Chow Steel Industries Public Co Ltd and Others v. Ko Sung and Others

HCMP 2711/2017

[2020] HKCFI 483

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2711 OF 2017

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Before:  Hon K Yeung J in Chambers

Dates of Hearing: 24-25 July 2018

Date of Decision:  26 March 2020

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DECISION

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A.  Introduction

1.This is the hearing of:

(a)  the Summons by the Plaintiffs (the “Continuation Summons”) for continuation of a Mareva injunction it first obtained ex parte on 15 December 2017 (subsequently continued twice on 22 December 2018 and 19 January 2018, on the latter date with some minor variations) (the “Injunction”).  It was obtained by the Plaintiffs pursuant to sections 21L and 21M of the High Court Ordinance in aid of certain proceedings in Thailand (the “Thai Action”); and

(b)  the Summons (the “Discharge Summons”) by the Defendants for discharge of the Injunction.

2.The main issues are whether the Plaintiffs have a good arguable case against the Defendants, whether risk of dissipation has been demonstrated, and whether there has been material non‑disclosure by the Plaintiffs.

B.  The affirmatory evidence

3.The Plaintiffs (“P1”, “P2” and “P3”) in support of the Continuation Summons rely on:

(a)  the 1^st, 2^nd 3^rd, 4^th and 5^th affirmations of Anavin Jiratomsiri (“AJ”, and “AJ/1^st”, “AJ/2^nd”, “AJ/3^rd”, “AJ/4^th” and “AJ/5^th” respectively), and

(b)  the 1^st affirmation of Pundawish Chatmongkolchart (“PC”, and “PC/Aff1”) exhibiting his 1^st and 2^nd expert reports (“PC/Rep1” and “PC/Rep2” respectively) and PC’s 2^nd affirmation (“PC/Aff2”).  PC is the Plaintiffs’ expert on Thai law.

4.The Defendants (“D1”, “D2” and “D3”) in opposition of the Continuation Summons and in support of the Discharge Summons rely on:

(a)  the 1^st, 2^nd, 3^rd, 4^th and 5^th affirmations of Ko Sung (“D1”, and “D1/1^st”, “D1/2^nd”, “D1/3^rd”, “D1/4^th” and “D1/5^th” respectively);

(b)  the 1^st, 2^nd, 3^rd and 4^th affirmations of Wong Shun Cheung (“D2”, and “D2/1^st”, “D2/2^nd”, “D2/3^rd” and “D2/4^th” respectively); and

(c)  One expert report each of Chakpapong Boonchan (“CB” and “CB/Rep”), and Kobkiat Tananchaya (“KT” and “KT/Rep”), CB and KT being the Defendants’ experts on Thai law.

All the evidence, together with submissions, make up more than 20 box files.

C.  The background facts and the parties’ cases

5.P1 is listed on the Stock Exchange of Thailand. It is in the business of retail and wholesale of steel.  There are a number of companies within its group (the “Chow Group”).  P2 is one of them, which is a direct subsidiary of P1, and is in the business of the production and distribution of electricity, electrical energy, fuels, coal and other products to generate electricity.  P3 is a subsidiary of P2.  It is in the business of pursuing international investments in alternative energy.

6.Both D1 and D2 are Hong Kong permanent citizens.  Both are in the solar power business.  D3 is a private company incorporated in Hong Kong.  It has been solely owned and controlled by D1.

7.According to the evidence before me, the parties differ as to the exact relationship between the Defendants and the Plaintiffs:

(a)  the Plaintiffs say:

(i)  In early 2012, the Chow Group (including P1 and P2) was interested in investing in the renewable energy section.  P3 was established as one of the entities to carry out the proposed investments.  P3 hired D1 and D2 to manage its business development;

(ii)  Specifically in respect of D1, he was between 5 September 2013 and 5 August 2015 P3’s managing director, and from May 2015 till 29 April 2016, also a director and the chief operating officer of P2;

(iii)  Specifically in respect of D2, he was between 1 June 2015 and 29 April 2016 a director of Premier Solution Japan KK (a company in the Chow Group) and one of D1’s subordinate; and

(iv)  Specifically in respect of D3, it was a company solely owned and controlled by D1 and used by him as a vehicle to perpetrate an international fraud against the Chow Group;

(b)  the Defendants say that they were not employees but in fact partners working in collaboration with the Plaintiffs.

8.The Plaintiffs’ case for the Injunction, as summaried by AJ at §5 of AJ/1^st is that:

“ The Plaintiffs’ seek a domestic Mareva injunction in support of the Thai Action, in which the Plaintiffs claim THB753,967,853 (approximately HKD177,000,000 ...) against the Defendants (amongst others, jointly and severally) under Thai tort law. In brief, the Plaintiffs’ claim against the Defendants in the Thai Action is for damages suffered as a result of the unauthorized disclosures of the Plaintiffs’ confidential information by the Defendants (together with the other defendants to the Thai Action) to the Plaintiffs’ competitors. Such unauthorized disclosures were of (among others) legal due diligence reports commissioned by the Plaintiffs in respect of various investment projects that the Plaintiffs had been assessing in detail. Upon such unauthorized disclosures, the Plaintiffs’ competitors invested in those projects, thereby usurping the Plaintiffs’ investment opportunities in the same, and causing loss and damage to the Plaintiffs.”

9.The competitor to whom D1 and D2 are alleged to have disclosed confidential information was Eastern Printing House Public Company (“EPCO”), also a public company listed on the Stock Exchange of Thailand.

10.The Thai Action is an action started in Thailand by the Plaintiffs before the Central Intellectual Property and International Trade Court (the “Thai Court”) against, amongst other parties, D1 and D2. The following paragraphs from PC/Rep1 sufficiently summarize the Plaintiffs’ claims in the Thai Action:

“ 5.  This legal opinion is prepared based on the civil case of Black Case No. Kor Khor 82/2559 at Central Intellectual Property and International Trade Court, Kingdom of Thailand (the “Thai Action”) claiming damages of THB753,967,853 (approximately HK$177 million) against [D1] (as Defendant No. 3 in the Thai Action) and [D2] (as the Defendant No. 7) and others.

6.  As will be discussed below, the Thai Action is a claim in tort in respect of the disclosure of the trade secrets and confidential information to third parties.

7.  I am instructed that the Plaintiffs were conducting pre-investment studies on solar cell energy plants.  Namely, these included the Fukui (Skirakata) 1, Fukui (Skirakata) 2, Fukui (Skirakata) 3, Kyotamba and Iwate projects of Plaintiff No. 3 (the “Japanese Projects”). In conducting these studies, the Plaintiffs commissioned studies on the legal status, analysis, feasibility study of the project on engineering, return on investment and investment structure and other relevant information (the “Confidential Information”).  Between 12 March 2013 and 16 November 2015, the defendants to the Thai Action — including the Defendants and acting on the instructions of the 1^st Defendant Alex Ko — infringed on the Plaintiffs’ confidential information by disclosing the information to third parties including East Printing House PCL and Mr Yuth Chinsupakkul (the “Third Parties”, who are also the 1^st and 2^nd defendants in the Thai Action).  The infringement was by way of emails sending the Confidential Information to the Third Parties and without consent from the three Plaintiffs.

8.  In the above circumstances, the Plaintiffs commenced the Thai Action claiming damages of 753,967,853 baht (approximately HK$177 million) against the Defendants, who also have outstanding arrest warrants issued by the Court of Justice, Kingdom of Thailand against them, and others.

...

10.  The torts were committed by the Defendants in Thailand and damage was suffered in Thailand. Accordingly, the cause of action arose in Thailand and the Thai court has jurisdiction over the Thai Action...

...

