Bank of Baroda v. Psons Ltd

HCCW 162/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 162 OF 2016

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REASONS FOR JUDGMENT

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1.This is a creditor’s petition brought by the Bank of Baroda (“the petitioning creditor”) for an order to wind up Psons Ltd (“the Company”) on the basis of an unpaid debt in the sum of US$16,517,105.68 as at 20 April 2016 together with further interest until payment in full (“the petitioning debt”). An order to wind up the Company was made at the conclusion of the hearing.

2.The petition was first heard on 8 February 2017.  On that occasion the Company applied for an adjournment of 30 days on the basis that it had been successful in resolving a number of petitions and was ‘optimistic’ that the parties would be able to reach an agreement if given more time.     

3.The petitioning creditor did not oppose the application.  The two supporting creditors namely the UCO Bank (“UCO”) and Credit Europe Bank (Suisse) SA (“CEB”) (whose attendance had been dispensed with) also were not opposed to an adjournment.

4.From the Company's affirmation, the basis for opposing the petition appeared to be that the petitioning debt was bona fide disputed.  However the Company failed to lodge any written submissions for the hearing at all.

5.In those circumstances a 10‑day adjournment was granted, the court intimating that no further adjournments would be entertained.  It also gave directions for the Company to lodge its submissions by 4 pm, Tuesday 14 February 2017.

6.During the adjournment the Company was able to reach agreement with the supporting creditors UCO and CEB who, accordingly, withdrew their support for the petition.

7.The Company duly lodged its skeleton argument which was no more than a single page.  It summarised the events at the earlier hearing but contained no substantive submissions on the merits of the petition. Rather, the Company acknowledged that “in view of events at the last hearing if the [petitioning creditor] would press for a winding up order at this hearing the Company could not oppose that”.

8.At the adjourned hearing, the court was advised that the parties failed to reach a settlement.  Mr Alder who appeared for the Company sought a 30 day adjournment which the petitioning creditor did not oppose.  Counsel produced a signed (but yet to be notarized) affirmation of Pradeep Phulchand Agarwal a director of the Company reporting on the status of the negotiations and seeking a 14 day adjournment.

9.Mr Lok counsel for the petitioning creditor was not in a position to confirm the contents of that affirmation.  Suffice it to say that its contents show that seemingly insuperable obstacles lie in the way of any settlement.  

10.The petition was filed in May 2016.  The parties have had ample time to negotiate.  There is nothing to suggest that the grant of a further adjournment of 14 days the deponent requested would serve any useful purpose.  In those circumstances a winding up order was the inevitable outcome.

Mr Michael Lok, instructed by Wilkinson & Grist, for the petitioner

Mr Edward Alder, instructed by Smyth & Co, for the respondent

Attendance of the Official Receiver is exempted