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CEFC Shanghai - landmark common law recognition of PRC administrators in Hong Kong. Would BVI/Cayman Islands follow suit?
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In this episode of our Take 10 podcast, Andrew Johnstone and Ian Mann discuss the decision in CEFC Shanghai: the first PRC office holder to be recognised under the common law in Hong Kong.
Key Takeaways:
CEFC Shanghai
- CEFC Shanghai was a PRC company in Administration. The Administrators sought common law recognition in Hong Kong in order to stop a garnishee order nisi from being made final.
- The House of Lords decision of Galbraith v Grimshaw [1910] AC 508 not followed, but obiter dicta in Privy Council decision of Grupo Torras SA v Al-Sabah [2014] 2 CLC 636 followed.
- The decision in CEFC Shanghai was consistent with established principles of common law recognition.
Cross border recognition: BVI vs Cayman Islands
- In the BVI, Part XIX of the BVI Insolvency Act permits orders in aid of foreign insolvency proceedings at the request of a foreign liquidator, but only to representatives appointed in 9 specific jurisdictions, of which the PRC is not included.
- Could the common law power of recognition be relied upon by PRC Administrators instead? The answer is: “maybe”, but the BVI Court of Appeal will have to clarify some conflicting first instance decisions.
- The Cayman Islands does have a statutory provision for recognition of foreign companies under Part XVII of the Cayman Islands Companies Law.
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