PALOMA CO LTD v. CAPXON ELECTRONIC INDUSTRIAL CO LTD

PALOMA CO LTD v. CAPXON ELECTRONIC INDUSTRIAL CO LTD

Capxon failed to show cause why the Charging Order Nisi should not be made absolute. The court accepted that the common law power to recognise and assist does not apply to a foreign solvent members voluntary winding up and that Hong Kong policy does not bar making a charging order absolute absent an imminent...

Source-derived case information.

Citation
[2020] HKCFI 754
Parties
Applicant / Claimant in the Arbitration (judgment Creditor): Paloma Company Limited; Respondent / Respondent in the Arbitration (judgment Debtor): Capxon Electronic Industrial Company Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
14 May 2020
Case Number
HCCT53/2017
Procedural Posture
Charging Order Application and Enforcement of Arbitral Award / Charging Order Hearing and Decision; Disclosure Summons Adjourned
Outcome
Charging Order Nisi made absolute against 85,137,200 Lancom Limited shares held by Capxon; Capxon failed to show cause
Legal Topics
Charging Order Nisi, Voluntary Winding Up, Recognition and Assistance of Foreign Insolvency, Modified Universalism, Pari Passu Distribution, Discovery
Source Language
en
Civil Procedure Cross Border Insolvency Company Law Arbitration Enforcement Equity Charging Order Nisi Voluntary Winding Up Recognition and Assistance of Foreign Insolvency +3 more

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Summary, issues, holding and outcome

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Parties

Paloma Company Limited

Applicant / Claimant in the Arbitration (judgment Creditor)

Capxon Electronic Industrial Company Limited

Respondent / Respondent in the Arbitration (judgment Debtor)

Procedural Posture

Charging Order Application and Enforcement of Arbitral Award / Charging Order Hearing and Decision; Disclosure Summons Adjourned

Legal Issues

  1. 1 Whether the Charging Order Nisi should be made absolute
  2. 2 Whether common law power to recognise and assist foreign insolvency applies to a solvent members voluntary winding up
  3. 3 Whether Hong Kong law and policy preclude making a charging order absolute where a foreign solvent liquidation has commenced

Ratio Decidendi

Capxon failed to show cause why the Charging Order Nisi should not be made absolute. The court accepted that the common law power to recognise and assist does not apply to a foreign solvent members voluntary winding up and that Hong Kong policy does not bar making a charging order absolute absent an imminent collective pari passu distribution; Taiwanese proceedings and enforcement steps taken by the Taiwanese court were relevant but did not prevent granting the order. Accordingly the Charging Order Nisi is made absolute.

Court Disposition

Charging Order Nisi made absolute against 85,137,200 Lancom Limited shares held by Capxon; Capxon failed to show cause

Orders

  • Charging Order Nisi made absolute in favour of Paloma Company Limited in respect of 85,137,200 Lancom Limited shares
  • Costs order nisi: all costs of and occasioned by the application to Paloma with certificate for 2 counsel, to be taxed if not agreed