This article first appeared in Volume 18, Issue 3 of International Corporate Rescue and is reproduced here with the permission of Chase Cambria Publishing - www.chasecambria.com
On May 14, 2021, the Government of the Hong Kong Special Administrative Region and the Supreme People’s Court of the People’s Republic of China signed a joint record of meeting on mutual recognition of and assistance to bankruptcy and insolvency proceedings between the courts of the Mainland and of the HKSAR.
This is a significant development. Apart from this specific bilateral recognition and cooperation framework with Mainland China, the HKSAR does not have in place any similar country-to-country framework with any other nation, nor does it have a broader framework for multilateral cooperation. In the latter regard, the HKSAR remains a notable exception to the 53 jurisdictions that have to date adopted the United Nations Commission on International Trade Law Model Law on Cross Border Insolvency.
In this article published by International Corporate Rescue, Scott Atkins and Kai Luck look more deeply at the implications of this development and consider whether, despite this initiative, the absence of a uniform cross-border recognition and cooperation framework and an effective formal local rescue and restructuring process will continue to limit HKSAR’s position globally.
These limitations may exist not only in terms of having in place effective restructuring and insolvency processes, but also more broadly on an economic and financial level given the manner in which flexible, efficient and principled insolvency systems serve as such a critical pillar of a nation’s innovation, productivity and growth.