Hong Kong’s Inaugural Letter of Request to Mainland Court for Cross-Border Insolvency Assistance in Re Samson Paper Co Ltd

10 August 2021

In Re Samson Paper Co Ltd [2021] HKCFI 2151, the Hong Kong Court issued for the first time a letter of request to the Shenzhen Bankruptcy Court requesting the latter to recognise and assist Hong Kong liquidators.

This decision marks the first practical step towards implementing The Supreme People’s Court’s Opinion on Taking Forward a Pilot Measure in relation to the Recognition of and Assistance to Insolvency Proceedings in the Hong Kong Special Administrative Region (“Pilot Measure”).

The facts and decision in brief

Samson Paper Company Limited (“Company”) was incorporated in Hong Kong and went into Hong Kong creditors’ voluntary liquidation in August 2021.

The Company had assets in the Mainland, including a wholly-owned subsidiary in Shenzhen, a wholly-owned subsidiary in Shanghai, receivables due from affiliated companies incorporated in the Mainland, and an apartment in Beijing.

As the Company’s liquidators had to take possession of the Company’s Mainland assets in order to perform the duties, they sought to rely on the Pilot Measure and applied for a letter of request to be issued to the Shenzhen Bankruptcy Court so that the liquidators could be given the relevant judicial assistance in the Mainland.

Mr Justice Harris approved the liquidators’ application and duly issued a letter of request. His Lordship found that the Company’s centre of main interests was in Hong Kong and the circumstances warranted assistance to be considered by the Shenzhen Bankruptcy Court under the Pilot Measure.

Commentary

This decision marks another welcome and important development in cross-border insolvency cooperation between Hong Kong and the Mainland.

Just less than two years ago, Mr Justice Harris recognised and assisted Mainland liquidators for the first time: Re CEFC Shanghai International Group Ltd [2020] HKCFI 167; [2020] HKCLC 1.

In May 2021, the Pilot Measure came into effect.

Now, hot on the heels of the Pilot Measure, Mr Justice Harris used the Pilot Measure to request the Mainland court to recognise and assist Hong Kong liquidators.

The success of the Pilot Measure will need further judicial pragmatism in Hong Kong and the Mainland, which will in turn spur further cross-border insolvency cooperation between Hong Kong and the Mainland.

Look-Chan Ho acted for the liquidators in this case.

A Chinese translation of the decision in Re Samson Paper Co Ltd [2021] HKCFI 2151 is available here.

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