Re CHINA TLANJIN INTERNATIONAL ECONOMIC AND TECHNICAL COOPERATIVE CORPORATION

IN THE SUPREME COURT OF HONG KONG

COMPANIES (WINDING-UP) NO. 438 OF 1994

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J U D G M E N T

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1. This is a winding-up Petition which was presented on the l9th September 1994 by Zoneheath Associates Ltd., a United Kingdom Company, and it is presented against China Tianjin Intemational Economic & Technical Cooperative Corporation. That entity will hereinafter be referred to as "CTIETCC". That is a company which, as is set out in paragraph 2 of the Petition, was established pursuant to an Order of the Ministry of Foreign Trade and Economic Cooperation and the People's Government of the Municipality of Tianjin in 1986. It is therefore a foreign company. It is sought to wind it up as an insolvent company by reason of its inability to pay a debt which is owed to the Petitioner, that having been established by a default judgment in the Queen's Bench Division in England in 1992. The judgment was subsequently registered in Hong Kong.

2. The mechanism by which the winding-up is sought is Section 327 of the Companies Ordinance which refers to winding-up of an unregistered company. By reason of Section 326, it is clear that a foreign company can be regarded as an unregistered company and therefore susceptible to winding-up under the provisions of the Companies Ordinance. Here no question arises as to the indebtedness. I have been taken through the authorities however relating to the winding-up of a foreign company.

3. The major authority is clearly that of In re a company 1988 1 Ch. 210. In that case, Peter Gibbson J. went through the previous decisions relating to winding-up of a foreign company and examined the principles that lie behind them. He established that the jurisdiction to wind-up a foreign company is flexible. What is important is that there is a sufficiently close connection with the jurisdiction and that there is a reasonable possibility of benefit for the creditors from the winding-up. Knox J. in Re Real Estate Development Co. added to that the Court must be able to exercise jurisdiction over one or more persons interested in the distribution of the company's assets.

4. It has been sufficiently established in the Petition and in the supporting evidence that the company has one share in a company incorporated in Hong Kong by the name of Tsinlien Economic Cooperation Co. Ltd. There is a suggestion in some of the correspondence that the share may be held on trust for another entity. In my view, in respect of this item alone, the Court should proceed on the basis that CTIETCC does own the share unless and until it is established to the contrary. Furthermore, the objects of CTIETCC have been set out in the statute which has been exhibited to the main affidavit. They show that CTIETCC has a wide range of interests including interests which will entail it carrying on business overseas and having assets overseas.

5. According to some of the materials which it has published and have been set out in paragraph 12A of the amended Petition, CTIETCC also claimed to have set up its own office or offices in Hong Kong. Furthermore it claims to have information networks covering all major areas of the world, and has also established in "more than 20 countries and regions (including Hong Kong) over 20 joint-ventures, cooperative business operations and enterprises with exclusive Chinese investment, 10 of which have gone into operation and generated "encouraging" economic results".

6. In my view, this gives rise to the prima facie presumption that the company does indeed have assets here and, indeed, the same must be true of a number of other countries and jurisdictions. Hence there must, in my view, be a reasonable prospect of there being substantial assets which are liable to be recovered should a winding-up Order be made. I am satisfied that in these

circumstances the company is insolvent within the terms of the Companies Ordinance and that there is sufficient ground and basis for making a windingup Order in this case.

7. I would mention that it has also been ventilated in argument that there is clearly a possibility that, if a winding-up Order is made, some settlement of the underlying dispute which gave rise to the default judgment in the United Kingdom may take place. Without further argument I would not make that a sole ground upon which I would hold a substantial interest to exist. Nevertheless, it is a factor which I believe the Court could and should in the appropriate circumstances take into consideration in exercising its discretion to order a winding-up.

8. In those circumstances, I have already given leave to amend the Petition to add paragraph 12A. I make the usual compulsory winding-up order on the undertaking of the Petitioner to file the amended Petition as soon as possible together with a verifying affidavit and I dispense with service of the amended Petition.