Re The Joint Liquidators of Supreme Tycoon Limited (in liquidation in the British Virgin Islands) (08/02/2018, HCMP833/2017), [2018] HKCFI 277

The Hong Kong Court of First Instance considered whether an insolvent liquidation, commenced by the shareholder of a company registered in the British Virgin Islands, was eligible for common law recognition in Hong Kong.

The East Caribbean Supreme Court ordered the winding up of China Culture Media International Holdings Limited, the sole shareholder of Supreme Tycoon Limited (STL).  One of the liquidators of China Culture, acting on behalf of the company, passed a shareholder's resolution for the voluntary winding up of STL.  To obtain further information as to the company records and affairs, the liquidators sought recognition of the liquidation in Hong Kong.

The Court did not follow the Privy Council's obiter comments in Singularis Holdings Limited v PricewaterhouseCoopers that a court should not assist in foreign voluntary winding up proceedings, which the Board commented, were essentially private arrangements.  In the case of Supreme Tycoon, the insolvency process was for the collective benefit of STL's creditors, which the Court considered was fundamental for cross-border assistance in insolvency proceedings.  The process was an insolvent liquidation, although it was voluntary in the sense that it was commenced by shareholders' resolution.  The Court considered that the question of whether the liquidators were court-appointed or not was irrelevant.  For these reasons the Court held that the BVI liquidation should be given common law recognition.

A copy of the decision can be found here.