12.  As a matter of Thai Law, in order for the Plaintiffs to succeed in the Thai Action, the Plaintiffs need to show that:

(a)  The Confidential Information were trade secrets within the Trade Secrets Act B.E. 2545 (“Trade Secrets Act”) or that the Confidential Information were copyrighted literary work within the meaning of the Copyright Act B.E. 2537 (1994) (“Copyright Act”);

(b)  The Defendants infringed on the Plaintiffs’ trade secrets under the Trade Secrets Act or the copyrights under the Copyright Act; and

(c)  By the above infringement, the Defendants willfully or negligently injured the property and/or rights of the Plaintiffs and hence have committed a wrongful act under the Thai Civil and Commercial Code and are liable to make compensation.

...

36. As stated in the Complaint[1], the total amount of damages claimed is 753,967,853 baht (approximately HK$177 million) against the Defendants and other ‘jointly or on behalf of each other’.  Under Thai law, this means that the Plaintiffs may claim against any one of the defendants in the Thai Action for the full amount.  As set out in paragraph 4 of the Complaint, the amount claimed is broken down as follow:

(a)  Loss of reputation.  The Third Parties (ie the Defendant No.1 to the Thai Action) had claimed ownership of three projects in Japan, namely the Kyototango, Oita and Toshiki projects.  This caused the Plaintiffs to lose business reputation among their lenders and their investors.  This was because the Plaintiffs had already confirmed their investments into these projects and were in the process of securing the relevant financing.  However, upon the disclosure of confidential information relating to these projects, ... the Plaintiffs received queries from its lenders as to whether it was selling the very assets it was attempting to secure financing for.  Further, the Plaintiffs suffered reputational loss in the market because it appeared that the Plaintiffs were selling its Japanese assets while the Plaintiffs held themselves out as expanding in Japan.  The Plaintiffs thus claim 15,000,000 baht for these damages, being 5,000,000 for each project.

(b)  Loss of Profits. ...I am instructed that:

(i)  the Third Parties have terminated the agreements in relation to their investment into the Fukui (Shirakata) 1‑3 and the Iwate projects;

(ii)  the Plaintiffs have re‑taken up the investment opportunities in relation to the Fukui (Shirakata) 1 and 2 projects, and the loss of profits claimed in relation to the Fukui (Shirakata) 1 and 2 were  THB69,470,000 and THB45,120,000 respectively;

(iii) No loss of profits is claimed in the Thai Action in relation to the Fukui (Shirakata) 3 Project; and

(iv) The Plaintiffs but were unable to invest in the Iwate project because of certain exclusivity agreements entered into by the Japanese parties to the Iwate project; and

In the above circumstances — while acknowledging that the exact quantum of damages awarded is a matter for the Thai court in exercising its discretion in the  manner as outlined above — the Thai court is likely to award the damages claimed ... However, this is [sic] amount of damages awarded is likely to be  reduced to    THB639,377,853 (ie approximately HKD153,059,428.82, representing a reduction of THB114,590,000 from the THB753,967,853 claimed) to reflect the fact that the Plaintiffs have re‑taken up the investment opportunities in relation to the Fukui (Shirakata) 1 and 2 projects.     

(c)  Financing costs.  The Plaintiffs had to pay interest and fees on procuring a loan in preparation for investing into the projects, which amounted to 10,818,753.26 baht.  As these were costs incurred directly for the Plaintiffs to prepare to make these investments, these were costs that were wasted because of the Defendants' infringement and therefore likely to be allowed by the Thai court.

(d)  Transaction due diligence costs.  The Plaintiffs had to incur expenses ... to conduct legal due diligence ... to study the investment structure ... as well as ... to study the business structure on investment and tax payment in Japan ... The total costs amounted to 8,359,100 baht.  As these were costs incurred directly for the Plaintiffs to prepare to make these investments, these were costs that were wasted because of the Defendants’ infringement and therefore likely to be allowed by the Thai Court.

(e)  Tax due diligence costs.  The Plaintiffs had to hire a   consultant to structure the investment to be consistent with the policy on tax and international accounting standards and incurred costs of 3,000,000 baht.  As these were costs incurred directly for the Plaintiffs to prepare to make these investments, these were costs that were wasted because of the Defendants’ infringement and therefore likely to be allowed by the Thai Court.  

(f)  Other expenses.  The Plaintiff had to pay the expenses incurred in salary expenses, travel expenses and other expenses associated with running an electrical energy business in Japan for a minimum of two years ... The expenses incurred were at least 100,000,000 baht the Plaintiffs claim compensation of 50,000,000 baht.  As these were costs incurred directly for the Plaintiffs to prepare to make these investments, these were costs that were wasted because of the Defendants’ infringement and therefore likely to be allowed by the Thai Court.

37. Ultimately, whether the amount of damages claimed is allowed is a matter for the Thai Court in them [sic] Thai Action (and the Hong Kong court in the injunction application).  However, in light of the above, my opinion is that the total amount of damages claimed by the Plaintiffs in the Thai Action is reasonable and justified in the circumstances of the case.”

11.The Defendants’ case in the Thai Action is that:

(a)  Between 2008 and 2013, D1 was vice president of sales and marketing in SUNGEN International Limited (“Sungen International”). He first met D2 in 2008 when they were colleagues at Sungen International;

(b)  D1’s main areas of responsibility at Sungen International involved sales and marketing of solar power stations and projects and product development.  He said that in the course of sourcing for investors in solar projects, the investors would need the project information including the due diligence reports, financial models and feasibility studies to understand and consider the projects offered to them.  He said further that such information was regularly circulated to potential investors in order to solicit interest;

(c)  Some time in 2013, AJ became interested in investing in the renewable energy (or solar energy) market through the Chow Group.  He was particularly interested in the Japanese market.  The solar energy industry is a niche market and the Chow Group did not have the necessary contacts or expertise.  D1 said that he was happy to and did talk to AJ extensively about the industry and shared with him his experience;

(d)  Upon such discussions, D1 and AJ decided to cooperate by setting up a new company adopting a business model similar to that of Sungen International’s.  That new company turned out to be P3.  D1 said[2] that:

“ 30. I should mention that in actual operation of the new company (which turned out to be [P3], unfinished projects have been sold to other investors (i.e. power stations that are not yet commercially operationally to generate electricity) since [P3] is constantly operating under tight cashflow with heavy debt and needed the income to finance other projects.

31. More importantly, [AJ] clearly understood that I would — in addition and on the side of working on the business of this new company, which turned out to be [P3] — continue to operate my own separate businesses, which I have been carrying on since I left Sungen International. Relevant for present purposes, one of the lines of my separate business focuses on the initial development stage in developing projects from scratch until they reach the ‘ready to build’ stage or the RTB stage. Since my separate business focuses on the earlier stages of the development process of a typical solar energy station whereas the new company, which turned out to be [P3], would focus on the later stages, my separate business and the business of the new company would — and in fact did — compliment and benefit from each other.

32. In other words, [AJ] and I were very clear that my collaboration with the Chow Group and my involvement with the new company to be set up was never meant to be exclusive in the sense that I would be entitled to continue with my own separate business. In other words, I would be a partner in business with the [Ps].

...

41. ... [P3’s] business model enabled it to earn profit in 2 ways: first by proffering development and construction services for projects in return for a fee and second, profit from onselling projects to investors. Under this business model, [P3] was not a long term investor and therefore did not hold completed or fully functional projects meaning that it did not earn profit from selling electricity. ...

...

44. ...The due diligence reports and feasibility reports were important to attract potential external investors. As I have mentioned ... above, as part of [D2’s] and my daily work, we would be provided with due diligence reports, feasibility reports as well as other information of various projects from various developers or sellers who want to attract investors or buyers for their projects. Similarly when [AJ] authorized me and [D2] to sell or market a project held by [P3], [D2] and I would send such reports to [Chow International Co Ltd] as well as to potential external investors, who, if interested by what they saw in our reports, would commission their own due diligence reports and feasibility reports before making an ultimate decision whether or not to invest in or acquire a project held by or developed by [P3].

