Cross‐border Insolvency in Hong Kong: Developments and Updates 2025

In recent years, particularly in 2020 and 2021, the Hong Kong High Court has been actively developing its common law framework in relation to the recognition of and assistance to foreign insolvency representatives. This article aims to provide an update to the common law recognition framework in Hong Kong and argues that the recent developments are intended to achieve two objectives, namely harmonizing the Hong Kong common law position with the relevant principles under the UNCITRAL Model Law on Cross‐border Insolvency; and strengthening the implementation of the mutual recognition framework on corporate insolvency proceedings between Mainland China and Hong Kong. This article also discusses how some of the unresolved issues in the Hong Kong common law recognition framework may be approached in light of these two objectives.

Contents: 1. Introduction 2. The Insolvency Regulation 3. The Uncitral Model Law 4. Assistance Pursuant to Section 426 of the Insolvency Act 1986 5. Jurisdiction for Companies: Winding Up, Administration, CVAs and Schemes of Arrangement 6. Recognition of Foreign Corporate Insolvency Proceedings at Common Law 7. Ancillary Winding Up 8. Jurisdiction for Individuals: Bankruptcy, Debt Relief Orders and IVAs 9. Recognition of Foreign Bankruptcies at Common Law 10. Consequences of Recognition at Common Law 11. Bars to Common Law Recognition 12. Enforcement of Judgements and Orders Made in Foreign Insolvency Proceedings 13. Discharge of Debts by Foreign Insolvency Proceedings 14. Common Law Protection for an English Insolvency Proceeding 15. Priorities and Set-Off

Deliberations are in the final stages for enacting a cross‐border insolvency law in India based on the UNCITRAL Model Law on Cross Border Insolvency 1997 (‘Model Law’). The cross‐border insolvency regime in India will provide an avenue for recognising foreign insolvency proceedings in India. Although it is a matter of time before India adopts the Model Law, it is important to examine whether there remains an independent basis in addition to the Model Law for recognising and providing assistance to cross‐border insolvency proceedings in India. This is crucial on account of the following reasons: first, the Model Law does not provide that it is the exclusive pathway for foreign creditors to seek remedies under domestic law. The Model Law, as reflected in Article 7, was intended by its drafters to be an additional gateway to those provided under local laws. The proposed Indian law in Article 5 of Draft Part Z of the Insolvency and Bankruptcy Code 2016 also does not depart expressly from this principle. Second, there may be instances where neither the ‘Centre of Main Interests’ nor an establishment of a corporate debtor is situated in India; therefore, assistance and cooperation in respect of such cross‐border insolvency proceeding can only be based on the inherent common law jurisdiction, if available. Third, the cross‐border insolvency framework in India will be premised on the requirement for reciprocity and, therefore, countries that do not meet the reciprocity requirement may find it beneficial if such an independent basis for recognition exists in India. This article argues that foreign representatives should be encouraged to explore the possibility of seeking assistance from the commercial courts in India under the common law principles governing cross‐border insolvency and that the courts in India should be open to this possibility.

In this investigation, I will compare and contrast the UNCITRAL model law on cross-border insolvency law (hereafter referred to as ‘UNCITRAL model law’) with the EU Insolvency Regulation against the backdrop of various sources or dispensations of cross-border insolvency law. In this comparison, I will highlight the similarities and differences between the two, as well as discuss the other sources in depth, as they largely inform my research. My main aim in including the other sources in this comparative study is to provide deeper insight into these two sources of international cross-border insolvency law, as provided for by academics and sages in the field of insolvency law. These other sources include legislation, common law, treaties and regional dispensations.

In this chapter the private international law of corporations and of corporate insolvency is examined as well as the role of the lex incorporationis, and the question whether it is appropriate as a conflicts rule of wide application. The question whether the law should regard the corporate veil as impenetrable, and the doctrine of separate corporate personality as of rigid application, in the 21st century, is examined with a critical eye. The problems created when a corporation makes a contract which is ultra vires, or illegal, or made by an officer not duly authorized to act, are disentangled. Corporate insolvency is summarized in relation to jurisdiction (COMI and domicile) and the extent to which an English court can assist a foreign court exercising insolvency jurisdiction by reference to the Insolvency Act s 426, the UNCITRAL Model Law, and the common law.

