Company Law in Hong Kong: Insolvency, 2022

 

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Company Law in Hong Kong: Insolvency, 2022
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Jan 2022
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Company Law in Hong Kong – Insolvency covers major aspects of corporate insolvency law in Hong Kong. Reform in this area of law in Hong Kong has been ongoing in recent years and there have continued to be a large number of cases handed down in the past year on winding up law.

  • The courts in recent times have developed and refined the principles on the duty of directors to take into account creditors’ interests when a company is insolvent or likely to be insolvent. Wing Hong Construction Ltd v Hui Chi Yung [2020] HKCFI 2985 is another case dealing with this duty.
  • The winding up of Hsin Chong Construction Co Ltd has spawned a number of such cases, including the Court of Final Appeal decision in  Hsin Chong Construction Co Ltd (in liq) v Build King Construction Co Ltd [2021] 4 HKC 590 (nature of a disposition) and the Court of First Instance case of Re Hsin Chong Construction Co Ltd (No.3) [2021] 1 HKLRD 582 (whether mandatory MPF contributions are to be validated by the court).
  • There has also continued to be new cases on cross-border insolvency, dealing with winding up of foreign companies (Re China Huiyuan Juice Group Ltd [2021] 1 HKLRD 255) and recognition and assistance to foreign insolvency office-holders under the common law (Re FDG Electric Vehicles Ltd [2020] 5 HKLRD 701; Re Moody Technology Holdings Ltd [2020] 2 HKLRD 187; Re China Bozza Development Holdings Ltd [2021] 4 HKC 560).
  • The past year also saw the entering into of a pilot scheme between the Supreme People’s Court (“SPC”) and the Hong Kong Government to facilitate mutual recognition of insolvency office-holders between Intermediate People’s Courts in certain designated pilot areas on the Mainland and the High Court in Hong Kong.
  • The Record of Meeting of the Supreme People’s Court and the Government of the Hong Kong Special Administrative Region on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings between the Courts of the Mainland and of the Hong Kong Special Administrative Region (14 May 2021).