RE JOINT OFFICIAL LIQUIDATORS OF CENTAUR LITIGATION SPC (In Liquidation)

HCMP 3389/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3389 OF 2015

____________________

____________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3391 OF 2015

____________________

____________________

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3393 OF 2015

____________________

____________________

(HEARD TOGETHER)

________________

D E C I S I O N

________________

1.  I have before me an ex parte application for recognition and assistance by the Joint Official Liquidators (“Liquidators”) of three companies each of which is incorporated in the Cayman Islands and which has been put into liquidation there. The applications are made pursuant to letter of request issued by Madame Justice Mangatal of the Grand Court of the Cayman Islands.

2.  A similar application has successfully been made to Mr Justice Norris in respect of Centaur Litigation SPC in London.

3.  Applications of this sort have become increasingly common since my decision in The Joint Official Liquidators of Company A Co[1] which recognises that the Hong Kong High Court has the power to recognise foreign liquidators and provide assistance to them in order that they can carry out their functions.  Recently the Privy Council in Singularis Holdings Ltd v PricewaterhouseCooper[2] have confirmed this and explained comprehensively the applicable common law principles.  In the present case the Liquidators seek a more extensive order than, as far as I am aware, has to date been granted in Hong Kong.  I set out the precise terms of the order sought in the Appendix to this decision.  The order granted by Mr Justice Norris was in these terms.

4.  The one paragraph of the order which I considered when I heard the application required some thought, the remainder of the order seeming to me to be uncontroversial, was para 4.  This requires any person wishing to commence proceedings in Hong Kong against any of the companies to obtain first the court’s leave.  This is consistent with section 182 of the Companies(Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, which provides:

“In a winding up by the court, any disposition of the property of the company, including things in action, and any transfer of shares, or alteration in the status of the members of the company, made after the commencement of the winding up, shall, unless the court otherwise orders, be void.”

5.  Para 4 seeks to establish the position, which currently exists in the Cayman Islands pursuant to section 97 of the Companies Law, which is in substantially the same terms as section 182. It follows that making an order in the terms of para 4 will extend to Hong Kong a control which exists in the Cayman Islands to assist in the orderly and cost effective liquidation of the Companies and which is consistent with our own regime.  In principle, therefore, there is nothing objectionable in granting such an order.

6.  My initial concern was that it might operate unfairly in Hong Kong in respect of creditors, who would not be aware of the order and might incur the costs of commencing proceedings only to find, through no fault of themselves or their legal advisers, that the proceedings were subject effectively to an automatic stay.  If the Companies had been wound up in Hong Kong that risk would be reduced because a prudent litigation solicitor before commencing proceedings could check whether any of the Companies were subject to a winding‑up order. 

7.  It seems to me that on balance it is better to grant such an order.  Presumably any properly advised and prudent creditor thinking of commencing proceedings would investigate the current position of the Companies, which would lead to discovery that the Companies are in liquidation in the Cayman Islands and contact with the Liquidators, which would reveal the restriction on commencing proceedings and allow an informed consideration by the creditor, of how best to proceed.

8.  I will, therefore, grant an order in the terms of the Appendix.

Appendix

1. The appointment of Hugh Dickson of Grant Thornton Specialist Services (Cayman) Limited, Said Jahani of Grant Thornton Australia Limited, and David Bennett of Grant Thornton Recovery & Reorganisation Limited as Joint Official Liquidators (the “Liquidators”) of Centaur Litigation SPC (In Liquidation) (the “Company”) be recognised by this Court.

2. The Liquidators have and may exercise such powers as are available to them as a matter of Cayman Islands law and would be available to them under the laws of Hong Kong as if they had been appointed liquidators of the Company under the laws of Hong Kong and in particular, but without prejudice to the generality of the foregoing, for the following purposes:

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

2.2 to locate, protect, secure and take into their possession and control the books, papers and records of the Company including the accounting and statutory records within the jurisdiction of this Court and to continue their investigations into the assets and affairs of the Company and the circumstances which gave rise to its insolvency;

2.3 to retain and employ barristers, solicitors or attorneys and/or such other agents or professional persons as the Liquidators consider appropriate for the purpose of advising or assisting in the execution of their powers and duties; and

2.4 so far as may be necessary to supplement and to effect the powers set out at paragraphs 2.1 and 2.2 above, to bring legal proceedings and make all such applications to this Court, whether in their own names or in the name of the Company, on behalf of or for the benefit of the Company including any applications for ancillary relief such as freezing orders, search and seizure orders in any legal proceedings commenced, and/or for orders for disclosure, the production of documents and/or examination of third parties which it is anticipated may be made by the Liquidators to facilitate their ongoing investigations into the assets and affairs of the Company and the circumstances which gave rise to its insolvency.

3. Anything that is authorized or required to be done by the Liquidators is to be done by all or anyone or more of the persons appointed.

4. For so long as the Company remains in Liquidation in the Cayman Islands, no action or proceeding shall be proceeded with or commenced against the Company or its assets or affairs, or their property within the jurisdiction of this Court, except with leave of this Court and subject to such terms as this Court may impose.

5. The Liquidators do have liberty to apply.

6. The costs of the application be paid out of the assets of the Company as an expense of the liquidation.