RE JOINT AND SEVERAL PROVISIONAL LIQUIDATORS OF RZ3262019 LTD (IN PROVISIONAL LIQUIDATION IN THE BRITISH VIRGIN ISLANDS)

HCMP 1775/2022

[2022] HKCFI 3602

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1775 OF 2022

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D E C I S I O N

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1.  The company is incorporated in the British Virgin Islands (“BVI”). On 13 July 2022 the court in the British Virgin Islands appointed joint and several provisional liquidators (“JPLs”) over the Company. Having obtain a letter of request the JPLs issued on 31 October 2022, an ex parte originating summons seeking a recognition and assistance order. For present purposes the JPLs accept that the company’s center of main interests (“COMI”) is not in the BVI. It seems likely that it is in the Mainland. As a consequence, and for the reasons explained in my decision in Re Global Brands Group Holding Limited[1], the JPLs’ appointment is not one in respect of which the Hong Kong court will generally grant the recognition and assistance which it will grant to the provisional liquidators or liquidators of a company subject to an insolvency process in a company’s COMI. However, for the reason also explained in Global Brands, some recognition can be justified by reference to established principles of Private International Law. I am satisfied that an order providing a degree of recognition and assistance can be justified in the present case on that ground.

2.  After consideration with Mr Ho who appeared for the JPLs, I have made an order in the following terms:

“1. Mr Ryan Jarvis of Deloitte Limited, Wickhams Cay 1, P.O. Box 3083, Road Town, Tortola, VG-1110, British Virgin Islands and Mr Choi Tze Kit, Sammy of T.K. Choi & Co. at Room 202, Shiu Fung Hong Building, 239-241 Wing Lok Street, Sheung Wan, Hong Kong, as Joint Provisional Liquidators of the Company ("Authorized Agents"), be recognized by this Court;

2. The Authorized Agents have and may exercise in the Hong Kong Special Administrative Region the following powers:

(a) to request and receive from third parties documents and information concerning the Company;

(b) to locate, protect, secure and take into their possession and control all assets and property within the jurisdiction of this Court to which the Company is or appears to be entitled;

(c) to locate, protect, secure and take into their possession and control the books, papers, and records of the Company including the accountancy and statutory records within the jurisdiction of this Court and to investigate the assets and affairs of the Company. The books, records and documents of the Company include:

(i) Emails exchanged and other correspondence between the Company and its auditors, and the Company and other third parties; and

(ii) Documents and information provided by the Company to its auditors and provided by the auditors to the Company in relation to the audit work;

(d) to bring legal proceedings and make applications to this Court, whether in his own name or in the name of the Company.

(e) to retain and employ barristers, solicitors or attorneys, accountants and/or such other agents or professional persons as the Authorized Agents consider appropriate for the purpose of advising or assisting in the execution of their powers and duties under this Order

3. Anything that is authorised or required to be done by the Authorized Agents is to be done by all or anyone of them;

4. There be general liberty to apply; and

5. The costs of this application be paid out of the assets of the Company as an expense of the provisional liquidation.”

3.  The language has been crafted in order to reflect the basis upon which recognition and assistance has been granted.   In short what the order is providing, and telling third parties who read it, is that the JPLs are the duly authorized agents of the Company entitled to take action on its behalf or cause the Company itself to instigate action, in order to advance or protect the Company’s interests.  In simple practical terms, it is easiest perhaps to understand the distinction that the order seeks to draw as  between (a) the way this order is framed and (b) the form of order the court will commonly grant to foreign insolvency officers appointed in a company’s COMI, by thinking of the order in the present case as confirming that to the extent ordered by the BVI court, the JPLs have stepped into the shoes of the directors of the Company.