Read the full judgment text of CACV 611/2018 on BabelCite. This Court of Appeal judgment was delivered on 2 August 2019 before Kwan VP, Cheung JA, Chu JA.
Civil law – bankruptcy – statutory demand – application to set aside under rule 48(5) of the Bankruptcy Rules, Cap 6A – online securities trading – margin trading account – Customer Agreement with arbitration clause – Swiss National Bank unpegging of CHF/Euro on 15 January 2015 causing massive margin deficit – whether website statements on risk management and auto-liquidation constituted actionable misrepresentation – whether alleged representations should be read in context of webpage, Customer Agreement (clause 11, printed in block letters and bold) and Legal Acknowledgment – whether the Customer Agreement and signed acknowledgments negated alleged reliance – whether arbitration clause in clause 33B should be invoked to set aside the statutory demand – Lasmos/Salford approach to insolvency petitions where there is an arbitration clause – whether the three requirements in Lasmos are met, particularly the third requirement that the alleged debtor has taken steps to commence arbitration – whether the Lasmos approach should be adopted in Hong Kong (obiter) – scope of article 8(1) of the UNCITRAL Model Law and section 20 of the Arbitration Ordinance, Cap 609 – whether insolvency petition is an 'action brought in a matter which is the subject of an arbitration agreement' – distinction between insolvency proceedings (class remedy) and ordinary writ action – public policy in not fettering creditor's statutory right to petition – authority of Hollmet, Sky Datamann, Jade Union, Southern Materials, Quiksilver and Jinpeng – discretion to grant short adjournment or undertaking to proceed with arbitration – whether the arbitration clause permits IB to be obliged to select a forum where the customer fails to do so within ten days of notice of intent to arbitrate – interpretation of clause 33B – Securities and Futures (Leveraged Foreign Exchange Trading)(Arbitration) Rules, Cap 571F – appeal dismissed with costs certificate for two counsel.
Legal issues: Whether IB's website representations constituted actionable misrepresentation that would vitiate the Customer Agreement · Whether the third Lasmos requirement (steps to commence arbitration) was satisfied · Whether the Lasmos/Salford approach should be adopted for setting aside a statutory demand (obiter)
Outcome: Appeal dismissed; the statutory demand stands and Mr But's application to set it aside is refused.
Cited by 1 case · Cites 4 cases