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Guangdong High Court Highlights Landmark Mainland-Hong Kong Bankruptcy Ruling

Tue, 13 Oct 2026
Categories: China Legal Trends
Editor: C. J. Observer

In August 2026, the Guangdong High People's Court released 10 guiding cases showcasing the deepened alignment of legal rules and mechanisms across the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). The selected cases highlight critical areas of cross-border judicial assistance, including bankruptcy cooperation and the mutual recognition and enforcement of civil and commercial judgments.

Featured prominently as Case No. 1 is a judicial assistance matter arising from the bankruptcy of Guangdong Overseas Construction Corporation. In April 2020, the Guangzhou Intermediate People's Court formally initiated liquidation proceedings for the company and appointed a bankruptcy administrator. Upon discovering that the debtor held 1.2 million shares in a Hong Kong-incorporated entity, the administrator sought cross-border judicial assistance from the Hong Kong High Court via the Guangzhou court. Notably, although Guangzhou was not among the designated mainland pilot cities under the bilateral insolvency cooperation scheme, the High Court of Hong Kong (Court of First Instance) issued an order in Re Guangdong Overseas Construction Corporation [2023] HKCFI 1340, formally recognizing the mainland insolvency proceedings and conferring operational powers on the administrator in Hong Kong.

The ruling marks a major breakthrough under the May 2021 Record of Meeting on Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings signed between the Supreme People's Court and the Hong Kong SAR Government. Prior to this case, Hong Kong courts had granted recognition to mainland administrators in only two instances—Re HNA Group [2021] HKCFI 2897 and Re Peking University Founder Group [2021] HKCFI 3817—both involving pilot courts. This case represents the third instance involving a non-pilot mainland court.

In its decision, the Court of First Instance clarified that the 2021 bilateral cooperation mechanism and the Hong Kong Department of Justice's Practical Guide serve primarily to establish procedural pathways, affirming that legal reciprocity is not a strict prerequisite for Hong Kong courts to grant recognition and assistance.

The case highlights the growing volume of cross-border litigation in the region: between 2023 and June 2026, courts across the nine mainland GBA cities concluded 81,000 cases involving Hong Kong and Macao interests, accounting for approximately two-thirds of China’s national total.

 

Photo by ダモ リ on Unsplash

Contributors: CJO Staff Contributors Team

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