The United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-border Insolvency is not formally recognised in Hong Kong, unlike in Singapore which adopted it last year.(1) There are no statutory provisions empowering the Hong Kong courts to provide assistance and recognition to foreign insolvency office holders. The courts therefore rely on their inherent power (where appropriate) under the common law principle of modified universalism to provide such assistance.(2) Although the application of this principle is not without its problems, the courts in recent years have shown some willingness to assist the effective implementation of cross-border insolvency and restructuring regimes.(3) This has given rise to an interesting development of common law recognition and assistance in Hong Kong.

Some difficulties were recently illustrated in Re CW Advanced Technologies Limited(4) – a case in which the companies judge, for the first time, considered the possibility of recognising and giving assistance in support of the new Singapore insolvency regime in Hong Kong proceedings.(5)

Recent case

CW Advanced Technologies Limited ('the company') is a Hong Kong company and part of the CW Group (CWG), which is a precision engineering solution provider. CWG's headquarters and principal place of business are in Singapore.

CWG's holding company is:

  • incorporated in the Cayman Islands;
  • managed from Singapore;
  • listed on the Hong Kong Stock Exchange; and
  • registered in Hong Kong as a non-Hong Kong company.

In early 2018 CWG appears to have encountered some financial difficulties. In particular, it was unable to refinance its bond debts and bank loans. CWG's management proposed to address the group's difficulties via a debt restructuring in Singapore, with judicial recognition and assistance to be provided by the other jurisdictions in which CWG group members were located.

In June 2018 four companies within CWG (including the holding company and the company) applied to the Singapore court for a six-month moratorium, pursuant to the Singapore Act, in order to facilitate the proposed restructuring ('the Singapore moratorium').(6) This was immediately followed by the company lodging an ex parte application for the appointment of provisional liquidators in Hong Kong.

For unknown reasons, CWG did not consult its largest creditor, the Bank of China, on its restructuring plan. The bank did not oppose the company's Hong Kong provisional liquidation application but asked the court to appoint different individuals as provisional liquidators.

When the company's ex parte application came before the court, the judge adjourned it – partly because he was of the view that the application raised certain critical issues concerning the impact of the Singapore moratorium in Hong Kong, which were also the subject of conflicting comparative authorities elsewhere. The judge requested that the bank's and the company's legal representatives address the court on the critical issues at an inter partes hearing, together with amicus assistance from the official receiver.

Before the inter partes hearing, CWG – in consultation with another creditor – applied for provisional liquidation in the Cayman Islands and the company withdrew its provisional liquidation application in Hong Kong. The bank then made its own application for the company's provisional liquidation in Hong Kong (without the requirement for any debt restructuring).

Court's obiter comments

The judge granted the bank's application because the company was plainly insolvent and the evidence produced by the bank was not contested.

Owing to the fact that the company withdrew its application at the last minute, the court did not have to decide the critical issues. The judge nonetheless took the opportunity to outline the critical issues for future applicants to consider when faced with similar circumstances – namely:(7)

  • whether the Singapore moratorium was a foreign collective insolvency proceeding for the purpose of recognition pursuant to common law principles;
  • if it was a foreign collective insolvency proceeding, whether the court should recognise such proceeding emanating from a jurisdiction which was not the jurisdiction of incorporation; and
  • if both the above questions were answered in the affirmative, whether the court could grant assistance by appointing provisional liquidators in Hong Kong.

Given the withdrawal of the company's application for provisional liquidators, the determination of these critical issues was to be reserved "for another day".(8) However, the judge remarked that CWG's proposed restructuring could "conceivably" be achieved through parallel schemes of arrangement in Hong Kong and the Cayman Islands, coupled with an application for recognition and assistance in Singapore.(9) Importantly, the UNCITRAL Model Law incorporated into the Singapore Act has no requirement of reciprocity with the jurisdiction in which the foreign proceedings are based.(10)


Although the majority part of the decision is obiter, this case is nonetheless interesting and important in many respects for insolvency practitioners in Hong Kong.

First, it serves as a reminder of the need for careful planning and communication in cross-border insolvency proceedings.(11) It is (on the face of it) surprising that the management of CWG did not consult with the bank – its largest creditor – on the restructuring plan before applying for the Singapore moratorium. One would imagine that any restructuring plan put forward by a company would require the approval of its largest creditor.

Second, the list of critical issues identified by the judge is perhaps a step closer to determining whether a foreign debtor-in-possession restructuring or rehabilitation process (eg, the Singapore moratorium or US Chapter 11 protection) is capable of being recognised in Hong Kong.

Third, until things become clearer, the judge has suggested an alternative solution for parties seeking to conduct restructuring of a group of companies that have a nexus in Singapore and Hong Kong. This reaffirms the courts' pragmatic approach to assisting with the effective implementation of cross-border insolvency.

Finally, as noted by the judge in the final paragraph of his judgment and discussed by lawmakers since 1998,(12) the case underscores the need for statutory reform of Hong Kong's approach to cross-border insolvency in order to harmonise the law with the jurisdictions of other global financial centres.

For further information on this topic please contact Sumarsono Darsono or David Smyth at RPC by telephone (+852 2216 7000) or email ( or The RPC website can be accessed at


(1) The UNCITRAL Model Law was incorporated into the Singapore Companies (Amendment) Act 2017, which came into force on 23 May 2017 ('the Singapore Act').

(2) 'Modified universalism' refers to (among other things) the principle that a court has common law power to recognise and grant assistance to foreign insolvency proceedings so far as it properly can – see Cambridge Gas v Navigator [2007] 1 AC 508.

(3) For further details please see "Modified universalism – privy to singular clarification?".

(4) [2018] HKCFI 1705.

(5) The Singapore Act incorporates several features of Chapter 11 of the US Bankruptcy Code, including super-priority rescue (debtor-in-possession) financing, cram-down powers and pre-packaged restructuring plans.

(6) On the filing of an application for the Singapore moratorium, an automatic 30-day interim moratorium comes into effect or until the application is decided by the Singapore court, whichever is earlier. Supra note 4, at Paragraph 16.

(7) Supra note 4, at Paragraph 32.

(8) Supra note 4, at Paragraph 33.

(9) Supra note 8.

(10) By default, there is no requirement of reciprocity in the UNCITRAL Model Law. Some jurisdictions, when enacting legislation based thereon, have included reciprocity provisions in relation to recognition. Singapore is not one of them.

(11) Supra note 4, at Paragraph 34.

(12) See Paragraphs 21.32 to 21.34 of "The Consultation Paper on the Winding-Up Provisions of the Companies Ordinance", published in April 1998. The Sub-committee on Insolvency of the Law Reform Commission briefly discussed the UNCITRAL Model Law and referred to its draft form in May 1997. The sub-committee proposed that in re-drafting the Companies Ordinance provisions on cross-border insolvency (which have remained outstanding to date) the law draftsman might consider the extensive definitions that have been developed in the UNCITRAL Model Law.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.