Read the full judgment text of HCCT 2/2024 on BabelCite. This High Court CFI judgment was delivered on 15 August 2025 before Hon Anthony Chan J.
Construction and Arbitration — Charging Order — Foreign insolvency proceedings unrecognised in Hong Kong — Whether foreign insolvency can resist charging order absolute — Whether charging order absolute causes undue prejudice to other creditors — Whether exceptional circumstances exist — Royue Limited, a BVI company, faced BVI provisional and then winding up orders unrecognised in Hong Kong sought to resist Lead Good’s charging order absolute over substantial shareholding in Zhenro Properties Group Ltd. The court held that absent recognition of foreign insolvency proceedings in Hong Kong, the principle of pari passu distribution does not apply and a charging order absolute may be granted based on the 'first past the post' principle. The court found no undue prejudice to other creditors on grounds of Lead Good’s conduct, and no sharp conduct or abuse of process was identified. Issues regarding exceptional circumstances did not arise due to the rejection of Royue’s first issue. Appeal dismissed; costs fixed at HK$150,000.
Legal issues: Whether foreign insolvency proceedings may be relied upon to resist charging order · Whether there is undue prejudice to other creditors by granting charging order absolute · Whether exceptional circumstances justify granting charging order absolute despite unrecognised foreign liquidation
Outcome: Appeal dismissed with costs to Lead Good
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