Author

Paul Teo

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In Lasmos Ltd v. Southwest Pacific Bauxite (HK) Ltd (02/03/2018, HCCW 277/2017), [2018] HKCFI 426 (“Lasmos“), the Court of First Instance held that a winding-up petition based on a disputed debt may be dismissed if there was an arbitration clause in the underlying agreement, upon which arbitration has commenced.

This decision broadens the traditional ground of dismissal, which previously required the subject company to demonstrate that it had a bona fide defence on substantial grounds to the underlying debt. The decision also clarifies the circumstances where winding-up proceedings will prevail.