Bryan O’Hare, commercial and insolvency disputes partner in the Hong Kong Office, and his team, Pui Yip Leung (associate) and Wing Lui (trainee), are acting for the Debtor/Respondent in the highly anticipated upcoming appeal to the Hong Kong Court of Final Appeal (CFA) which will be heard by a full Court comprising five Judges on 2 March 2023 in the case of Tor Asia Credit Master Fund LP (Creditor/Petitioner/Appellant) v. Guy Kwok-Hung Lam (Debtor/Respondent) (FACV 13/2022).
We previously successfully appealed the judgment against our client at first instance in the Court of Appeal. The Court of Appeal judgment, which has already attracted global interest in the restructuring and insolvency community, concerns the important question of the applicable approach to a bankruptcy petition presented in Hong Kong on a debt subject to a New York law/Courts exclusive jurisdiction clause (EJC). The Court of Appeal, by majority, held that when the debtor disputes the petition debt subject to an EJC, the petition is not allowed to proceed unless strong reasons are shown, and in the absence of any special cause, should be dismissed rather than stayed. In the appeal to the CFA, we are arguing that the Court of Appeal’s approach was correct and should be upheld although there are conflicting authorities in other jurisdictions which favour the appellant. The final decision of the CFA will bring finality to a complex area of the law which has been in a ‘state of flux’ (as commented by the Court of Appeal) and will have far reaching implications for financial institutions/lenders/borrowers and related security enforcement options and strategy in the event of a payment default.