45. As I have mentioned ... above, [P3] would earn a fee or a profit ... from the sale of a project.

46. I do not understand why the Plaintiffs are now claiming that [D2] and I have released confidential information to trade secrets, when all along that has been our trade practice and was indeed the modus operandi of [P3’s] business model for the purpose of selling or marketing projects held or developed by it ...”

(e)  In about May 2014, D1 asked D2 to join him in his cooperation with the Plaintiffs.  D2 agreed;

(f)  In respect of the Thai Action, D1 said[3] that the Thai Action is unsustainable and have at any rate been substantially “drummed up”.  He summarized his position as follows:

“ 51.1  I did not have an employment relationship with any of the Plaintiffs. I was in fact a partner who helped them to develop their solar energy line of business.

51.2  Neither [D2] nor I disclosed any confidential information and/or trade secrets and/or copyright works belonging to the Plaintiffs. In particular, I shall discuss each of the 24 emails that form the basis of the Plaintiffs’ claim.

51.3  EPCO was in fact a long term customer of [P3] and information was regularly disclosed or disseminated by [P3] to it as part of the ordinary course of business of [P3].”

He also said that the Plaintiffs have substantially “drummed up” the quantum of their claims in the Thai Action.

D.  Defendants’ grounds for discharge

12.Mr Anthony Chan appeared for the Defendants.  The grounds he put forward[4] for discharge of the Injunction are:

“ 1. No real risk of dissipation of assets...

2. [Plaintiffs] have no good arguable case...

3. Injunction constitutes an abuse of process...

4. Balance of convenience is firmly in favour of discharge...

5. [Plaintiffs’] material non-disclosure...

6. Unjust and inconvenient to grant or continue injunction in the context of section 21M...”

13.In the course of his oral submissions, he informed me that the main emphasis of his submissions was on grounds 1 and 5 (absence of risk of dissipation and material non‑disclosure). 

14.I will consider the grounds in turn below.

E.Legal principles applicable to applications under s 21M 

15.The principles applicable upon an application for injunctive relief in aid of foreign proceedings pursuant to s 21M of the High Court Ordinance are not in dispute.  They have been authoritatively stated by the Court of Final Appeal in Compania Sud Americana de Vapores SA v Hin‑Pro International Logistics Ltd (2016) 19 HKCFAR 586 (at §§47 to 56).  A 2‑stage approach has been propounded:

(a)  The first stage, as summarised by the Lord Philips NPJ, at §53 involves the following considerations:

“ ... in s. 21M proceedings the court has first to consider whether, if the plaintiff succeeds in the primary jurisdiction the resultant judgment is one that the Hong Kong court will enforce. If the answer to that is yes, the court has to form a view, on all the available material, including any findings of the foreign court itself, whether the plaintiff has a good arguable case before the foreign court and whether there is a real risk that the defendant will dissipate his assets if the Mareva is not granted.”

(b)  The second stage as set out by Lord Philips NPJ at §54 is as follows:

“ The second stage of consideration of a s. 21M application requires the court to consider whether the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned makes it ‘unjust’ or ‘inconvenient’ for the court to grant the application. Mareva relief is discretionary in any event, but this provision in s. 21M(4) underlines the fact that the court has a wide discretion to refuse to make the order sought if the fact that the substantive claim is being litigated in a foreign court has consequences that make the grant of a Mareva ‘unjust’ or ‘inconvenient’.”

16.I will apply that 2‑stage approach when considering the 2 summonses before me.

F.  Whether any eventual judgment in the Thai Action enforceable in Hong Kong

17.Mr Chan does not dispute the enforceability of any eventual judgment which the Plaintiffs might successfully obtain in Thailand.

18.I accept the submissions of Mr Chua, Senior Counsel for the Plaintiffs, that any eventual judgment that the Plaintiffs may obtain in the Thai Court will be enforceable in Hong Kong.  The Thai Court has jurisdiction over the Thai Action[5]. While it is possible that any eventual judgment from the Thai Court in the Thai Action may be subject to appeal, that possibility does not prevent the judgment from being final and conclusive[6]. I also do not see at this stage that there has been or would be any substantial injustice.    

G.  Whether good arguable case

G.1.  SOME RELEVANT LEGAL PRINCIPLES

19.I state first of all a number of relevant principles:

(a)  In the context of an application under s 21M of the High Court Ordinance, the question is whether the plaintiff has a good arguable case in the foreign court — see Compania, per Lord Phillips NPJ at §§52 and 53;

(b)  In considering whether or not a good arguable case has been made out:

(i)  it is necessary to consider both liability and quantum — see Ming Hsieh v Xu Zhe and Others (unrep, CACV 189/2015, 28 September 2016, per Barma JA at §11);

(ii)  However, no mini‑trial should be conducted.  The warning given by Parker LJ in Derby & Co Ltd v Weldon [1990] 1 Ch 48 at p 58 should be heeded, that:

“ What, however, should not be allowed is (1) any attempt to persuade a court to resolve disputed questions of fact whether relating to the merits of the underlying claim in respect of which a Mareva is sought or relating to the elements of the Mareva jurisdiction such as that of dissipation or (2) detailed argument on difficult points of law on which the claim of either party may ultimately depend.”

(iii) As summarized in The Hong Kong Civil Procedure 2020 (at §29/1/66):

“ The existence of a good arguable defence does not necessarily negate a good arguable case ... and there is no requirement that the plaintiff show he has a much better case than the defendant.”

G.2.   THE COMPETING EXPERT REPORTS

20.There are before me competing expert reports prepared on behalf of the parties.  Whilst I cannot and ought not conduct a mini‑trial at this stage, I need to consider those reports to decide whether the Plaintiffs have managed to establish a good arguable case.

21.When first adduced, the expert opinions were not adduced by way of affirmations.  The Plaintiffs did so by way of 2 reports exhibited respectively in AJ/1^st and AJ/4^th, whereas the Defendants sought to rely on 2 letters of advice by Siam Premier (the “Siam Premier Letter”) and ES Counsel (the “ES Counsel Letter”) and exhibited in D1/4^th and D1/5^th respectively. 

22.In respect of the reports prepared by PC, though not in affirmatory form, they contained declarations by PC that he had read the Code of Conduct by Expert Witnesses and understood his overriding duty to help the Court impartially and independently.

23.However, in respect of the letters of advice which the Defendants sought to rely upon, not only were there no such declarations:

(a)  in respect of the Siam Premier Letter, the authors stated at §2 that:

“ In this regard, we have provided our opinion on a no‑liability basis in deciding what we believe is likely to be materially relevant to be considered by the Court.”

(b)  in respect of the ES Counsel Letter, the authors made a “Disclaimer” at Section IV of the letter in the following words:

“ 26. Our legal opinion is made solely from the Thai law perspective and based on the limited information provided to us. As a result, it could be subject to further change should there be any additional information available to us.

27. It is also important to note that part of our analysis is based on the interpretation of the Supreme Court’s judgments which are not the law and subject to change.

28. This legal opinion is addressed to [D1] as per the request of Ms. Rattanaporn Choklap and not to be transmitted to anyone else nor is it to be relied upon by anyone else or quoted or referred to in any public document or filed with anyone without our prior written consent.”

24.Subsequently, CB/Rep was filed.  Whilst §2 in the Siam Premier Letter has been removed and a declaration inserted, CB/Rep is, I have been informed by Mr Chua, word for word the same as the Siam Premier Letter.

25.Similarly, in the KT/Rep subsequently filed, whilst the section containing the Disclaimer has been removed, it is, again I have been informed by Mr Chua, word for word the same as the ES Counsel Letter.

26.The above history relating to the filing and preparation of the CB/Rep and KT/Rep gives rise to concern that CB and KT have simply adopted the contents of the Siam Premier Letter and ES Counsel Letter (neither of which contains any expert declaration) without any independent and impartial consideration of their contents.  In this regard, I accept Mr Chua’s submissions that whilst such history will not render the CB/Rep and KT/Rep inadmissible, it adversely affects their weight.  I bear this in mind when I consider the competing expert evidence below.

