Vice-President of the Supreme People's Court (SPC) Yang Wanming and Hong Kong Secretary for Justice Teresa Cheng Yeuk-wah sign a record of meeting on mutual recognition of and assistance to insolvency proceedings between the courts of the two places in Shenzhen, May 14, 2021. (PROVIDED TO CHINA DAILY)
HONG KONG – Officials from the mainland and the Hong Kong Special Administrative Region’s government have agreed to strengthen mutual recognition of and assistance to insolvency proceedings between the courts of the two places.
Vice-President of the Supreme People's Court (SPC) Yang Wanming and Hong Kong Secretary for Justice Teresa Cheng Yeuk-wah signed the relevant record of meeting in a ceremony in Shenzhen on Friday.
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Under the arrangement, liquidators from Hong Kong may apply to mainland courts for recognition of insolvency proceedings in the financial hub. Likewise, bankruptcy administrators from the mainland may apply to the High Court in Hong Kong for recognition of bankruptcy proceedings in the mainland
The arrangement highlights the unique role enjoyed by the HKSAR under “one country, two systems”, fostering further legal cooperation in civil and commercial matters, according to a Hong Kong government release.
Under the arrangement, liquidators from Hong Kong may apply to mainland courts for recognition of insolvency proceedings in the financial hub. Likewise, bankruptcy administrators from the mainland may apply to the High Court in Hong Kong for recognition of bankruptcy proceedings in the mainland.
The new cooperative framework covers bankruptcy compromise and reorganization in the mainland as well as debt restructuring in Hong Kong. It encourages the use of restructuring of debts to revive businesses with a view to reaching consensus among creditors from both places and abroad.
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The framework facilitates the rescue of financially troubled businesses, and provides better protection of the assets of the debtor company as well as the interests of the creditors, according to the release.
In the long run, the framework will give additional assurance to investors and further improve the business environment in the mainland and Hong Kong, the government said.