The Court of First Instance has granted the petitioner in Re Shandong Chenming Paper Holdings Limited [2023] HKCFI 2065 (“Re Shandong Chenming“) leave to appeal to the Court of Appeal from its decision to stay the winding-up petition pending resolution of an arbitrable cross-claim by the company (see our earlier news update here).

The decision followed the Court of Final Appeal’s decision in Re Guy Kwok-Hung Lam [2023] HKCFA 9 (“Re Guy Lam“), in which our highest Court dismissed a bankruptcy petition in light of an exclusive jurisdiction clause. Since the CFA’s decision, there have been various cases discussing whether the ratio of Re Guy Lam applies to winding-up proceedings where the subject companies have contended that the dispute should be referred to arbitration.

Harris J granted leave to appeal to the petitioner in Re Shandong Chenming. He reasoned that there were two other recent decisions by the Court of First Instance (namely Re Simplicity & Vogue [2023] HKCFI 1443 and Re Inversion Productions Limited [2023] HKCFI 2400) which were decided differently from Re Shandong Chenming, with both of them holding that Re Guy Lam did not apply to arbitration clauses. It was thus desirable for the Court of Appeal to reconcile the conflicting decisions by the Court of First Instance.

Harris J further reasoned that this would be a good opportunity for the Court of Appeal to clarify the application of the Lasmos approach (from Re Southwest Pacific Bauxite [2018] 2 HKLRD 449), which was noted in the his judgement in Re Shandong Chenming.

Please see here for the full decision.