G.3.   WHETHER A GOOD ARGUABLE CASE ON LIABILITY

27.I consider first of all the question of liability.

G.3.A WHETHER DS EMPLOYEES OR PARTNERS

28.As I have mentioned above, on the evidence before me, parties differ as to the exact relationship between the Plaintiffs and Defendants.  However, at the outset of his oral submissions, Mr Chan informed this Court that for the purpose of these applications, he was no longer taking the points as to whether D1 and D2 were employees of the Chow Group and whether they owed their employers any duty of confidentiality. 

29.Quite independent of Mr Chan’s stance, and in any event, given:

(a)  the existence of written employment agreements signed by D1[7] and D2[8],

(b)  the contents of certain public announcements of P1 describing D1 as “the Managing Director and/or Executive” of and P3,

(c)  certain previous payment of salaries to D1, and

(d)  the fact that D1 and D2 had, relying upon the ground that they were employees of the Chow Group, attempted (though unsuccessfully) to transfer the Thai Action from the Thai Court to the Central Labour Court,

I agree with Mr Chua[9] that the Plaintiffs have a good arguable case that D1 and D2 were in fact employees of the Chow Group.

G.3.B  WHETHER THE INFORMATION ALLEGEDLY DISCLOSED “TRADE SECRETS” OR “COPYRIGHTED”

G.3.B.I  THE EXPERT EVIDENCE

30.According to the Plaintiffs’ case, the documents disclosed by the Defendants which formed the subject‑matter of the Thai Action (the “Relevant Information”) included (1) legal due diligent reports, (2) P3’s financing term sheets, (3) financing and tax structuring methodologies, and (4) signed term sheets between P3 and the seller of the Oita Project. 

31.PC first dealt with the issue as to whether the Relevant Information was trade secrets or copyrighted materials in his PC/Rep1[10].  He stated, relevantly, that:

“ 18. First, the Confidential Information are the Plaintiffs’ trade secrets in accordance with section 3 of the Trade Secrets Act because:

(a) The commercial value of the Confidential Information derives from its secrecy in that the Plaintiffs were relying on the Confidential Information to decide whether or not to invest into the Japanese Projects. Such information included legal due diligence reports and the Plaintiffs’ internal analyses of the feasibility of the project. If the Confidential Information were to become known to third parties, the investment opportunity may be usurped. Further, if the third parties had access to the Confidential Information without having to incur the time and expenses to obtain or produce the same on their own, the third parties would be able to usurp these opportunities at a more competitive price.

...

23. The Confidential Information, which includes various reports and other documents, is copyrighted work which the Plaintiffs legally acquired from their respective authors.  The Defendants, who knew or should have known that the Confidential Information is the copyright of the Plaintiffs, sent and disclosed the Plaintiffs’ copyrighted documents to the Third Parties.  In doing so, the Defendants have clearly infringed on section 27 and 31 of the Copyright Act at least by distributing the Confidential Information to the Competitors, which caused damage to the Plaintiffs, the copyright owner.”

32.CB and KT expressed the views that the Relevant Information did not qualify as trade secrets.  Points were made:

(a)  at §§28 and 30.2 of the CB/Rep, that:

“ 28. The trade secrets which the Plaintiffs claimed to have been disclosed by the 3^rd to 8^th Defendants[11] by emails from 12 March 2014 to 16 November 2015 are attached to the [Complaint] ... I do not consider that they are trade information not yet known to public or not yet accessible by persons who are normally connected with the information nor do I found commercial value deriving from the secrecy of these information.

...

30.2 Other information contains financial analysis, feasibility studies, projection for return of investments.  Such analysis was made based on the general information given by the project owner/seller and it appears that these types of analysis can be performed by any legal/financial advisor who have access to the general information even though they may come up with a different analysis and result. I therefore view that the analysis does not contain any information that should be considered as secret information of the projects.  Furthermore, they are not considered as valuable information as I understand that investors will engage their own independent consultant to conduct their own risks analysis before deciding in the projects.”

(b)  in the KT/Rep, that:

“ 5. Financing term sheets are a document to be issued by a bank to a borrower (non‑binding agreement), which describes details of the borrowing, e.g., amount of loan, security, repayment schedule under the agreement or fees, etc. Such details are not the trade secrets as defined by the Trade Secrets Act since they have no commercial value from its secrecy. This is because, the knowledge of competitors and/or third parties about the Plaintiffs’ borrowing shall in no way affect the survival of the Plaintiffs’ business, their benefits or market share and/or give rise to any advantages or disadvantages between the Plaintiffs and their competitors, since the amount of loan, security and/or any terms of borrowing by each borrower’s bank depends on its assets, liquidity and financial position.

...

9. ...such information [contained in the financing and tax structuring methodologies] is accessible and generally known by those in tax industry, staff of KMPG and PwC, or even other companies outside the Plaintiffs’ industry ... Therefore, the financing and tax structuring methodologies are publicly known or accessible by persons who are normally connected with the information and shall not be considered as trade secrets.

10. The signed term sheets between [P3] and the seller of the Oita project merely represent such terms and conditions proposed by the seller of the Oita project to [P3], which are known to the seller itself.  Moreover the said signed term sheets are not a final binding agreement as both parties were required to enter into the definitive agreement later...”

33.In reply, PC in his PC/Rep2 dealt with the issue in greater details:

(a)  In respect of the legal due diligent reports, he stated that:

“ 23. Legal due diligence reports and analyses (including technical or other analysis) of the feasibility of potential investments can fall within the definition of ‘trade secrets’ under the Trade Secrets Act.

24. [P3] commissioned its Japanese legal counsel to gather and summarize all relevant information, analyze them and advise on the feasibility of the specific investment opportunities. It is clear, therefore, that these reports possess the necessary quality of commerciality ...

25. Even though each piece of information within these reports may have been obtained from publicly available sources, these reports show the skill, labor and judgment applied to coherently present the information, and such reports set out an opinion on the basis of the information. Therefore, these reports clearly possess the necessary quality of confidence, and are clearly beyond the realm of public known or accessible information.

26.  The legal due diligence reports are themselves held out as confidential documents ...”

(b)  In respect of P3’s financing terms, he stated that:

“ 29. The contents of these financing term sheets are clearly not publicly known or accessible, because the financing terms and conditions are bespoke for the Plaintiffs, and which the Plaintiffs had to negotiate for. Therefore, these term sheets clearly possess the necessary quality of confidence. Further, the term sheets themselves express [sic] stated that they are ‘not [to] be disclosed to any third party without the Lender’s prior written consent’.”

(c)  In respect of the financing and tax structuring methodologies, he stated that:

“ 32. It is again clear that the advice which [P3] received PwC and KPMG are bespoke for [P3] and provided to [P3] for valuable consideration ...

33.    The commercial value which derives from its secrecy is that such advice is ultimately an expert’s advice, rendered to [P3] for a fee, on how [P3] can properly reduce its financing and tax costs.  If such advice was disclosed to [P3’s] competitors, its competitors would have obtained such valuable information for free.” 

(d)  In respect of the signed term sheets between P3 and the seller of the Oita Project, he stated that:

“ 35. These term sheets contain bespoke terms for [P3] after negotiations, and reveals [P3’s] actual costs in acquiring the solar project. As such, these quotations are clearly not publicly known or accessible, and they clearly possess the necessary quality of confidence. [P3] will be incapacitated from applying its usual mark‑up when its customers are aware of its actual costs ...”

