Cross-Border Insolvency: Hong Kong Liquidators Apply for Recognition and Assistance in Mainland China for the First Time

4 October 2021 | PDF Version


On 14 May 2021, a cooperation mechanism was established between the Mainland and Hong Kong in the form of the Record of Meeting of the Supreme People's Court and the Government of the Hong Kong Special Administrative Region and Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings between the Court of the Mainland and the Hong Kong Special Administrative Region and the Supreme People’s Court’s Opinion on taking forward a pilot measure in relation to Recognition and Assistance to Bankruptcy (Insolvency) Proceedings in the Hong Kong Special Administrative Region (the “SPC Opinion”).

Under the mechanism, the two jurisdictions agreed to terms where pilot cities (Shanghai, Shenzhen and Xiamen) in the Mainland and Hong Kong mutually recognise and assist each other in insolvency matters.  This is a significant development for practitioners on both sides of the border, and indicates the start of increased judicial cooperation which should support cross-border economic activities between Hong Kong and the GBA.

The first application was recently issued by the Hong Kong Companies Court to the Bankruptcy Court of the Shenzhen Intermediate People’s Court in Re Samson Paper Company Limited (in Creditors’ Voluntary Liquidation) [2021] HKCFI 2151.  A liquidator appointed by a Court outside the Mainland has never been formally recognised by a Mainland Court, and, as the Honourable Mr. Justice Harris remarked, Re Samson Paper is a key decision marking Mainland-Hong Kong cooperation in corporate insolvency.

Re Samson Paper

The company in Re Samson Paper, Samson Paper Company Limited, was incorporated in Hong Kong, though had substantial assets in Mainland China, including subsidiaries incorporated in Shanghai and Shenzhen, landed property in Beijing, and receivables due from affiliated Mainland-based companies. Liquidators were appointed in Bermuda in July 2020 on a soft-touch basis, and their appointment and powers were then recognised in Hong Kong a month later.  The Company was put in compulsory liquidation in Hong Kong in August 2020.  The liquidators took out an application to the Hong Kong Companies Court for a letter of request to be issued to the Bankruptcy Court of the Shenzhen Intermediate People’s Court to assist them in securing and collecting the Company’s substantial assets in Shenzhen.

The Procedure

Under Article 6 of the SPC Opinion, a Hong Kong liquidator should submit the following documents (with a Chinese translation if the original document is not in Chinese):-

  1. an application;
  2. a letter of request for recognition and assistance issued by the Hong Kong High Court;
  3. the relevant documents on the commencement of the Hong Kong Insolvency Proceedings and in relation to the appointment of the Hong Kong Administrator;
  4. materials showing that the debtor's centre of main interests is in the Hong Kong Special Administrative Region, and if any of such materials was issued outside the Mainland, it shall be certified in accordance with the law of the Mainland;
  5. a copy of the judgment in respect of which the application for recognition and assistance is made;
  6. a copy of the identity document of the Hong Kong Administrator, and if such identity document was issued outside the Mainland, it shall be certified in accordance with the law of the Mainland; and
  7. evidence showing that the debtor's principal assets in the Mainland are in a pilot area, or that it has a place of business or a representative office in a pilot area.

The Law

For the cooperation mechanism to be applicable, the company must have its COMI in Hong Kong.  Pursuant to Article 4 of the SPC Opinion and the decision of Re Samson Paper, the cooperation mechanism applies only to cases where the company’s COMI is continuously in Hong Kong for at least 6 months.  The SPC Opinion defines “COMI” generally as “the place of incorporation”, but the process accounts for other factors such as the place of principal office, principal place of business, principal place of assets etc.

Harris J held that the Hong Kong Court has the inherent jurisdiction to grant letters of request to permit Hong Kong liquidators to seek recognition and assistance in other jurisdictions.  What the Court would consider before granting a letter, is which jurisdiction would be the most appropriate or convenient forum for the determination of the issue in question.  Harris J also found it to be desirable for the Hong Kong liquidators to be recognised and assisted by the Shenzhen Court so that they may be able to carry out their duties in the jurisdiction of the Shenzhen Court.


The introduction of the cooperation mechanism is timely as it aligns with the anticipated increase in cross-border economic interaction.  We anticipate that more applications will follow Re Samson Paper.

Disclaimer: This article is provided for reference purposes only and are not intended, nor should they be used, as a substitute for professional advice or judgment or to provide legal advice with respect to specific circumstances. If you require any legal advice or other expert assistance, please consult a competent professional adviser.

Lexis Advance® Hong Kong Practical Guidance provides up-to-date practice notes, precedents and know-how from specialist solicitors and barristers so you can work efficiently and provide advice with confidence. It also contains exclusively written content by trusted experts in the field. GALL is one of our many expert contributors from a range of Hong Kong legal leaders.



Evelyn Chan

Partner, GALL


Evelyn’s practice focuses on complex civil litigation, with a particular focus in PRC related matters. She is also an insolvency specialist and regularly advises and acts for companies and leading insolvency practitioners in Hong Kong in high-profile, complex, often multi-jurisdictional insolvency matters.


Adriel Wong

Associate, GALL


Adriel provides support to the team in various aspects of the firm’s civil and commercial litigation practice since September 2018. He completed his LL.B and PC.LL with distinction at the City University of Hong Kong.

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