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ARTICLE · 09 MAY 2024

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The Dust Settles - The Interplay Between Arbitration Clauses And Winding-Up Petitions

Withers LLP
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On 23 April 2024, the Court of Appeal handed down two eagerly anticipated judgments of Re Shandong Chenming Paper Holdings Ltd [2024] HKCA 352 and Re Simplicity & Vogue Retailing (HK)...

United KingdomLitigation, Mediation & Arbitration
Joseph Chu
Joseph Chu
Lawton C. Leung
Lawton C. Leung
Tiffany Wong
Tiffany Wong
Akanksha Rathke
Akanksha Rathke
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On 23 April 2024, the Court of Appeal handed down two eagerly anticipated judgments of Re Shandong Chenming Paper Holdings Ltd [2024] HKCA 352 and Re Simplicity & Vogue Retailing (HK) Co Ltd [2024] HKCA 299. Both appeals raise a common question of law concerning the proper approach when faced with a disputed winding-up petition where the underlying debt is subject to an arbitration clause.

In a step towards achieving much needed clarity, the twin decisions confirmed that, the principles regarding exclusive jurisdiction clauses ("EJC") laid down in Re Guy Kwok Hung Lam [2023] HKCFA 9 ("Guy Lam") also apply to arbitration clauses. In essence, unless there are countervailing factors, the Court should generally uphold arbitration clauses and decline to exercise its insolvency jurisdiction.

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