Cross-Border Derivative Issues Considered In Hong Kong, Yet Issues Remain

The Hong Kong Court has held that a shareholder in a BVI company seeking to bring a derivative claim in Hong Kong must first obtain the permission of the BVI Court under Section 184C of the BVI Business Companies Act, 2004.

In Wong Ming Bun v Wang Ming Fan and Others¹, the Plaintiff sought to bring derivative proceedings on behalf of Creative China Limited, a BVI incorporated company in which he was a shareholder ("the Company"). The Company's principal asset was a majority stake in a Hong Kong Listed company. The Defendants applied to strike out the Claim on the footing that the Plaintiff required, and had not obtained, the permission of the BVI Court under Section 184C of the BVI Business Companies Act, 2004 ("the Act") before commencing derivative proceedings. This application succeeded: the Claim was struck out.