RE HONG KONG LEE YUAN INTERNATIONAL GROUP LTD

HCMP 952/2024

[2024] HKCFI 1971

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 952 OF 2024

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R E A S O N S    F O R    J U D G M E N T

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1.  There is before the court an originating summons filed on 5 June 2024 (“OS”) whereby the joint and several provisional liquidators of Hong Kong Lee Yuan International Group Limited (香港李淵國際集團有限公司) (in liq) (“Company”) (who have since 14 June 2024 become liquidators of the Company (“Liquidators”)) apply for an order that a letter of request in the form annexed to the OS be issued to the Xiamen Intermediate People’s Court (“Xiamen Court”) for the purpose of seeking recognition and assistance in aid of the Company’s liquidation and the Liquidators.

2.  At the hearing, I directed the Liquidators to revise the draft letter of request to include (1) information on the extant proceedings which they have to deal with in the Mainland, and (2) the power to be given to the Liquidators in representing the Company in any further legal proceedings (including any enforcement proceedings) which the Company may bring or may be involved in the Mainland and; subject to those amendments, I made an order in the terms set out in §27 below. These are the reasons for my judgment.

3.  The application is supported by the Affirmation of Suen Fuk Yuen Bernie, who is one of the Liquidators, filed on 7 June 2024 (“Suen 1^st”).

Background facts

4.  The Company was incorporated under the Companies Ordinance (Cap. 622) on 20 July 2020[1]. Its principal activity was sourcing and trading in car parts[2].

5.  By a final judgment given by the court on 8 February 2023, the Company was ordered to pay to Minh Duc Concrete & Construction Company Limited (“Creditor”) the sum of US$1,057,314 together with interest and costs. The Company failed to pay the judgment debt[3].

6.  On 9 May 2023, the Creditor presented a winding-up petition against the Company, relying on its failure to pay the judgment debt. On 22 November 2023, the Company was ordered to be wound up by the court[4]. By virtue of s.184(2) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) (“CWUMPO”), the winding-up of the Company shall be deemed to commence on 9 May 2023.

7.  On 22 November 2023, the Officer Receiver exercised her power under s.194(1A) of CWUMPO and appoint the provisional liquidators in her place[5].

8.  On 14 June 2024, the provisional liquidators were appointed by the court as Liquidators.

9.  Upon their investigations, the Liquidators became aware that the Company held a cross-border insurance compensation from PICC Property and Casualty Company Limited Xiamen branch (廈門人保公司) (“PICC”) in the amount of RMB8,800,000 (“Insurance”) which may be realised by the Company. By letter dated 7 December 2023, the Liquidators enquired with PICC about the Insurance[6].

10.  By letter dated 26 January 2024, PICC informed the Liquidators that (1) the Company had already commenced legal proceedings in “(2023) 闽72民初97号” at the Xiamen Maritime Court (“XMC”) in respect of the Insurance; (2) PICC was ordered by XMC to pay RMB8,800,000 and interest to the Company (“XMC Judgment”); (3) the Company would need to seek recognition of the winding-up of the Company from the Xiamen Court before they may participate in the matter; and (4) PICC intended to appeal against the XMC Judgment[7].

11.  On 6 March 2024, the Liquidators obtained leave from the court to engage lawyers in the Mainland to represent them and the Company in the legal proceedings in the Mainland courts[8].

12.  In the meantime, on 5 February 2024, PICC lodged an appeal against the XMC Judgment at the Fujian Province Higher People’s Court (福建省高級人民法院) (“Fujian Court”)[9].

13.  By notice dated 4 March 2024, the Fujian Court informed the Company that it had accepted the appeal lodged by PICC, the proceedings number is “(2024) 闽民终368号” (“Appeal”) and that a court consisting of 3 judges had been appointed to deal with the Appeal[10].

14.  On 6 May 2024, the lawyer engaged by the Company filed a response (上訴答辯狀) to the Appeal[11].

15.  The Liquidators say that they require an order from the Xiamen Court to recognise the winding-up order and the winding-up proceedings of the Company in Hong Kong, and they also require specific powers to be conferred by the Xiamen Court to assist them in the discharge of their duties in particular, to participate in the Appeal and to obtain the proceeds of the XMC Judgment if the Fujian Court upholds the XMC Judgment[12].

16.  At the hearing, Ms Lydia Leung, counsel for the Liquidators, informed this Court that the Appeal had been held in abeyance pending the Liquidators’ application for recognition and assistance from the Xiamen Court.

