Vol 20 (2023) - Issue 1

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COMI as First Port of Call? Harris J Lays out a Modified Common Law Framework for Recognising Foreign Insolvency Proceedings in Hong Kong

Synopsis
Historically, the Hong Kong courts have generally recognised foreign insolvency proceedings commenced in the jurisdiction in which the company is incorporated.
This may no longer be the case in Hong Kong following the recent decision of Provisional Liquidator of Global Brands Group Holding Ltd v Computershare Hong Kong Trustees Ltd [2022] HKCFI 1789 (Global Brands).
In the Global Brands decision Justice Harris has suggested that in future a Hong Kong court will now recognise foreign insolvency proceedings in the jurisdiction of the company's 'centre of main interests' (COMI).
Indeed, it is suggested that it will not be sufficient, nor will it be necessary, that the foreign insolvency process is conducted in a company's place of incorporation.
Much of the discussion in the case appears to have been obiter dictum, as Global Brands Group Holdings Limited (the Company) was incorporated and being wound up in Bermuda, and therefore recognition of the Bermudan proceedings aligned with the traditional common law basis for recognition based on the jurisdiction of incorporation.
However, the decision nevertheless indicates judicial support for a significant shift in Hong Kong's common law recognition regime. The approach to common law recognition suggested by Harris J is substantially similar to that taken by the Singapore Court in Re OptiMedix Ltd (in liquidation) [2016] SGHC 108 (which we discussed in a recent blog). It also aligns with the global trend of embracing a COMI-based approach to recognition, including in the UNCITRAL Model Law on Cross-Border Insolvency which has now been incorporated into domestic legislation of many countries around the world.