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17 Dec 2020

Recent PRC court case puts the use of keepwell deed under scrutiny

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In our client alert "Recent PRC court case puts the use of keepwell deed under scrutiny" published in June 2020, we discussed the ongoing restructuring case involving a keepwell deed provided by the Peking University Founder Group, where the PRC court cast doubt on enforceability of keepwell deeds.

Whilst we await further update to the Peking University Found Group case, there was recently a separate, new development in relation to the recognition of keepwell deeds in the PRC as the Shanghai Financial Court(上海金融法院)issued a ruling in November 2020 and recognised the decision handed down by the Hong Kong Court of First Instance for the order of CEFC Shanghai International Group (CEFC), a PRC-incorporated company, to pay noteholders on account of keepwell deed.

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