the purpose of safeguarding CEFC Huaxin’s assets in Hong Kong, including a HK$7.2 billion receivable claim that CEFC Huaxin has against its Hong Kong subsidiary which had been subject to a pending creditor’s enforcement action in Hong Kong following a default judgment of €29 million, we made an urgent application (the “Application”) to the High Court of Hong Kong for a recognition order seeking recognition of the Mainland Liquidation and assistance to the JLs in Hong Kong, including among others, a stay on proceedings against CEFC Huaxin and its assets in Hong Kong.

The success of the Application is first of its kind in Hong Kong’s judicial history. Although the Hong Kong court routinely recognises and assists officeholders appointed in insolvency proceedings in some common law and civil law jurisdictions, including the Cayman Islands, the BVIs, Japan, etc., this is the first time for the Hong Kong court to recognise liquidation proceedings in Mainland China and grant assistance to the liquidators appointed by the PRC court.

The Honourable Mr. Justice Harris pointed out in his written judgment that “[given]the size of the Mainland economy and the financial problems increasingly experienced by Mainland businesses, which increasingly have assets located overseas, this is an application of considerable importance and it is necessary to consider in some detail the relevant principles, which this Court has developed in recent years and how they apply to a company incorporated in the Mainland, which as will be appreciated operates in many respects a significantly different economic and legal model to that in Hong Kong.”.

The written judgment for this unprecedented case has been handed down, for details please refer to https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=126607&currpage=T .

The case is handled by partner Roy Leung and assisted by associate Sally Ngan, as well as other professional staff including in-house translator Kei Leung.

Lawyers in our Litigation Department are experienced in a wide spectrum of winding-up proceedings and insolvency practices that involve complicated matters and cross-border issues, and are dedicated to providing cost-effective solutions to stakeholders in insolvency cases.