In a highly international cross-border restructuring, the High Court of Hong Kong has refused to assist the New York-based Chapter 11 trustee of a Singaporean subsidiary of the Cayman-incorporated Peruvian business China Fishery Group (“CFG”).

Significantly, the Court held that there was no way that the Chapter 11 proceedings could be recognised given the applicant had no connection to the US. Assistance was also refused on the grounds of public policy as Chapter 11 proceedings had been commenced for the purpose of preventing the enforcement of undertakings made by CFG group companies. This was held to be objectionable and an affront to the Hong Kong Court.

The judgment also reiterated the general principles of common law recognition and assistance to foreign insolvency proceedings and officeholders, but did not consider specifically how the Hong Kong Court would deal with a Chapter 11 recognition application.


The Chapter 11 trustee of CGP Peru Investments (the “Trustee”), a Singaporean subsidiary of CFG, sought the assistance of the Hong Kong Court to give leave to use a Hong Kong Court order and decision from January 2016 (which had discharged the appointments of liquidators appointed over CFG and Samoa-incorporated China Fisheries International (“CFI”)) in the New York Chapter 11 proceedings. Leave was required because the appointments of provisional liquidators by the Hong Kong Court are made in chambers not open to the public.

In November 2015, HSBC petitioned the Hong Kong and Cayman Islands courts to wind up CFG and CFI and provisional liquidators were appointed. In January 2016, CFG and CFI successfully set aside the appointments. HSBC appealed. The appeal and the pending petitions were withdrawn upon a deed of undertaking being agreed regarding the appointment of a chief restructuring officer and a proposed sale.

Shortly after the appeal was withdrawn, CFG and CFI filed for Chapter 11 in New York. The businesses had no connection with the US.

The Trustee said he intended to use the Hong Kong decision to determine whether CFG and CFI have claims against HSBC or whether HSBC’s conduct might give rise to defences by those companies’ estates.


In his judgment, Mr Justice Harris discussed the Court’s common law power to recognise and provide assistance to foreign insolvency proceedings and officeholders. He stated as follows:

  • Common law jurisdictions do not always recognise and assist all foreign proceedings and officeholders and assistance will vary from jurisdiction to jurisdiction.
  • The position in Hong Kong remains undecided on whether recognition should be limited to officeholders appointed in the place of incorporation but this was not an appropriate case to determine that issue.
  • Generally, recognition of a foreign office holder is determined in common law jurisdictions based on whether the insolvency proceedings are collective in nature and whether the foreign jurisdiction of appointment and the company have a relevant connection.

The judgment did not explore how the Hong Kong Court would approach an application for recognition of Chapter 11 proceedings (in relation to which there is no Hong Kong authority and limited authority in other common law jurisdictions). In any event, the Court held there was no way the Trustee could have satisfied the relevant criteria as the companies clearly had no connection to the US.

In addition to the principles of recognition, the judge also held that he would have declined to provide assistance on public policy grounds: the Chapter 11 proceedings were commenced in order to prevent HSBC enforcing the deed of undertaking and this was self-evidently objectionable and an affront to the Court. This public policy outweighed the more general public policy position of open justice.


Mr Justice Harris’s judgment is a robust response to aggressive actions of a Chapter 11 trustee. The decision demonstrates that, notwithstanding the trend towards recognition and cooperation in cross-border insolvencies, the Hong Kong Court will refuse to assist foreign officeholders on public policy grounds where there are purposeful attempts to avoid undertakings made to the Hong Kong Court.

The judgment also notes that cross-border recognition issues were not ‘fully canvassed’ and therefore it was not appropriate for the Court to explore more generally how it would approach an application for recognition of Chapter 11 proceedings. Echoing previous judicial commentary, the Companies Court appears keen to clarify this area of the law. It seems likely that there will be further judicial commentary on cross-border recognition in Hong Kong in due course – watch this space.