IFLR Quotes Naomi Moore on HK Insolvency Decision

For its article “Hong Kong SAR’s insolvency decision demonstrates cooperation with Chinese courts,” International Financial Law Review quoted Akin Gump financial restructuring partner Naomi Moore on the Hong Kong court’s decision in Nuoxi Capital v Peking University Founder Group, which involved the mutual recognition of bankruptcy and insolvency proceedings between mainland China and Hong Kong.

Said Moore, “The case is another example where the Hong Kong courts have been willing and able under Hong Kong common law to recognise and give assistance to bankruptcy administrators appointed in mainland China, yet clarifies that such recognition and assistance will not prejudice the rights of contractual parties to have disputes determined in accordance with a Hong Kong court exclusive jurisdiction clause.”

Regarding holders of offshore bonds backed by keepwell deeds that have a HK court exclusive jurisdiction clause, she said that, assuming the court’s decision to refuse a stay of the HK proceedings is not overturned on appeal, “The indications are that the Hong Kong court will not lightly deprive the beneficiaries of those keepwell arrangements of their right to have claims determined in accordance with a Hong Kong court exclusive jurisdiction clause unless there is a compelling reason to do so.”

The article notes that a key factor in the case was the jurisdiction clause in the keepwell deed gave the HK court exclusive jurisdiction over disputes arising under the keepwell deed. Moore commented, “It will be interesting to see whether the Hong Kong court will reach the same conclusion on a stay application relating to claims under a keepwell deed containing a non- exclusive jurisdiction clause in favour of the Hong Kong court.”