Read the full judgment text of HCCT 53/2017 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 14 May 2020 before Hon K Yeung J in Chambers.
Civil procedure — Charging Order — Arbitration award enforcement — Cross-border insolvency assistance — Solvent voluntary winding-up — Common law power of assistance — Local law and policy — Whether charging order nisi should be made absolute despite Taiwan winding-up — Principles and limitations under Singularis Holdings Ltd v PricewaterhouseCoopers [2015] AC 1675, Re Supreme Tycoon Ltd [2018] 1 HKLRD 1120 and related authorities. Paloma Company Limited obtained a Japanese arbitral award against Capxon Electronic Industrial Company Limited; a Charging Order Nisi was made in Hong Kong over shares held by Capxon, the subject of a voluntary winding-up in Taiwan. The main legal issues were (1) whether Hong Kong courts’ common law power to assist foreign liquidations applies to solvent voluntary winding-ups, (2) whether local law and policy prevent a charging order becoming absolute in such cases, and (3) the relevance of the foreign court's exercise of discretion in enforcement proceedings. The court held that Hong Kong’s common law power of assistance does not extend to solvent liquidations akin to members’ voluntary winding-ups, which are private arrangements and not collective insolvency proceedings. Local policy permits making the charging order absolute absent imminent pari passu distribution or insolvency, preserving the rule that the first creditor to enforce acquires priority. The foreign Taiwanese court’s refusal to stay enforcement despite Capxon’s objections was a relevant factor to uphold the charging order. Capxon failed to discharge the burden of showing cause, and the Charging Order Nisi was made absolute with costs to Paloma.
Legal issues: Common law power of assistance to foreign solvent liquidation · Local law and policy regarding charging orders in solvent winding-up · Proper exercise of discretion in recognition of foreign court orders
Outcome: Charging Order Nisi made absolute in favour of Paloma; Capxon failed to show cause against making the Charging Order absolute.
Cited by 4 cases · Cites 3 cases