Baosteel Engineering & Technology Group Co Ltd v. China Zenith Chemical Group Ltd
Read the full judgment text of HCCT 7/2018 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 10 January 2019 before Hon Mimmie Chan J.
Arbitration — Enforcement of arbitral award — Stay of execution pending appeal — Court’s discretionary power — High threshold for leave to appeal discretionary decisions — Severally liable party under award — Set-off claimed by separate legal entity — Whether stay should be granted pending appeal — The plaintiff, Baosteel Engineering & Technology Group Company Limited, sought to enforce an arbitral award against defendant China Zenith Chemical Group Limited who was severally liable under the award. The defendant sought leave to appeal and a stay of execution pending appeal, relying partly on a set-off claimed on the Mainland by an indirect subsidiary, Heihe Longjiang Chemical Company Limited. The Court held the set-off did not affect CZ’s severally liability; the Court should consider the likely delay and consequences of further stays, and that no evidence existed that CZ could not recover amounts from BS if needed. The Court found no just and equitable grounds to grant a stay or leave to appeal given the high threshold and rejected the applications, ordering costs against CZ.
Legal issues: Court’s discretion in granting stay of execution · Whether CZ’s liability under the Award is affected by set-off claimed by HH · Whether the appellant surmounted the high threshold for appeal
Outcome: The summonses for leave to appeal and for the interim stay are dismissed, with costs.
Cited by 1 case · Cites 1 case
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HCCT 7/2018 [2019] HKCFI 120 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTRUCTION AND ARBITRATION PROCEEDINGS NO 7 OF 2018 ______________
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______________ Before: Hon Mimmie Chan J in Chambers (open to public) Date of Hearing: 10 January 2019 Date of Decision: 10 January 2019 ______________________ D E C I S I O N ______________________ 1.The intended appeal is against the exercise of the court’s discretion and as appellant, CZ has a high threshold to surmount. 2.CZ is severally liable under the Award, and BS is entitled to enforce the Award against any available assets of CZ in HK. I cannot see how it can be said that BS is thereby seeking to evade any exchange control in the Mainland. 3.The set-off sought to be asserted against CZ on the Mainland is not asserted by CZ, but by HH a separate legal entity, albeit an indirect subsidiary of CZ. CZ is itself severally liable to pay BS under the Award. 4.The Court is entitled, in deciding whether to grant the stay of execution, to consider the likely overall delay that may be occasioned if the further stay is granted and what may be the likely consequences if a stay is granted. This includes the likelihood of a judgment being issued in the foreseeable future and the likelihood and effect of an appeal against such judgment. I do not agree these are irrelevant considerations. They are particularly relevant when CZ’s stance appears to be that the grant of an initial stay by the Court makes it appropriate to grant further stays (as indicated in Counsel’s skeleton arguments for today), such that the application for stay is likely to be repeated. 5.There is no evidence that CZ would not be able to recover from BS any amount required to be repaid by it to CZ from the Award. 6.The matters referred to in the Notice of Appeal as being relevant to the exercise of the Court’s discretion have all been argued at the hearing, and taken into consideration in the dismissal of CZ’s application for the stay. 7.I cannot see how it can be just and equitable for a stay of execution to be granted and for enforcement of the judgment award to be further delayed in the circumstances of this case. Nor can I see that there are reasonable prospects of success in the intended appeal, to grant leave to appeal. The summonses for leave to appeal and for the interim stay are dismissed, with costs.
Mr Julian Cohen, instructed by FitzGerald Lawyers, for the plaintiff Mr Tony Ko, instructed by Wellington Legal, for the defendant | ||||||||||||||||||||||
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