Bankruptcy petition vs exclusive jurisdiction clause - Who has the last word?
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In this client bulletin, we report on a Hong Kong Court of Final Appeal judgment that clarifies the proper approach in deciding whether to dismiss or stay a creditor’s bankruptcy petition before Hong Kong courts, where the underlying petition debt arises from an agreement containing an exclusive jurisdiction clause in favour of a foreign court.
On 4 May 2023, the Court of Final Appeal (CFA) handed down its much-awaited judgment in Re Guy Kwok Hung Lam [2023] HKCFA 9. This decision is significant. It clarifies the proper approach in deciding whether to dismiss or stay a creditor’s bankruptcy petition before Hong Kong courts, where the underlying petition debt arises from an agreement containing an exclusive jurisdiction clause (EJC) in favour of a foreign court.
In this article, our insolvency, litigation and arbitration specialists consider the practical implications of this decision.