RE THE JOINT AND SEVERAL PROVISIONAL LIQUIDATORS OF FDG ELECTRIC VEHICLES LIMITED (PROVISIONAL LIQUIDATORS APPOINTED)

RE THE JOINT AND SEVERAL PROVISIONAL LIQUIDATORS OF FDG ELECTRIC VEHICLES LIMITED (PROVISIONAL LIQUIDATORS APPOINTED)

The court will recognise foreign provisional liquidators and may grant assistance confined to assets and subsidiaries within Hong Kong; powers to take control of subsidiaries must be limited to those incorporated in Hong Kong or held through Hong Kong incorporated intermediate subsidiaries because control of foreign‑incorporated subsidiaries is governed by the law of their place of incorporation; the court will not impose a general stay in a recognition order and any stay or directions affecting Hong Kong proceedings must be sought by separate application and listed before the judge for case management and determination.

Citation
[2020] HKCFI 2931
Parties
Applicants: Joint and Several Provisional Liquidators of FDG Electric Vehicles Limited (Provisional Liquidators Appointed); Company (subject of Provisional Liquidation): FDG Electric Vehicles Limited; Opposing Subsidiary / Respondent: FDG Kinetic Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
19 November 2020
Case Number
HCMP1308/2020
Procedural Posture
Recognition and Assistance of Foreign Insolvency Proceedings / Application for Recognition and Assistance; Hearing in Chambers; Reasons for Decision
Outcome
Recognition and limited assistance granted; case management direction ordered instead of a general stay
Legal Topics
Recognition of Foreign Liquidation, Provisional Liquidation (soft‑touch), Stay of Proceedings, Jurisdictional Limits, Lex Situs and Lex Incorporationis, Modified Universalism, Rule in Gibbs
Source Language
EN
Cross Border Insolvency Company Law Private International Law Civil Procedure (stays/injunctions) Recognition of Foreign Liquidation Provisional Liquidation (soft‑touch) Stay of Proceedings Jurisdictional Limits +3 more

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Parties

Joint and Several Provisional Liquidators of FDG Electric Vehicles Limited (Provisional Liquidators Appointed)

Applicants

FDG Electric Vehicles Limited

Company (subject of Provisional Liquidation)

FDG Kinetic Limited

Opposing Subsidiary / Respondent

Procedural Posture

Recognition and Assistance of Foreign Insolvency Proceedings / Application for Recognition and Assistance; Hearing in Chambers; Reasons for Decision

Legal Issues

  1. 1 Whether the recognition order should grant the Provisional Liquidators power to take control of all directly and indirectly owned subsidiaries without a jurisdictional qualification
  2. 2 Whether and to what extent a stay should be ordered in respect of existing or prospective proceedings in Hong Kong
  3. 3 Whether powers over foreign‑incorporated subsidiaries can be exercised by a Hong Kong recognition order given lex situs and lex incorporationis

Ratio Decidendi

The court will recognise foreign provisional liquidators and may grant assistance confined to assets and subsidiaries within Hong Kong; powers to take control of subsidiaries must be limited to those incorporated in Hong Kong or held through Hong Kong incorporated intermediate subsidiaries because control of foreign‑incorporated subsidiaries is governed by the law of their place of incorporation; the court will not impose a general stay in a recognition order and any stay or directions affecting Hong Kong proceedings must be sought by separate application and listed before the judge for case management and determination.

Court Disposition

Recognition and limited assistance granted; case management direction ordered instead of a general stay

Orders

  • The Provisional Liquidators are recognised and may exercise powers in respect of the Company\'s assets in Hong Kong, including control of subsidiaries incorporated in Hong Kong or held through Hong Kong incorporated intermediate subsidiaries.
  • If the Provisional Liquidators wish to apply for a stay or other directions in respect of proceedings in the High Court of any sort as a consequence of the recognition of their appointment by this order such application shall be listed before the Honourable Mr. Justice Harris or such other judge as he shall direct....