Research On Cross-border Insolvency Recognition And Assistance Regimes Between Chinese Mainland And Hong Kong

Chinese Mainland is the largest and most important economic partner of Hong Kong.With the continuous construction of the Guangdong-Hong Kong-Macao Greater Bay Area,the demand for commercial entities between Chinese Mainland and Hong Kong in the field of insolvency has been growing day by day.Cross-border corporate insolvency between the two places has been frequent in the context of the impact of the Covid-19 epidemic on the economy and the industrial restructuring at home and abroad.However,the existing legal systems of the two places are very weak in the area of cross-border insolvency and do not meet the needs of practical development.Since the two places belong to different legal systems and there are significant differences in their legal systems,this has become a major obstacle to the mutual recognition of insolvency between the Mainland and Hong Kong,especially in the judgment of jurisdiction.In 2021,the Mainland and Hong Kong signed the "Minutes of Talks" on the mutual recognition and assistance of the courts of the mainland and the Hong Kong Special Administrative Region in cross-border insolvency proceedings and promulgated the "Pilot Opinions on Recognizing and Assisting the Insolvency of the Hong Kong Special Administrative Region"(hereinafter referred to as "The Pilot Opinion"),which provides institutional arrangements for insolvency cooperation between the two places and introduces important parallel proceedings and the theory of center of main interests("COMI"),and gradually breaks the ice for judicial cooperation in insolvency between the two places,and cross-border insolvency cooperation between the two places has entered a stage of rapid development.This paper mainly uses comparative law research,case study method and other research methods to analyze the basic theory of cross-border insolvency recognition and assistance,the legal system and judicial practice of cross-border insolvency in the two places.It also analyzes how the Mainland and Hong Kong should structure the system and cooperation arrangement of cross-border insolvency recognition and assistance in conjunction with the legal documents of the United Nations and the European Union on cross-border insolvency.This paper is divided into four main parts:Chapter 1 mainly discusses the current situation and problems of cross-border insolvency recognition and assistance system between the Mainland and Hong Kong,mainly analyzing the Enterprise Bankruptcy Law of the Mainland and the statutory laws of Hong Kong,as well as the cases of cooperation carried out on the both places,pointing out that both places lack the provisions of statutory laws on cross-border insolvency issues.It is suggested that the problems of cross-border insolvency systems in both places are that the rules established by the Enterprise Bankruptcy Law cannot meet the practical needs,the delay in the development of insolvency cooperation due to the different legal systems of the two places,and the lack of institutional arrangements for cooperation between the two places.Chapter 2 mainly analyzes the legal theory of the cross-border insolvency recognition and assistance system.The early regionalism theory and universalism theory have their own advantages and disadvantages,and they are difficult to adapt to the cross-border insolvency practice in today’s world.The revised universalist theory has become the mainstream of legislation by adopting the advantages of both territorialism and universalism,and has also become the origin of the parallel model and the COMI theory.Article 5 of China’s Enterprise Bankruptcy Law adopts an eclectic approach,which is in essence a combination of universalism of domestic proceedings and modified universalism of foreign proceedings.Chapter 3 focuses on the comparative law research,by analyzing the relevant legislation of the United Nations,the European Union and the United States on the model of main and subordinate insolvency proceedings and the doctrine of COMI,suggesting that the main and subordinate insolvency proceedings are more compatible,can effectively fill the lack of system in China,and are suitable for the actual situation of the two places and can be borrowed by China;The rule of center of main interests in the Pilot Opinions should continue to be improved,and the location of the COMI should be judged by multiple factors.Chapter 4 discusses the construction and improvement of the cross-border insolvency recognition and assistance system in two places,mainly from the aspects of parallel proceedings and jurisdiction,and proposes that the coordination of parallel proceedings in cross-border insolvency in two places should be provided on the basis of the existing system,and special attention should be paid to the coordination of insolvency proceedings under the group and VIE models.The COMI should be the primary standard for jurisdictional review,and the transfer of the COMI should be regulated through the benchmark time,and the place of registration should be the primary entity standard,supplemented by multiple factors such as the location of the main management body and the location of the main property,and a six-month duration and ascertainability should be required for judgment.The two jurisdictions should further improve the cooperation mechanism on the basis of the Minutes of Talks,including the revision of the universalism should become the consensus of the two jurisdictions and harmonize the differences in the determination of COMI.