KUNZHI LIMITED (IN LIQUIDATION IN THE BRITISH VIRGIN ISLANDS) v. PEKING UNIVERSITY FOUNDER GROUP CO LTD

KUNZHI LIMITED (IN LIQUIDATION IN THE BRITISH VIRGIN ISLANDS) v. PEKING UNIVERSITY FOUNDER GROUP CO LTD

The Court refused the Administrator’s application for a stay of the Hong Kong actions because the Administrator and Company failed to demonstrate sufficiently strong reasons to displace the parties’ contractual choice of Hong Kong jurisdiction; however the Court granted recognition and assistance to the Mainland reorganisation, imposed specified directions for cooperation and limited the stay so that it does not bar the four HCA actions from proceeding in Hong Kong, and ordered costs in favour of the Plaintiffs.

Citation
[2021] HKCFI 3817
Parties
Plaintiff (in Liquidation in the British Virgin Islands): Nuoxi Capital Limited; Plaintiff (in Liquidation): Founder Information (Hong Kong) Limited; Plaintiff (in Liquidation): Hongkong JHC Co., Limited; Plaintiff (in Liquidation in the British Virgin Islands): Kunzhi Limited; Defendant (in Restructuring in the Mainland Prc): Peking University Founder Group Company Limited; Applicant (member of PUFG Liquidation Group / Administrator Representative): Zheng Zhibin; Applicant (member of PUFG Liquidation Group / Administrator Representative): Zhang Ting
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
17 December 2021
Case Number
HCA1442/2021
Procedural Posture
Multiple Civil Actions for Declaration of Contractual Rights and an Originating Summons for Recognition and Assistance of Mainland Reorganisation / Interlocutory Applications (stay, Recognition and Case Management)
Outcome
Administrator's applications to stay the HCA actions dismissed; order recognising the Beijing reorganisation and granting assistance to the Administrator with specified limits and directions; general stay in recognition order modified so it does not operate to prevent the four HCA actions; costs nisi in favour of...
Legal Topics
Keepwell Deed Enforceability, Exclusive Jurisdiction Clauses, Recognition and Assistance of Foreign Insolvency Proceedings, Submission by Proof of Debt, Modified Universalism, Ascertainment of Foreign Law
Source Language
EN
Cross Border Insolvency Contract Law Private International Law Civil Procedure Public Law Keepwell Deed Enforceability Exclusive Jurisdiction Clauses Recognition and Assistance of Foreign Insolvency Proceedings +3 more

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Parties

Nuoxi Capital Limited

Plaintiff (in Liquidation in the British Virgin Islands)

Founder Information (Hong Kong) Limited

Plaintiff (in Liquidation)

Hongkong JHC Co., Limited

Plaintiff (in Liquidation)

Kunzhi Limited

Plaintiff (in Liquidation in the British Virgin Islands)

Peking University Founder Group Company Limited

Defendant (in Restructuring in the Mainland Prc)

Zheng Zhibin

Applicant (member of PUFG Liquidation Group / Administrator Representative)

Zhang Ting

Applicant (member of PUFG Liquidation Group / Administrator Representative)

Procedural Posture

Multiple Civil Actions for Declaration of Contractual Rights and an Originating Summons for Recognition and Assistance of Mainland Reorganisation / Interlocutory Applications (stay, Recognition and Case Management)

Legal Issues

  1. 1 Whether Hong Kong courts should stay proceedings in favour of Mainland reorganisation proceedings
  2. 2 Whether filing proofs of debt in Mainland reorganisation constitutes submission barring parallel proceedings in Hong Kong
  3. 3 Construction and enforceability of Keepwell Deeds under English law (clauses 2.2, 4.1, 15.1, 15.2)

Ratio Decidendi

The Court refused the Administrator’s application for a stay of the Hong Kong actions because the Administrator and Company failed to demonstrate sufficiently strong reasons to displace the parties’ contractual choice of Hong Kong jurisdiction; however the Court granted recognition and assistance to the Mainland reorganisation, imposed specified directions for cooperation and limited the stay so that it does not bar the four HCA actions from proceeding in Hong Kong, and ordered costs in favour of the Plaintiffs.

Court Disposition

Administrator's applications to stay the HCA actions dismissed; order recognising the Beijing reorganisation and granting assistance to the Administrator with specified limits and directions; general stay in recognition order modified so it does not operate to prevent the four HCA actions; costs nisi in favour of...

Orders

  • Dismissal of the Administrator’s applications to stay HCA 778/2021, HCA 798/2021, HCA 1418/2021 and HCA 1442/2021
  • Costs order nisi: Administrator to pay Plaintiffs’ costs of the applications forthwith with certificate for two counsel, taxed if not agreed