34.I am not impressed by the views of CB and KT.  I find the sweeping opinion made by CB in §28 of CB/Rep not supported by any reasoning.  I also find CB’s opinion at 30.2 argumentative and strained.  I am particularly unimpressed by KT’s view that financing term sheets are not trade secrets because “the knowledge of competitors and/or third parties about the Plaintiffs’ borrowing shall in no way affect the survival of the Plaintiffs’ business” (emphasis added), when no explanation has been given as to why the survival of the Plaintiffs’ business would need to be affected before the Relevant Information might be regarded as trade secret.  I find it quite inconsistent with commercial sense that documents like feasibility reports, financial term sheets or even signed sale term sheets are not trade secrets.  I also see good sense in PC’s view expressed in §25 of PC/Rep2 in relation to the skills, labor and judgment need to be applied when presenting publicly available materials.

35.I agree with Mr Chua’s submissions that the relevant views of CB and KT are argumentative and lack commercial reality.

36.I also bear in mind the matters discussed in Section G.2. above which, while not determinative, adversely affect the impartiality and independence of the Defendants’ experts.

G.3.B.II THE 24 EMAILS, AND DISCUSSION

37.At §51.2 of D1/4^th (which I have reproduced above), D1 mentioned 24 emails (the “Emails”) which he said form the basis of the Plaintiffs’ claim in the Thai Action (ie wherein or whereby the Relevant Information was alleged to have been disclosed).  They are those emails which D1 was able to identify from the Complaint.  He produced them as “KS‑13”, which comprises together with attachments some 540 pages. He then, with the aid of a 19‑page schedule attached to D1/4^th [12], gave some details evidence on the Emails.  He said at §67 of D1/4^th that:

“ As will be demonstrated in the explanation set out in more details in Schedule 1, the information contained in the Emails was neither confidential nor trade secrets/copyright works. Indeed, I also note that many of the Emails are not relevant to either the Loss of Reputation Claim Projects or Loss of Profit Claim Projects which the Plaintiffs are claiming against me (and other defendants) in the Thai Action. Furthermore, many of the Emails were in fact sent to [D2] and/or me so we could not have been disclosing the Plaintiffs’ information at all.”

38.Mr Chan picked up on those materials and in his written submissions undertook a detailed analysis of the Emails, leading to his submissions, amongst others that:

“ 66. Close to half of the [Emails] are, even on a cursory glance, plainly irrelevant to the Thai Action ...

...

85. ... email 6 was sent in the ordinary course of P3’s business and the term sheet from Tokyo Star Bank attached to that email was not confidential.

...

87. As for email 3, email 4, email 5 and email 12:

87.1. The documents attached therein were circulated to solicit EPCO’s interest as part of D1’s and D2’s modus operandi in respect of P3’s business. In particular, the due diligence report commissioned by P3 would be helpful material to solicit investment interest ...

87.2. Indeed, Ps accept that (a) D1 and D2 would source potential projects for P3 to invest in or source for potential investors or buyers for projects and (b) P3 would offer its services to investors or buyers to develop and construct projects in return for a fee.

87.3 Therefore, D1 and D2 plainly had, and it was necessary for them to have, authority to do what they did and any suggestion otherwise is plainly wrong.

87.4. Notably, D1 was the managing director of P3 from 5 September 2013 to 5 August 2015. P3’s board of directors had delegated or granted its authority to D1 qua managing director and therefore he had the necessary authority.

87.5. Put differently, in doing what they did, D1 and D2 were acting with consent and according to ‘honest trade practice’, which would not constitute infringement of trade secrets under Thai Law.

...”

39.One notes from the above that the Defendants are not seriously disputing that they have disclosed the Relevant Information to some EPCO.  Their principal stance is that the Relevant Information is not trade secrets or copyrighted works.

40.On that issue, and for the purpose of these applications, I do not find the detailed analysis of the Emails undertaken by D1 and Mr Chan useful.  No mini‑trial should be conducted.  Mr Chan on a number occasions suggested that even a cursory glance of those Emails would lead to firm conclusions favourable to his clients.  I do not agree.  The Emails need to be understood and interpreted in detail, and in the context of any practice, business model and modus operandi as alleged by the Defendants.  They are facts sensitive. Credibility of witness will be in play.  As submitted by Mr Chua[13], which submissions I accept:

“ By his arguments, [D1] seeks to demonstrate the [Emails] did not contain any ‘trade secrets’ or ‘copyrighted work’. For this Court to determine whether the [Emails] contained any confidential information, requires an in‑depth analysis of inter alia: (i) the Plaintiffs’ business model, (ii) the relationship between the Plaintiffs, their employees, and the counterparties to the [Emails], (iii) understanding each project mentioned in the [Emails], (iv) in respect of the legal due diligence reports, an analysis of the information and advice contained, (v) in respect of other advisory reports, an analysis of the nature of the advice and whether such advice is capable of constituting ‘trade secrets’. Such an analysis is a matter for the Thai Court.”

41.Whether the information said to have been disclosed are trade secrets or copyrighted works are issues the resolution of which would involve consideration of the relevant Thai Acts and detail analysis of the facts.  At this stage, what I am required to consider is whether the Plaintiffs have established a good arguable case that they are.  I have considered the nature of the materials and information concerned.  I have considered PC’s expert evidence.  I have considered the reasons he has given in support of his conclusions.  They in my view make good commercial sense.  As I have mentioned above, I am not impressed by the opinions of the Defendants’ experts.  They are at best possible arguments which the Defendants may run before the Thai Court.  They do not negate a good arguable case.  Overall, I am of the view that the Plaintiffs have established before me that they have a good arguable case before the Thai Court that the Relevant Information are trade secrets or copyrighted materials.

G.3.C WHETHER EPCO A COMPETITOR

42.Another issue which the Defendants have raised is that EPCO was not a competitor of the Chow Group, but had been a long term customer of its.

43.I have considered both D1 and AJ’s evidence in this regard.  This is clearly a matter for trial.  On the evidence before me, I am satisfied that while EPCO might have been P3’s customer in respect of one project  (namely Kurihara Project)[14], the Plaintiffs have shown a good arguable case that it otherwise was a business of the Chow Group. 

G.3.D    CONCLUSION ON THIS ISSUE

44.For the reasons set out above, and given the evidence before me, I am of the view that the Plaintiffs have established before me that it has a good arguable case on liability (in the sense that the Defendants have without the consent of the Plaintiffs disclosed the Relevant Information (which are trade secrets and copyrighted materials) to EPCO, which was a business competitor of the Plaintiffs) in the Thai Action before the Thai Court.

G.4.  WHETHER A GOOD ARGUABLE CASE ON LOSS AND QUANTUM

G.4.A THE CLAIMED AMOUNT, AND SUBSEQUENT ADJUSTMENTS

45.As stated in the Complaint, the total amount of damages claimed by the Plaintiffs in the Thai Action is THB753,967,853 (approximately HK$177 million).  The breakdown of that total sum appears at §36 of PC/Rep1 (reproduced above).  In summary, the individual heads are:

(a)  Loss of reputation in the total sum of THB15,000,000 (THB5,000,000 for each of Kyototango, Oita and Toshiki projects);

(b)  Loss of Profits in the original sum of THB666,790,000, but adjusted downwards to THB552,200,000 upon reduction of THB114,590,000 representing the projected profits from 2 projects which the Plaintiffs ultimately managed to take up);

(c)  Financing costs in the total sum of THB10,818,753.26;

(d)  Transaction due diligence costs in the total sum of THB8,359,100;

(e)  Tax due diligence costs in the total sum of THB3,000,000; and

(f)  Other expenses in the total sum of THB50,000,000.

46.In AJ/3^rd filed on 8 March 2018, AJ revealed that EPCO and its director Yuth Chinsupakkul (the 1^st and 2^nd Defendants in the Thai Action) had paid THB200,000,000 to the Plaintiffs in settlement of the Thai Action against them.

47.The total amount of damages which the Plaintiffs are now seeking in the Thai Action, after the above-mentioned projected profits from the 2 projects and the settlement amount, has become THB439,377,853.

48.On 9 March 2018, and by consent, the restrained amount of the Injunction was ordered by me to be reduced to that sum of THB439,377,853 (equivalent to HK$109,882,608).   

