Read the full judgment text of HCA 2648/2017 on BabelCite. This Court of First Instance judgment was delivered on 30 August 2019 before Hon K Yeung J.
Civil procedure – service out of jurisdiction – Order 11, rule 1(1)(b) – good arguable case on jurisdiction – forum conveniens – material non-disclosure – anti-suit injunction – discharge of interlocutory orders. The plaintiff Chen Hongqing brought an action against some 2,265 employee shareholders and the Jinan Group concerning the beneficial ownership of shares in China Shanshui Investment Company Limited ('CSI') which he alleged he had funded through 11 Representatives acting as his nominees pursuant to an alleged Share Acquisition and Loan Agreement ('SALA'). The SALA, Loan Agreements, Share Pledge Agreements, Share Pledge and Guarantee Agreements, and Sale and Purchase Agreements all contained choice of law clauses selecting Mainland laws. Chen HQ obtained the ex parte Service Out Order from Master Leong in November 2017 and an Anti-Suit Injunction ('ASI') from Deputy Judge To in May 2018, with the To DJ Forum Conveniens Finding that Hong Kong was clearly and distinctly the appropriate forum. The SHDs (1,880 defendants represented by Stephenson Harwood) and the Jinan Group challenged the jurisdiction of the Hong Kong court, while the ASI Defendants sought to discharge the ASI. The court held that the SHDs' and Jinan Group's applications did not constitute a collateral attack or abuse of process, the To DJ Forum Conveniens Finding being interlocutory and subject to reconsideration in light of subsequent developments. On the threshold for the O.11 r.1(1)(b) gateway, following Seaconsar and Deyi, Chen HQ was required to show a good arguable case on the merits of the injunction sought, and he failed to do so because he had run three fundamentally inconsistent cases on the same materials: the Secured Loan Case, the Loan/Conditional Purchase Case, and the Purchasing Agent Case. On forum conveniens, applying the Spiliada real and substantial connection test, the New Zealand Shipping 'clearly more appropriate forum' test, and Dynasty Line, the court held that Chen HQ failed to show Hong Kong was clearly the appropriate forum – the only Hong Kong connection being the involvement of CSI as a Hong Kong company was tenuous, all parties and witnesses were Mainland citizens, all relevant agreements chose Mainland law, and Chen HQ himself had commenced multiple Mainland proceedings on the same dispute. The court also found material non-disclosure in the ex parte application, including failure to disclose the inconsistent cases run on oath, a misleading description of HCMP 962/2017, the choice of law clauses, and the Nominee Arbitrations. The ASI was discharged as an interlocutory order on the basis of material change of circumstances (Chen HQ's subsequent commencement of the 2nd and 3rd Ruzhou Proceedings overlapping with the present action), with the result that the Service Out Order, the concurrent Writ, the service outside jurisdiction, and the ASI were all set aside/discharged. Costs nisi were ordered against Chen HQ for all three summonses with a certificate for two counsel.
Legal issues: Whether the SHD Jurisdiction Summons and Jinan Group Jurisdiction Summons constitute a collateral attack or abuse of process · Whether Chen HQ has a good arguable case for the injunction gateway under O.11 r.1(1)(b) · Whether Hong Kong is the forum conveniens for the trial of the action · Whether there was material non-disclosure in the ex parte application for the Service Out Order · Whether the Anti-Suit Injunction should be discharged
Outcome: SHD Jurisdiction Summons allowed (paras 1, 2 and 4); Jinan Group Jurisdiction Summons allowed (para 1); ASI Discharge Summons allowed (para 1). The Service Out Order and the Anti-Suit Injunction were set aside/discharged.
Cited by 27 cases · Cites 16 cases