Continuing Clyde & Co’s analysis of the legal position in various jurisdictions worldwide as a result of the bankruptcy protection application of Hanjin at the end of August, today we look at Hong Kong.
Currently it remains to be seen whether the Hong Kong Courts will recognise the Korean rehabilitation proceedings for Hanjin.
Hong Kong has not adopted into domestic legislation the UNCITRAL Model Law on Cross Border Insolvency. Unlike jurisdictions (including the UK) which have adopted the Model Law, an application to the Hong Kong Courts for recognition of foreign insolvency proceedings requires a balancing exercise of competing aims: assisting the foreign court conducting the main insolvency proceedings in achieving a universal distribution of assets, and ensuring that creditors seeking the Hong Kong Courts’ assistance are treated fairly and equitably in enforcing their rights.
There have been cases in which Hong Kong Courts have recognised foreign rehabilitation/ liquidation proceedings, however it remains to be seen whether the Hong Kong Courts will recognise the Korean proceedings.