The Joint Provisional Liquidators of BJB Career Education Company Limited and Xu Zhendong – HCMP 1139 of 2016 (date of judgment 18 November 2016)
This is the first Hong Kong decision where the Hong Kong Court has granted powers to foreign liquidators permitting them to orally examine a company director in Hong Kong pursuant to a letter of request made by a foreign Court.
BJB Career Education Company Limited (the “Company”) is a company incorporated in the Cayman Islands which provided vocational technology education through its subsidiaries in the People’s Republic of China. The Company went into liquidation on 3 July 2016 by an order of the Grand Court of the Cayman Islands and joint provisional liquidators (the “Provisional Liquidators”) were appointed.
A letter of request was made by the Cayman Court seeking assistance from the Hong Kong Court to make orders against the former Chairman and director of the Company compelling him to produce documents, answer interrogatories and attend the Hong Kong Court for an oral examination by the Provisional Liquidators.
Previously it was the practice of foreign liquidators to wind up foreign companies in Hong Kong to avail themselves of the same investigative powers as a Hong Kong liquidator. This inevitably incurred substantial time and costs. Also, there were occasions where the necessary jurisdictional nexus to wind up a foreign company were not met.
Since the landmark case of Joint Official Liquidators of A Co and B  4 HKLRD 374, there has been a flurry of assistance afforded by the Hong Kong Court to foreign liquidators. Annex A to this bulletin is a summary of these judgments.
Harris J explained that the common law power of assistance extends to ordering an oral examination if such a power (a) exists in the jurisdiction of the place of the liquidation, which is also the place of incorporation of the company and (b) the power exists in the assisting jurisdiction (citing the Privy Council judgment in Singularis Holdings Ltd v PricewaterhouseCoopers  2 BCLC 597 and the UK Supreme Court judgment in Rubin v Eurofinance SA  1 AC 236).
An interesting point which Harris J addressed was whether such recognition infringes Article 96 of the Basic Law. This provides that Beijing’s authorisation is required before the Hong Kong Government can enter into a reciprocal judicial arrangement with a foreign state.
Harris J accepted that recognition and assistance to foreign liquidators is founded in the common law rather than reciprocity, and therefore did not infringe Article 96. His Lordship noted that there were a number of cases prior to 1997 where the Hong Kong Courts had used the common law to assist foreign liquidators, and Article 8 of the Basic Law allows the laws in force in Hong Kong prior to 1997 (i.e. the common law) to be maintained.
Over the past two years, case law on the recognition and assistance to foreign liquidators has developed rapidly in Hong Kong. Foreign liquidators are now equipped with more useful tools to properly conduct investigations into the foreign company’s affairs in cases where information is available in Hong Kong.
|Joint Official Liquidators of A Co and B  4 HKLRD 374
(judgment dated 21 July 2014)
|First reported case in Hong Kong demonstrating that there is a mechanism available to foreign liquidators for seeking recognition and obtaining information and documents in Hong Kong pursuant to a letter of request from a foreign Court.
Banks should provide records of a foreign company to a foreign liquidator even without a production order from the Hong Kong Court.
|The Joint Administrators of African Minerals Limited (in administration) and Madison Pacific Trust Limited and another - HCMP 865 of 2015 (judgment dated 16 April 2015)
||Hong Kong does not have any equivalent mechanism to administration and the application for recognition was refused.
|The Joint Official Liquidators of Centaur Litigation SPC (in liquidation) – HCMP 3389 of 2015, HCMP 3391 of 2015 and HCMP 3393 of 2015 heard together
(judgment dated 10 March 2016)
|Appended a standard order which includes:
a. a recognition order;
b. an order to take possession and control of the foreign company’s property, investigate its affairs and bring proceedings; and
c. an order that no action be proceeded or commenced against the foreign company in Hong Kong unless with the Court’s leave.
|Rennie Produce (Aust) Pty Ltd (in liquidation in Australia) – HCMP 1640 of 2016
(judgment dated 26 August 2016)
|Appended the substantive terms of a production order which the Hong Kong Court is willing to make pursuant to a letter of request.
|Bay Capital Asia Fund, LP (in official liquidation) and DBS Bank (Hong Kong) Limited – HCMP 3104 of 2015
(judgment dated 2 November 2016)
|Reiterated principles in Joint Official Liquidators of A Co and B.
|The Joint Provisional Liquidators of BJB Career Education Company Limited (in provisional liquidation) and Xu Zhendong – HCMP 1139 of 2016
(judgment dated 18 November 2016)
|Private examination powers similar to s.221 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) granted to foreign liquidators.