Re Guy Kwok Hung Lam [2023] HKCFA 9 (Hong Kong)

The case arose from a bankruptcy order made against the respondent following a creditor’s petition by the appellant. The respondent argued that the debt was disputed and should be resolved by a New York court based on an exclusive jurisdiction clause (EJC) in the contract. 

Ruling on whether the court can decline jurisdiction over a bankruptcy petition if the debt dispute is subject to an EJC, it held that the court's bankruptcy jurisdiction includes determining whether a debt is truly in controversy and whether to grant, dismiss, or stay the petition. Public policy considerations, such as the prevention of frivolous defenses, play a role. However, if the parties have agreed to resolve disputes in another forum through an EJC, the court may exercise its discretion to decline jurisdiction. The court referred to the so-called "Established Approach" of granting bankruptcy orders, wherein a petitioner is ordinarily entitled to a bankruptcy or winding up order if the petition debt is not subject to a bona fide dispute. The court held that the "Established Approach" does not apply in the presence of an EJC, and parties should generally be held to their agreements unless there are significant countervailing factors. Under the "Established Approach"