Analysis

17.  The applicable principles governing an application for recognition and assistance of insolvency proceedings pursuant to the Cooperation Mechanism entered into on 14 May 2021 by the Supreme People’s Court and the Government of Hong Kong[13] are well established. As summarised in Re Trinity International Brands Limited [2023] HKCFI 1581, §§12-15, 18-20, and applied in Re Husk’s Green Technology Holding Co., Limited [2024] 1 HKLRD 134, §§18-27[14]. In short, the applicant needs to satisfy the court that:

(1) The application is made by a liquidator in insolvency proceedings in Hong Kong.[15]

(2) The recognition and assistance is sought from a court at a pilot area in the Mainland.[16]

(3) The order sought is for recognition of the Hong Kong liquidator’s office, and grant of assistance for discharge of his duties as such liquidator.[17]

(4) Hong Kong has been the centre of main interests (“COMI”) of the company in liquidation continuously for at least 6 months.[18] For this purpose, COMI “generally means the place of incorporation of the debtor. At the same time, the people’s court shall take into account other factors including the place of principal office, the principal place of business, the place of principal assets etc. of the debtor.”[19]

(5) The company’s principal assets in the Mainland are in a pilot area, or it has a place of business or a representative office in a pilot area.[20]

(6) The recognition and assistance sought is necessary to enable the liquidators to carry out their functions as liquidators of the company in the Mainland.[21]

18.  In the present case, each of the above requirements above is satisfied.

19.  First, the application is made by the Liquidators of the Company. The Company has been in compulsory liquidation since 9 May 2023.

20.  Second, the recognition and assistance are sought from the Xiamen Court, which is a court at a pilot area.

21.  Third, the order sought is for recognition of the Liquidators’ office, and grant of assistance for the discharge of their duties as liquidators of the Company in the Mainland.

22.  Fourth, Hong Kong has been the COMI of the Company for more than 6 months in that it was incorporated in Hong Kong and carried on its business in Hong Kong. The liquidation of the Company has since November 2023 been conducted in Hong Kong.

23.  Fifth, the Company’s most valuable asset is the amount payable under the Insurance (as confirmed by the XMC Judgment), which is located in Xiamen.

24.  Sixth, it is necessary for the Liquidators to seek recognition and assistance to carry out their functions as liquidators of the Company in the Mainland, given the stance taken by PICC and the need for the Company to deal with the Appeal and any further proceedings which may be commenced in the Mainland.

25.  The powers of assistance sought by the Liquidators, as stated in the revised letter of request and approved by this Court (“Letter of Request”), are the powers conferred on and exercisable by the Liquidators under the CWUMPO. The Letter of Request is at Annex A hereto.

26.  A table summarising the powers stated in the Letter of Request and the corresponding provisions under the CWUMPO are set out in Annex B hereto. The powers are materially identical to those set out in appendices to the judgments in Re Trinity and Re PPLive Sports.

Order

27.  For the reasons set out above, it is appropriate for the court to make the following order:

(1) The Letter of Request in the form of Annex A be issued to the Xiamen Intermediate People’s Court seeking recognition and assistance in aid of the Company’s liquidation and the Liquidators;

(2) The Liquidators’ costs, subject to taxation, be paid out of the assets of the Company; and

(3) Liberty to apply.

28.  In line with the usual practice of dealing with applications made under the Cooperation Mechanism, the court will provide a certified translation of this Judgment in simplified Chinese to the applicants shortly after it is handed down. In the meantime, the solicitors for the Liquidators should provide (1) a copy of the Judgment; (2) a copy of the Letter of Request (with the same title as the Judgment); and (3) a sealed copy of the order made by the court to the Registrar for his consideration and signature. The signed Letter of Request will be returned to the solicitors as the application for recognition and assistance will have to be made by the Liquidators to the Xiamen Court.

Annex A

HCMP 952/2024

香港特别行政区

高等法院

原讼法庭

高院杂项案件2024年第952号

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根据认可和协助香港特别行政区破产程序试点方案发出的

司法协助请求函

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鉴于：

1. 本法庭依据香港特别行政区（“香港”）的法律对香港公司的破产清盘具有司法管辖权。

2. 香港李渊国际集团有限公司（“该公司”），是一家于2020年7月20日根据香港法律注册成立的公司。该公司在香港从事有关业务已有3年多。

3. 本法庭于2023年2月8日作出最终判决，判令该公司应向原告人，Minh Duc Concrete & Construction Company Limited支付1,057,314.00美元及该款项按美国最优惠利率加1%的利率自2021年10月15日计算至2023年2月8日的利息及法律费用共675,330.00港元。

4. 因该公司未能履行判决债务，本法庭于 2023 年 11 月 22 日根据案件编号 HCCW 206/2023 对该公司发出清盘令，命令对公司进行清盘。

5. 香港破产管理署于2023年11月22日根据第32章《公司（清盘及杂项条文）条例》第194 （1A）条委任孙福源先生和张鹤骞先生两人担任该公司的共同及个别临时清盘人（“临时清盘人”）。

6. 香港原讼法庭于2024年6月14日经考虑临时清盘人的报告而确认委任孙先生和张先生两人担任该公司的共同及个别清盘人（“清盘人”）。

7. 根据香港法律（包括第32章《公司 (清盘及杂项条文) 条例》第197、199（2）和（3）及286B条），清盘人已获授权共同及个别地作出（除其他外的）以下行为：