This chapter assesses the ongoing potential application of the Recast Insolvency Proceedings Regulation (RR) in the United Kingdom. With Brexit, the UK ended its membership of the EU, a process leading to a formal UK/EU withdrawal agreement and the enactment in the UK of the European Union (Withdrawal Agreement) Act 2020. Under the Insolvency (Amendment) (EU Exit) Regulations 2019, the RR (renamed the Retained RR) continues to be applicable to insolvency proceedings opened prior to the end of the Transition Period. After the end of the Transition Period, UK law has retained as a basis for its jurisdiction the elements of the RR which provide for a debtor to be put into insolvency proceedings if it has its centre of main interests (COMI) in the UK or its COMI is in an EU Member State and there is an establishment in the UK. The chapter then considers the new jurisdictional tests from the RR preserved in UK law as the basis for opening insolvency proceedings in the UK. It also considers the recognition of EU proceedings in the UK under the UNCITRAL Model Law and common law rules.

The growing complexity of cross-border business transactions necessitates efficient mechanisms for resolving insolvency cases with international dimensions. This article explores the challenges and opportunities Zambia faces in aligning its insolvency framework with the UNCITRAL Model Law, a key instrument promoting harmonization in international insolvency proceedings. Using qualitative document review, this research investigates how specific sections (146-162) of Zambia’s Corporate Insolvency Act No. 9 of 2017, which address cross-border insolvency, align with the UNCITRAL Model Law. The analysis identifies areas where the Zambian Act demonstrates strengths in its approach, alongside potential weaknesses, and opportunities for improvement. The findings highlight the significance of this research for Zambia, informing policymakers on potential amendments to enhance efficiency and effectiveness in cross-border insolvency resolution. Additionally, the study offers valuable insights for other developing economies seeking to harmonize their insolvency frameworks with international best practices.

In cross‐border insolvency cases involving foreign liquidators, Hong Kong courts traditionally adhered to two criteria for recognition and assistance: the collective nature of insolvency proceedings and the commencement of such proceedings in the company's place of incorporation. This approach has evolved following Re Global Brands, marking a shift towards considering the company's COMI as a more practical criterion, and highlighting the impracticalities of using the place of incorporation as the primary criterion. Despite the benefits, the COMI Criterion introduces complexities, such as potential non‐recognition and conflicting rulings between jurisdictions. There are also questions surrounding the differences between the principle of modified universalism under common law and the UNCITRAL Model Law. This article analyses the impacts brought about by the transition to the COMI Criterion, and encourages consideration of the adoption of the Model Law by Hong Kong in the future.

The increasing use of electronic devices, new means of communication and Internet affects many areas of life, including trade and transportation. One effect is the dematerialization of bills of lading. Paper bills of lading have traditionally performed three main functions in maritime transportation: (1) as a receipt for the goods, (2) as containing or evidencing the contract of carriage of goods and (3) as a document of title. This legal research examines whether electronic bills of lading can legally perform these three functions as functional equivalents to paper bills of lading. It studies the recognition of electronic bills of lading under the current law. The research combines two approaches: the international approach and the English law approach. The international approach deals first with paper bills of lading, as a foundation for the research, since electronic bills of lading are intended to be functional equivalents to paper bills. It studies the origin, definition, types and, most importantly, functions of paper bills to be dematerialized by electronic bills, as well as the current international framework that governs paper bills of lading. This approach studies the electronic bills of lading and traces their path of evolution from first attempts until their use in the market nowadays. The international approach examines the recognition of electronic bills of lading under key instruments of relevant international convention, model laws and contract forms. The relevant international convention is the Convention on Contracts for Carriage of Goods Wholly or Partly by Sea (Rotterdam Rules). The model laws involve the study of CMI Uniform Rules for Electronic Bills of Lading 1990 and UNCITRAL Model Law on Electronic Transferable Records, 2017 (MLETR). The contract forms deal with the Bills of Lading Electronic Registry Organization (Bolero) Rulebook and Electronic Shipping Solutions (essDOCS) Databridge Services and Users Agreement (DSUA). The English law approach studies if and how the current case law and statutes recognize electronic bills of lading. It examines whether electronic bills of lading can function as legal equivalents to paper bills of lading under current English law. Some other national laws of the 3 common law system are generally addressed in relation to the recognition of electronic bills of lading, such as the laws of the United States, Australia, India and Singapore. The thesis finds that electronic bills of lading may perform the three functions under the key instruments of the international approach. However, the Rotterdam Rules are still not

