The Transnational Aspects of Hong Kong Insolvency Law

Abstract

Many Asian countries, including the People’s Republic of China, have been developing at an accelerated pace and are playing an expanded role in world trade. Hong Kong’s role as a world financial market benefits from this growth, for Hong Kong is a major conduit by which Chinese enterprises, and Hong Kong enterprises investing in China, raise capital from local, Asian-Pacific, and other interests. However, hovering in the background of Hong Kong’s prosperity is the planned resumption of Chinese sovereignty over Hong Kong in 1997. If foreign investors lose confidence in Hong Kong or if economic crises develop in China, foreign funds will very likely flow out of Hong Kong as quickly as they came in, perhaps causing a crash in the Hong Kong stock market and property markets and, in turn, the insolvency of many Hong Kong companies and individuals. This article provides an overview of pre-1997 Hong Kong transnational insolvency law, discussing the options availableto (1) a foreign representative seeking to protect the assets of a foreign debtor in Hong Kong and to obtain cross-border assistance from the Hong Kong courts and (2) to a Hong Kong trustee or liquidator seeking cross-border asssistance outside Hong Kong.