(1) 将该公司有权享有或看似有权享有的所有财产及据法权产，收归该清盘人保管或控制（第197条）；

(2) 藉公开拍卖或私人合约，出售该公司的土地财产、非土地财产及据法权产，并有权将该等财产及权产全盘转让予任何人或任何公司，或将它们分拆出售（附表25第3部 第1项）；

(3) 以该公司名义和代表该公司作出所有作为及签立所有契据、收据及其他文件，并可为该目的而在有需要时，使用该公司印章（附表25 第3 部 第2项）；

(4) 以该公司名义和代表该公司提起任何诉讼或其他法律程序，或以该公司名义和代表该公司在任何诉讼或其他法律程序中答辩（附表25 第2 部 第1项）；

(5) 调查该公司失败的因由及其在交易及事务中就此作出的处理；及（第286B條）

(6) 作出为结束该公司事务及派发该公司资产而需要作出的所有其他事情（附表25第3部 第9项）。

8. 清盘人认为，鉴于以下事实，若要根据香港法律有效及适当地行使清盘人的权利，需要厦门市中级人民法院认可清盘人的的委任：

(1) 清盘人于2023年11月23日及2023年12月7日分别寄出信函通知及要求该公司现任唯一董事及唯一股东李诗陈配合相关清盘程序。但清盘人截至现今皆没有收到任何回复及进展；

(2) 清盘人相信该公司的唯一董事及唯一股东李诗陈目前在内地；及

(3) 该公司在内地的资产包括：厦门海事法院于2024年1月12日作出 “(2023) 闽72民初97号民事” 判决书，判令中国人民财产保险股份有限公司厦门市分公司（“厦门人保公司”） 向该公司支付保险赔款人民币880万元, 利息及法律费用。厦门人保公司对一审民事判决不服并，于2024年2月5日向福建省高级人民法院提出上诉。福建省高级人民法院已于2024年3月4日作出合议庭组成人员通知书，受理上诉，上诉案号为“（2024）闽民终368号”（“该上诉”）。被上诉人，即清盘人代表该公司，已于2024年5月6日呈上上诉答辩状。福建省高级人民法院已将该上诉押后，直至本请求函之作出。

9. 由于该公司在内地的主要资产是厦门人保公司的赔款，清盘人认为为了有效地行使其在香港法例下的权利，须由福建省厦门市中级人民法认可对他们的委任。

10. 因此，清盘人认为，根据香港法律，向福建省厦门市中级人民法院寻求济助属适当行为，以便（特别及最重要的是）该法庭能认可清盘程序及清盘人及其权力从而允许他们：

(1) 依法代表该公司参与到内地诉讼并从厦门人保公司处接收该保险赔款；

(2) 保护该公司司所享有的财产不被非法转移，以此维护该公司及其债权人的合法权益；

(3) 找到、保护、取得及管有和控制该公司有权或看似有权在中华人民共和国（“中国”）内地法院管辖权内拥有的一切资产和财产；

(4) 找到、保护、取得及管有和控制该公司在中国内地法院管辖区内的账簿、文件和记录，包括会计和法定记录；

(5) 调查该公司的事务，并在可能必要的范围内针对任何笫三方或与该公司有关联的任何一方，向中国内地法院提起法律程序和作出一切申请，当中不论是以其自身名义或以该公司名义；及

(6) 以该公司名义和代表该公司提起或參與任何诉讼或其他法律程序，包括于福建省高级人民法院就该上诉处理一切程序，或参与其他后续执行程序，或以该公司名义和代表该公司在任何诉讼或其他法律程序中答辩。

11. 本案所提供的证据证明并令本法庭信纳，在清盘人认为适当的范围内，向福建省高级人民法院提出协助请求符合正义及法律规定。为使清盘人能够履行其职责，谨请福建省厦门市中级人民法院协助本法庭，授权清盘人根据适用的内地法律在内地行使香港法律赋予他们的所有权力、职责和酌情权。

12. 本法庭谨请福建省厦门市中级人民法院为该公司的清盘程序及清盘人提供协助，签发裁定并指示：

(1) 该公司的清盘程序及清盘人的委任均得福建省廈門市中級人民法院的认可；及

(2) 清盘人拥有并可行使香港法律赋予他们的权力（如上文第7段及第10段所载），并可在内地法律允许的最大范围内行使。

13. 本法庭确认，已根据香港的程序和法律发出本请求函及作出相关申请。

14. 为免产生疑问，寻求该协助旨在获得与本法庭因该公司资产专属于本法庭的管辖范围内所授予的济助大致相符的济助。

15. 本法庭进一步确认，香港法院将在类似情况下，并在行使其固有管辖权时，认可建省廈門市中級人民法院的请求函，并就该请求函提供可能需要的协助（受香港法律的适用限制约束）。

日期：2024年 月 日

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邝卓宏

香港特别行政区

高等法院司法常务官

HCMP 952/2024

香港特别行政区

高等法院

原讼法庭

高院杂项案件2024年第952号

_______________

_________________

_________________

______________________________________________

根据认可和协助香港特别行政区破产程序

试点方案发出的司法协助请求函

________________________________________

Annex B