G.4.BTHE THAI COURT’S WIDE POWERS TO AWARD DAMAGES

49.The Thai Court’s powers to award damages in a case of the present nature appears to be broad and discretionary.

50.Section 438 of the Civil and Commercial Code of Thailand and Section 13 of the Trade Secrets Act are relevant and have been discussed by the experts.

51.Section 438 of the Civil and Commercial Code of Thailand provides that:

“ ...the Court shall determine the manner and the extent of the compensation according to the circumstances and the gravity of the wrongful act. Compensation may include restitution of the property of which the injured person has been wrongfully deprived or its value as well as damages for any injury caused.”

52.PC explained[15] that under that section:

“ 33. The Thai court has broad discretion in determining the extent of damages. In exercising its discretion in cases such as this, the Thai court would consider factors such as: (i) the intentions (i.e. whether there was bad faith) behind and the gravity of the wrongful act; (ii) the degree of harm ... (iii) whether there were any attempts at rectifying the damage; (iv) whether the damage was caused by the wrongful acts; and (v) where loss of profits are concerned, the likelihood that such profits would be obtained but for the wrongful acts.

34. This discretion is usually exercised in a broad‑brush approach ...”

53.Section 13 of the Trade Secrets Act provides that:

“ In determining the measure of damages ..., the court is empowered to apply the following rules:

(1) In addition to the damages for the actual damage suffered, the court may include in the damages for the plaintiff, account of profits accrued from or in connection with the infringement by the infringer.

(2) In case where the court is unable to measure the damages under (1), it may order such amount of damages to the controller of trade secrets, as it deems appropriate.

(3) In case where there is clear evidence that the infringement of trade secrets is conducted willfully or maliciously causing the trade secrets to cease the quality of secrecy, the court is empowered to order the infringer to pay punitive damages in addition to the amount of damages granted under (1) and (2).  However, the punitive damages shall not exceed two times the amount of damages under (1) or (2).”

54.CB did not dispute the applicability of Section 13 of the Trade Secrets Act.  In CB/Rep, he also set out Section 13(1) and (2) of that Act.  Having done so, he gave his opinion[16] that:

“ 50. As such, even if the Plaintiffs are able to establish a claim for infringement of trade secret rights against the Defendants, the [Thai] Court will, in its discretion, determine damages only for such amount directly arising out of and are foreseeable consequences to the Defendants’ action. In other words, the Plaintiffs must prove to the [Thai] Court’s satisfaction that the Plaintiffs’ damage and loss was caused directly by the Defendants action.” (Emphasis added)

55.The restrictive test of “directly arising out of ” or “caused directly” opined by CB does not appear to be consistent with the wide words of “in connection with” under in Section 13. CB did not give further elaboration as to where he got that test from or any authority in support of its applicability.

56.PC did not agree with that restrictive test.  In PC/Rep2, he expressed his opinion that:

“ 59. Section 13 of the Trade Secrets Act does not require any direct causal link between the Defendants’ action and the loss suffered, as contended in §51[17] of the Defendants’ Legal Opinion[18]. It will suffice if there is satisfactory proof that damages accrued ‘in connection with the infringement’, which is much broader than a direct causal link.

60. Further under section 13, profits accrued from or in connection with the infringement are claimable ...

61. As regards proof of damage, the Thai court would only require credible evidence to guide the court’s exercise of its broad discretion in the quantification of damages.  There is no guidance on the sort of evidence that the Thai court would expect in proving the damages claimed, other than that the Thai court will consider any and all evidence in the round; it very much depends on a case‑by‑case basis.”

57.In my view, PC’s opinion on the powers of the Thai Court is more consistent with the natural meaning of the wording of Section 438 of the Civil and Commercial Code of Thailand and Section 13 of the Trade Secrets Act.

58.I also bear in mind the matters which I have set out above which in my view affect my assessment of the independence and impartiality of the Defendants’ experts.

59.On the evidence before me, I favour PC’s view that the Thai Court has a broad discretion in determining the extent of damages, that a broad-brush approach would be adopted, and that no direct causal link is required to be proved.

G.4.C THE COMPETING EXPERT EVIDENCE ON LOSS AND QUANTUM

60.I have set out the relevant paragraphs in PC/Rep1 (§§36‑37) where PC expressed his opinion that the amount of damages claimed by the Plaintiffs in the Thai Action is reasonable and justified in the circumstances of the case. 

61.CB did not agree.  In CB/Rep:

(a)  he came up with the test of “directly arising out of” or “caused directly”, which appears me to be inconsistent with the nature meaning of the relevant sections in the 2 Thai Acts;

(b)  in respect of the Loss of Reputation Claim, he opined[19] that the Plaintiffs had not provided any supporting documents to the claim.  He further expressed his view that:

“ based on our experience, damages for the loss of reputation are rarely awarded by the [Thai] Court. Even if they are awarded, the reputational damages are usually nominal.”

(c)  in respect of the Loss of Profit Claim[20], he principally disputed the basis of projection for net profit adopted by the Plaintiffs.  He said that:

“ 59. I have not found any supporting evidences that the Plaintiffs have presented to substantiate their loss of profit claim. I, therefore, view that if the Plaintiff is unable to substantial the claim, it is unlikely that the [Thai] Court will grant this amount to the Plaintiffs.”

(d)  in respect of the Financing Costs[21], he said that he had considered the Plaintiffs’ supporting documents.  He said that certain loans did not relate to certain projects, that certain supporting receipts were missing, and that he had not found any supporting documents indicating the linkage between the expenses and the projects concerned.  He then opined that:

“ ...Since the Plaintiffs have not yet presented documents to substantiate their claim, I therefore view that it is unlikely that Thai Court will grant this amount to the Plaintiffs.”

(e)  in respect of the Transaction and Due Diligence Costs[22], he said that he had studied the supporting documents.  He commented on the irrelevance of some and the inadequacy of others.  He said that there was no evidence that the Plaintiffs had in fact paid certain invoices.  He opined that:

“ 70. In the premises, I take the view that the Plaintiffs claims for Transaction Due Diligence is arbitrary and were not directly related to any alleged wrongful acts by the Defendants. It is extremely unlikely that the [Thai] Court will grant the amount for transaction due diligence claimed by the Plaintiffs.”

(f)  in respect of the Tax Due Diligence Costs[23], he said that they were unsupported by any invoice or proof of payment;

(g)  in respect of the Other Expenses[24], he said that the Plaintiffs had not provided any supporting documents, and that they might not have been incurred solely for the projects concerned.

62.As can be seen from the above, the opinions expressed by CB were based primarily upon his assessment of the evidence.  They are very much factual.

63.PC disagreed with CB’s opinions.  He maintained his opinions expressed in PC/Rep1.  He dealt with the issue of loss and quantum in some further details in PC/Rep2.  In particular, in respect of the Loss of Reputation Claim, he opined as a matter of Thai law that:

“ 62. Under section 447 of the Thai Civil and Commercial Code:

‘ Against a person who has injured the reputation of another, the Court may, on the application of the injured person, or order proper measures to be taken for the rehabilitation of the latter’s reputation, instead of, or together with, compensation damages.’

63. I cannot agree with the assertion at §54 of the [Siam Premier Letter] that damages for loss of reputation are rarely awarded. Many plaintiffs claim for and are awarded damages for loss of reputation, pursuant to the express gateway under Thai law to claim for loss of reputation (which the [Siam Premier Letter] has conveniently omitted.

...

66. The Thai court does not expect the plaintiff to present evidence of loss per se given the rather abstract nature of this loss of reputation head of damage; rather, the court will exercise its discretion in awarding damages for loss of reputation on the basis of who the plaintiff is. The status of the plaintiff matters, e.g. famous companies and individuals. The higher the plaintiff’s social status, the more likely it is for the Thai court to award a higher amount in damages for loss of reputation.

...

