Read the full judgment text of HCCT 31/2018 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 15 February 2019 before Mr Recorder Eugene Fung SC.
Court injunction — Arbitration Ordinance (Cap 609) s.45 — Mareva injunction in aid of foreign arbitral proceedings — Chabra jurisdiction — Material non-disclosures — Jurisdiction of court — Enforcement difficulties in foreign jurisdiction — Risk of asset dissipation — Injunction discharge. Plaintiffs obtained an ex parte injunction restraining 3rd Defendant from dealing with shares in a Thai company held via complicated transactions involving Defendants 1 and 2 under arbitration in Singapore. The 3rd Defendant and D1–D2 applied to discharge the injunction. The Court found the Plaintiffs made deliberate material non-disclosures at the ex parte stage regarding the limited scope of the Emergency Arbitrator’s order, lack of enforceability of the injunction in Thailand, and Plaintiffs’ lack of assets in Hong Kong. The Court upheld jurisdiction to grant the injunction against the 3rd Defendant. The Court examined the statutory and common law principles on granting interim measures under the Arbitration Ordinance and the exceptional Chabra jurisdiction allowing injunctions against third parties holding assets. The Court accepted there is a good arguable case regarding the amenability of the shares held by the 3rd Defendant to execution of an arbitral award against D1–D2, but Plaintiffs failed to establish a real risk of dissipation of assets and that the injunction is just and convenient to continue, especially given the arbitral tribunal’s own restraining order on disposition of the shares. Consequently, the injunction was discharged and costs ordered against Plaintiffs. The decision underscores the strict duty of full and fair disclosure in ex parte injunction applications, the limits of the court’s powers in enforcing foreign arbitral orders against non-parties, and the careful caution required in granting Mareva injunctions on the Chabra basis in arbitration contexts.
Legal issues: Court's jurisdiction under section 45 of Arbitration Ordinance · Material non-disclosures at ex parte injunction stage · Whether the requirements for Mareva injunction on Chabra basis under section 45 are satisfied
Outcome: The Injunction is discharged.
Cited by 12 cases · Cites 3 cases