Hong Kong has no statutory cross‐border insolvency regime. Hong Kong courts have to resort to common law principles in circumstances where they are requested to recognise foreign insolvency proceedings and grant assistance. The nature and scope of these principles have been the subject of extensive debate in common law jurisdictions. In Re CW Advanced Technologies Ltd [2018] HKCFI 1705, Harris J identified the uncertainties associated with the common law position in Hong Kong. These uncertainties include whether a Hong Kong court may recognise a Singapore moratorium granted to facilitate a scheme of arrangement and, if so, whether the court may grant recognition where Singapore (i.e., the foreign jurisdiction) is not the country of incorporation. Harris J also noted the ‘urgent need to enact a statutory cross‐border insolvency regime’. This article examines the scope of the common law powers in Hong Kong and seeks to clarify the possibility for members within a corporate group located outside Singapore, where the holding company has its centre of main interests in Singapore or is otherwise eligible to use the Singapore scheme regime, to obtain recognition and assistance in Hong Kong.

For centuries, jurisdictions followed the so called territoriality principle; i.e. they closed their doors to foreign administrators (and creditors as well) and did not allow their law to reach out beyond the borders of their respective jurisdictions. In the nineties, the UNCITRAL model law on trans-border insolvency was proposed. At present, it has been adopted by ten jurisdictions. A number of other jurisdictions plan to do adopt it in the future, or draft their own cross-border law based on the model. These jurisdictions represent both common law and civil law countries. Thus, it is a proper starting point for any jurisdiction to have its own cross-border insolvency law be identical to or modelled after the UNCITRAL proposal.

In this paper, the national Indian and Chinese statutes on arbitration are compared with the UNCITRAL Model Law. After a presentation of the GILD-MMC project, focus is especially on textual aspects indicating attitudes towards the relation between the administrative powers and the parties in commercial arbitration. Thus, looking at the features all-inclusiveness, information load, information spread, legislative style and transparency signifi cant differences are found and related to the different com municative purposes (overall model vs. specifi c national rules), the different legal traditions (common law vs. civil law) and the different political systems (westernised market economy vs. socialist market economy).

Journal Article Arbitration at the Dubai International Financial Centre: a Common Law Jurisdiction in the Middle East Get access Reza Mohtashami, Reza Mohtashami *Partner, Freshfields Bruckhaus Deringer LLP, Paris/Dubai; and member of the steering committee that advised the DIFC in respect of the revision of the DIFC Arbitration Law. The comments contained herein are the authors’ own and do not represent the views of the DIFC or the other members of the steering committee. Search for other works by this author on: Oxford Academic Google Scholar Sami Tannous Sami Tannous **Associate, Freshfields Bruckhaus Deringer LLP, Paris. Search for other works by this author on: Oxford Academic Google Scholar Arbitration International, Volume 25, Issue 2, 1 June 2009, Pages 173–186, https://doi.org/10.1093/arbitration/25.2.173 Published: 28 August 2014

Chapter 22: Provides an overview of cross-border considerations, in particular issues connected with the Recast EU Insolvency Regulation, the effects of Brexit, and the domestic law on cross-border recognition under the common law, section 426 of Insolvency Act 1986, the UNCITRAL Model Law and the Cross-Border Insolvency Regulations 2006.

Navigating the Common Law Approach to Cross-Border Insolvency