68. For the above reasons, I opine that there is a sufficient basis for the Plaintiffs to claim for a total of THB15,000,000 in damages for loss of reputation.  That said, quantification of such damages will ultimately be subject to the broad discretion of the [Thai] Court.”

64.KT in turn disagreed with PC/Rep2.  In KT/Rep, he principally expressed his opinion on the duty of the Plaintiffs to adduce evidence to prove loss and their (in KT’s opinion) failure to do so.

G.4.DA MINI‑TRIAL ON QUANTUM NOT PERMISSIBLE

65.Mr Chan again picked up on the evidence and spent 15 pages of his 37‑page written submissions on loss and quantum.

66.The effect of Mr Chan’s submissions was, with respect, to invite me to conduct a mini‑trial on the matter.  I will not undertake that:

(a)  PC have expressed his opinion with reasons that the Plaintiffs’ claims on quantum are reasonable and justified in the circumstances of the case;

(b)  PC’s opinion has not been negated by the views of CB and KT on the evidence.  I have summarized the contrary opinions expressed by CB and KT and their reasoning.  Their views are based primarily on their review and their interpretation of the evidence;

(c)  Disputes of facts and their resolution based upon detailed assessment of facts and evidence and their adequacy are not matters for this Court, but are to be undertaken in due course during the trial by the Thai Court;

(d)  I note that CB’s views and opinions might further have been tainted by the application of his test of “directly arising out of ” or “caused directly”[25], which in my view is at odds with the natural meaning of the wording of the 2 Thai Acts;

(e)  I bear in mind the warning given by Parker LJ in Derby (No 1).  I accept Mr Chua’s submission[26] that the issue of quantum “is an issue which ought to be determined in the Thai Proceedings, and not by mini‑trial in Hong Kong”;

(f)  Undertaking any sort of mini‑trial is particularly objectionable in this case given the broad discretion the Thai Court has in determining the extent of damages, and that a broad‑brush approach would be adopted.  Assessment of evidence ought therefore to be left to the Thai Court applying the appropriate principles and approaches under Thai law.

G.4.E CONCLUSION

67.For the reasons set out above, I am of the view that the Plaintiffs have demonstrated before me that it has a good arguable case on loss and quantum in the Thai Action before the Thai Court.

H.     Risk of dissipation

H.1.  THE PARTIES’ STANCES, AND THE ISSUE DEFINED

68.Mr Chan summarized this limb of his submissions as follows:

“ 1. Given the serious and inexplicable delay by Ps in applying for the Injunction (Thai Action was filed on 18 April 2016 and was answered by D1 and D2 on 25 July 2016, but Ps only applied for ex parte Injunction on 15 December 2017), there is plainly no real risk of dissipation of assets and the Injunction should thus be discharged.

2. Whether D1 and D2 are dishonest or commercially immoral is beside the point.  If they were, the horse would have been bolted by now; if they were not, Ps’ case on risk of dissipation breaks down.  Either way, injunctive relief ought not to be granted ...”

69.Mr Chan cited 章晶历v 吴联模 (unrep, HCCT 48/2017, 27 October 2017, per Chow J at §15) and submitted that before the court may grant a Mareva injunction, there must be solid evidence of a risk of dissipation of assets, and the standard of proof is relatively high.

70.Whilst that is so, Mr Chan accepted that real risk of dissipation may be inferred from the facts.  As summarized in The Hong Kong Civil Procedure 2020 (at §29/1/70)[27]:

“ The nature of commercial dealings between the plaintiff and the defendant can be a relevant factor in showing risk of dissipation, for example, where the defendant has acted to very low commercial standards, even if not dishonestly (see Honsaico Trading Ltd v Hong Yiah Seng Co. Ltd [1990] 1 H.K.L.R. 235). The court should not too readily infer a real risk of dissipation from the assertions that the defendant has displayed low commercial morality in its past dealings (Hornor Resources (International) Co Ltd v Savvy Resources Ltd [2010] 4 H.K.C. 50). Where a good arguable case is established on a claim for fraud or dishonesty, a court more readily may infer a real risk of dissipation. ...”

71.Delay in seeking a Mareva injunction is a relevant consideration. But whilst that is so, the principal issue remains whether any real risk of dissipation can be shown.  As observed by Peter Ng J in Re Chau Cham Wong Patrick [2016] 2 HKLRD 278 at §33:

“ While the mere fact of delay in bringing an application for Mareva injunction or that the application is first made inter partes does not, without more, negate a risk of dissipation, delay, and the lack of proper explanation for it, is always a relevant consideration when assessing whether there is a real risk of dissipation: Enercon GmbH v Enercon (India) Ltd [2012] EWHC 689 (Comm). As Eder J put it at [78]:

‘ [I]t is not simply the fact of delay that is so important but what it tells the court about the risk of dissipation.  Absent some proper explanation, the fact that the claimants here waited for almost two and a half years before seeking a freezing injunction raises, at the very least, a large question mark as to whether there is indeed a real risk of dissipation.’ ”

72.In Feng Lishe v Xu ZhiQiang (unrep, HCA 2178/2015, 1 June 2017), a case Mr Chan relied heavily on, there was delay in the plaintiff’s application for a Mareva.  On the facts, Recorder Stewart Wong SC observed that:

“ 41. I accept that if there is a good arguable case in support of an allegation that the defendant has acted fraudulently or dishonestly, or with unacceptably low standards of morality giving rise to a feeling of uneasiness about the defendant, then a risk of dissipation may be inferred by the Court even without specific evidence in that regard .... However, that is not an invariable rule, and the Court has to consider all the evidence before it to decide whether a risk of dissipation is shown or can be inferred.

   42. In my judgment, the delay in the making of the ex parte application for a Mareva injunction, when Xu was at all times aware of Feng and China Art pursuing him via the Court and the police in Hong Kong, so that he did have ample time to dissipate his assets in Hong Kong, which consist really of two sums in bank accounts (one held via his wholly‑owned company), if he so wished, suggest to me strongly that there was and is no risk of dissipation.  If, however, by then Xu had already removed the money (which does not seem to be the case: see §39 above), then this is a case of locking the stable door after the horse has bolted (Hsin Chong Construction (Asia) Ltd v Henble Ltd [2005] 3 HKC 27 at §29 per Reyes J).  It is in my judgment unlikely that, if there was a risk of dissipation because he is a person of low commercial morality, Xu would not have removed his money well before 2 November 2015 but to take the chance that China Art might not be able to find the bank accounts, when moving the money would have been simple.”

73.In the present case, that there had been delay in the application for the Injunction is beyond dispute.  The Complaint was filed on in April 2016.  The discovery of by the Plaintiffs of the alleged disclosures by the Defendants would have been even earlier than that.  The main explanation given by AJ for that delay is that the Plaintiffs had been wrongly advised about the availability of Mareva injunction in Hong Kong, and that they did not know and were not advised until around the end of September 2017 that a Mareva injunction could be sought in Hong Kong in aid of the Thai Action[28].  He said that since so advised, the Plaintiffs proceeded diligently and made the application in December 2017.

74.On the evidence before me, I have no reason not to accept that explanation from AJ.

75.Mr Chua submitted that despite the delay, but given the reasons for the delay, and given the Defendants’ lack of commercial morality[29], a real risk of dissipation can still be inferred.

76.The real issue is therefore whether such an inference can be so inferred.

H.2.  THE FACTS IN SUPPORT OF LOW COMMERCIAL MORALITY

77.Mr Chua relied upon a number of matters to demonstrate low commercial morality on the part of the Defendants.  I will deal with them in turn below.

78.However, before doing so, I remind myself of the observations made by C Chu J (as she then was) in Hornor Resources (International) Co Ltd v Savvy Resources Ltd [2010] 4 HKC 50 at §27 that:

“ ... the court should examine with care allegations that a defendant has acted dishonestly and should not too readily infer a real risk of dissipation from the conduct or commercial morality of a defendant. It is also important to bear in mind that ultimately the question is whether on the evidence, which includes evidence of the defendant’s conduct in its dealings with the plaintiff, a refusal of the injunction will involve a real risk that the judgment in favour of the plaintiff would remain unsatisfied.”

