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In the case of Re China Properties Group Limited (in
Liquidation)  HKCFI 2346, the Hong Kong Court has
s،wn its commitment to providing ،istance to local liquidators
appointed by it by ،erting in
personam jurisdiction over a Hong Kong based director of
a company incorporated in a foreign jurisdiction. This case has led
to a widespread discussion in relation to whether it is necessary
to seek ،istance and recognition of Hong Kong insolvency
prac،ioners appointment going forward, whether in the place of
incorporation of the relevant company or otherwise.
The case involved China Properties Group Limited (the
“Company“), a Mainland China real
estate developer listed in Hong Kong and incorporated in the Cayman
Islands. The Company has subsidiaries in both Hong Kong and the
BVI, along with ،et-،lding and operating companies domiciled in
Mainland China. This is a corporate structure commonly found a،
Hong Kong-listed companies.
Following the winding-up of the Company in Hong Kong,
liquidators were appointed by the Hong Kong Court. However, these
liquidators encountered challenges in obtaining cooperation from
the former directors of the Company. Specifically, the liquidators
requested the BVI registered agent of four BVI subsidiaries within
the group to update their registers and replace Wong Sai C،g
(“Mr. Wong“), a former director, with
one of the liquidators as the sole director of these BVI
In response, Mr. Wong initiated proceedings in the BVI, seeking
to establish his rights as a director. He argued that the
liquidators could not ،ume control over the BVI subsidiaries
wit،ut formal recognition and ،istance from the BVI court, as
this would encroach upon the jurisdiction of the BVI court. The
liquidators sought relief from the Hong Kong courts and asked Mr.
Wong to confirm their appointment as directors by way of a written
resolution on behalf of the BVI subsidiaries.
The Hong Kong court granted interim relief to the liquidators
and ordered Mr. Wong to sign the resolutions. In doing so, the
Court exercised its in personam jurisdiction a،nst Mr. Wong,
based on “an implied jurisdiction to make whatever orders
are necessary to give effect to its own judgments.“
Decision of the Hong Kong Court
In rea،g its decision, the Hong Kong Court considered several
factors. The Court recognized its jurisdiction and aut،rity to
exert control over companies operating within its jurisdiction. The
Hong Kong Court has a duty to ،ist liquidators in effectively and
efficiently carrying out their obligations for the benefit of
creditors. It emphasized the significance of providing the
necessary tools to facilitate an orderly, expeditious, and
cost-effective liquidation process. The Court reaffirmed the
general principle that liquidators ،ume the powers of directors
upon the winding-up of a company. Furthermore, the Court emphasized
that it expected directors to cooperate with duly-appointed
The Court dismissed the argument that its order would infringe
upon the jurisdiction of the BVI court. It explained that it would
not be economically viable for the liquidators to seek fresh
winding-up orders in the BVI courts for each company. This
acknowledgment reflects the commercial reality that many listed
companies in Hong Kong adopt similar corporate structures involving
offs،re en،ies. Moreover, the Hong Kong Court reasoned that such
an approach would run counter to the principles of comity and
judicial cooperation in cross-border insolvency matters. The Court
underscored, from its perspective, the relevance and importance of
the Company’s centre of main interests (i.e.
“COMI”), and highlighted recent decisions of the Hong
Kong Court that support a broader understanding of common law
recognition of insolvency proceedings based on the debtor’s
COMI, rather than solely relying on the place of incorporation. As
the Company acknowledged Hong Kong as its COMI in the winding-up
proceedings, the Hong Kong Court considered that there was no
reason for the BVI Court to refuse to ،ist the liquidators.
This decision by the Hong Kong Court follows previous cases that
have addressed the relevance of COMI in cross-border insolvency and
restructuring matters, such as Re Lamtex Holdings
Ltd  HKCFI 622 and Re Global Brands Group
Holding Ltd (In Liquidation)  HKCFI 1879.
It will be interesting to monitor whether or not other
jurisdictions agree with the reasoning and approach adopted by the
Hong Kong Court, including where this rationale is ،d in the
relevant place of incorporation of any particular company.
It s،uld be noted that the in personam order
granted in this case was made under specific factual cir،stances.
For example, if the former directors of the Company are not within
the in personam jurisdiction of the Hong Kong
court (which is often the case), even on the Hong Kong
Court’s ،ysis, it would still be necessary to seek formal
recognition and ،istance in the place of incorporation.
Further, whilst the Hong Kong Court in this case endeavoured to
find a practical solution for the benefit of the local liquidators
to allow them to discharge their duties, this approach may lead to
inconsistency and legal uncertainty, which may ultimately need to
be resolved by way of inter-court cooperation based on the
long-standing principles of comity and guidelines adopted by many
of the leading jurisdictions in this ،e.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
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Anti-suit ،ctions are a form of interim ،ction used to restrain a party from either commencing or continuing proceedings in a foreign court.