The Hong Kong government recently issued a consultation paper, and sought views from members of the public and interested stakeholders, on a proposed arrangement between Hong Kong and the mainland for the reciprocal recognition and enforcement of judgments in civil and commercial matters. The proposed arrangement seeks to provide a mechanism which widens the existing and limited scope for the enforcement of mainland court civil judgments in Hong Kong and vice versa.
The High Court recently considered the proper basis for the distribution of money in the client account of a closed law firm. The money is held by the relevant regulator on trust for the persons beneficially entitled to it – namely, the former clients. Where there is a shortfall between the verified claims of former clients and the balance in the client account, the court may need to direct how the money should be distributed.
In certain circumstances the courts in Hong Kong can extend Mareva relief against a defendant to third parties under the so-called 'Chabra' jurisdiction. In a recent case, the assets which the trustees sought to locate were not directly held by the bankrupt, but appear to have been indirectly held through a family trust and related companies. As before, the court demonstrated its willingness to extend Mareva relief under the Chabra jurisdiction in deserving cases.
A recent decision of the Court of First Instance confirms the conventional thinking that a relationship between a bank and a customer does not of itself give rise to a duty of care to advise on the part of the bank. The court dismissed the claimant investor's mis-selling claim against the bank on the basis that neither the terms of the relevant contracts entered into with the bank nor the circumstances of the case suggested that there had been an assumption of a duty to advise by the bank.
There are no statutory provisions empowering the Hong Kong courts to provide assistance and recognition to foreign insolvency office holders. The courts therefore rely on their inherent power (where appropriate) under the common law principle of modified universalism to provide such assistance. Although the application of this principle is not without its problems, the courts in recent years have shown some willingness to assist the effective implementation of cross-border insolvency and restructuring regimes.