RE PAUL Y. CONSTRUCTION COMPANY, LTD

HCCW 10/2025

[2025] HKCFI 1109

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 10 OF 2025

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D E C I S I O N

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1.  I have before me a summons issued by Jardine Engineering Corporation, Limited (“Jardine”) for a validation order pursuant to section 182 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).

2.  The Company, Paul Y. Construction Company, Limited, is part of the Paul Y. Engineering Group Limited (“Group”), a long established Hong Kong based conglomerate specialising in construction engineering and related property services. Due to severe financial distress, the Group is facing multiple winding up petitions from creditors.

3.  On 21 February 2025 upon the Company’s application, Recorder Jin Pao SC, appointed Provisional Liquidators over the Company and a number of its associated companies.

4.  The application which I determine today relates to a construction project, entered into by the Airport Authority of Hong Kong and a joint venture consisting of three parties: (1) the Company, (2) Shenzhen CIMC Autoparking System Co., Ltd (“CIMC”) and (3) the Applicant for the validation order—Jardine. The construction project is for the construction of an automated car park at the Hong Kong Boundary Crossing Facilities (Phase 1). The contract is dated 22 October 2021.

5.  The reason the validation order is sought is to allow the two joint venture companies, CIMC and Jardine to continue to complete the contract and to receive payments from the Airport Authority made pursuant to the main contract and to make payments to sub-contractors in order to allow the completion of the project.

6.  The application is uncontroversial. No interested party has opposed. The principles that guide the court in determining application of this sort are summarised [28]-[31] of Re Hsin Chong Construction Co Ltd[1]. I am satisfied in the present case that it is in the interest of the unsecured creditors of the Company that the validation order is granted.

7.  The reason is straightforward. It is desirable that the construction contract is completed to maximise the prospects of it generating a profit for the three companies that formed the joint venture including the Company rather than the project being brought to a premature termination which is likely to result in increased liabilities and reduce the amounts that might, otherwise be available to the Company for distribution to its unsecured creditors.

8.  I will, therefore, make an order in the terms of the summons subject to some minor changes to the wording that has been agreed with counsel during the hearing.