H.2.  ADEFENDANTS’ CONDUCT LEADING TO THE THAI ACTION

79.Mr Chua relied on the Defendants’ conduct leading to the Thai Action. 

80.I have found above that the Plaintiffs have demonstrated that they have a good arguable case before the Thai Court, in the sense that the Defendants have without the consent of the Plaintiffs disclosed the Relevant Information (which are trade secrets and copyrighted materials) to EPCO, which was a business competitor of the Plaintiffs. 

81.For the purpose of these applications, no issue was taken as to whether D1 and D2 were employees of the Chow Group and that they owed their employers duty of confidentiality.  I have in any event so found.  Indeed, duties of confidentiality were specifically provided for in their respective employment agreements[30]. PC also opined so in PC/Rep1[31]. D1 as a director of P3 further had under Thai Law a duty not to compete with P3[32].  The inference is that D1 and D2 disclosed the Relevant Information with knowledge that what they did were contrary to the duties they owed to their employers and were wrong.   

82.For D1 and D2 to have disclosed the Relevant Information to EPCO in the way as they did is in my view conduct of low commercial morality which supports an inference of real risk of dissipation.

H.2.BD1’S AND D2’S CORPORATE NETWORK AND DEALING WITH THE CHOW GROUP

83.According to AJ, the Plaintiffs in late 2015 started to suspect that there had been leaks of its internal confidential information.  The Plaintiffs engaged Ernst & Young (“EY”) to conduct investigation into the matter.  He said that[33]:

“ ... EY’s Fraud Investigation team had used [sic] conducted a review of electronic evidence stored in both physical computers and in the cloud, and searches of corporate registries in various jurisdictions to conclude that ... :

(a) [D1] and [D2] had established a network of companies in Thailand, Hong Kong and Japan to conduct businesses with the Chow Group (unknown to the Chow Group), conduct competing business with the Chow Group, and transfer money from one country to another through Consulting Agreements.

(b) [D1] and [D2] had employed a Koji Watanabe as their nominee for establishing special purpose vehicles in Japan. The Plaintiffs subsequently discovered that these SPVs ... was [sic] used to sell solar projects to the Chow Group ...

(c) [D1] and [D2] had disclosed confidential information to EPCO and assisted EPCO with various business activities.”

84.In Section IV of AJ/4^th, AJ set out a number of companies (upwards of 10) which he said D1 and D2 had set up in Hong Kong, Japan and Thailand.  The names of a number of those companies bear the words “Premier Solutions” or “Sungen”.  As submitted by Mr Chua[34]:

“ An interesting feature of many of these companies is that they are named in a way to cause confusion and the illusion that they are related to well‑known companies such as [P3] and Sungen International. Another interesting feature is the use of nominees to act as shareholder(s) and/or director(s) of such companies, again creating the pretence that [D1] and/or [D2] are unrelated to such companies.”

85.In §§64‑90 of AJ/4^th, AJ outlined a number of transactions which he said D1 and D2 (along with others) disclosed the Plaintiffs’ confidential information and in some cases succeeded in profiting from the transactions.  Mr Chua[35]relied specifically on the Kyotamba Project in which D1 and/or D2 received what was described as secret commission to the tune of JYP150 million through nominee companies.

86.In §62 of AJ/4^th, AJ pointed out that D1 held 300,000,000 shares (out of 2,530,000,000 shares on 2 May 2016) in Eastern Power Group Public Company Limited, which is an EPCO subsidiary.

87.In D1/5^th in reply:

(a)  D1 did not deny that he had been conducting businesses with the Chow Group:

(i) He maintained that he “was never in any employment relationship with the Plaintiffs”[36];

(ii) He did not deny the setting up or existence of those companies mentioned by AJ in AJ/4^th.  He said inter alia that:

“ 28. I was very open and never shied away from the fact that I have set up entities including (a) [EIWA GK], (b) [EIWA KK] and (c) [Green Energy GK] for developing solar energy projects in Japan...

29. I have not put much thought into naming these companies and other companies I owned in the solar energy but I strenuously deny that I was using similar sounding name to defraud the Plaintiffs...

30. As I have mentioned in paragraphs 31 to 35 of [D1/4^th], [AJ] was fully informed and agreed that I would be continuing to operate my own separate business in compliment and benefit to the business operating by [P3]. ...”

(b)  In respect of the shareholding in Eastern Power Group Public Company Limited, he said that:

“ 21. I should also mention that I only became a shareholder of Eastern Power Group Public Company Limited in 30 March 2016 — after I have ended my business collaboration with the Plaintiffs and had only held the shares for a short period until 7 April 2016 ...”

88.As I mentioned above, for the purpose of these applications, no issue is taken as to whether D1 and D2 were employees of the Chow Group and that they owed their employers duty of confidentiality.  I have in any event so found.  Also, according to AJ[37], D1 remained a director and chief operating officer of [P2] until he was formally terminated on 29 April 2016.  I also find D1’s statement that he did “not put much thought into naming” those companies concerned inherently unlikely. 

89.In my view, the conduct of an employee/director/chief operating officer (1) conducting business with (not for) his employers and receiving funds for the same through his companies with potentially misleading names, and (2) holding shares in a subsidiary of a business competitor (albeit for a short period) are conduct of low commercial morality which supports an inference of real risk of dissipation.    

H.2.C CRIMINAL PROCEEDINGS IN THAI AND WARRANTS OF ARRESTS AGAINST D1 AND D2

90.Mr Chua relied on 3 outstanding warrants of arrest against D1 and 2 against D2 issued by the Thai authorities[38].  Mr Chua described D1 and D2 as fugitives from justice[39].

91.AJ was not clear about the details of those criminal proceedings.  What he was only able to say were[40]:

“ 40. Such arrest warrants indicate that both [D1] and [D2] may have engaged in other nefarious conduct, with dishonest intent, and that both of them have evidently sought to abscond from their liability arising from such conduct, all of which are in addition to their misconduct described above that form part of the Thai Action.”

92.The presumption of innocence, according to the legal opinion produced by D2[41], has application in Thailand.  The bases for the issue of those warrants are also not before this court.  I am therefore not prepared to take the existence of those criminal proceedings into account when assessing the risk of dissipation.

H.2.DSTOLEN RACKS IN JAPAN

93.In gist, and as summarized by Mr Chua[42]:

“ ...EY discovered that approximately HK$3.5 million worth of solar panel mounting racks belong to the Plaintiffs were sold and delivered to a third party, without the Plaintiffs’ authority. Through its investigation, EY furnished relevant emails and documents demonstrating that the unauthorized sale was executed pursuant to [D2’s] instructions, and the sale proceeds were received by [D3] (under a supply agreement signed by [D1] ...). In about January 2017, the Chow Group commenced legal proceedings in Japan for damages for fraud.”

94.D2 in D2/3^rd did not dispute the sale. He sought to explain[43] that the buyer asked for payment to be made offshore for tax and group structure reason, and that AJ also desired to better structure the cash flow receipts for the Chow Group given the then listing plan.  AJ therefore requested D1 to receive the sales proceeds in Hong Kong.  D2 said that D1 agreed to the arrangement at AJ’s request and used D3 to receive the sales proceeds.  He then said at §36 that:

“ In the circumstances, [D3] was merely acting as a nominee to receive payment on behalf of PSJP. In particular, [D3] was used to receive the payment at the express direction and with the express agreement of [AJ] Further, I understand that the sales proceeds have been transferred back by [D3] to the Chow Group according to the arrangement agreed between [AJ] and [D1].” (Emphasis added)

95.I note that no document has been adduced to prove any transfer back from D1.  D2’s said understanding has not even been confirmed by D1, who only said in §158 of D1/4^th that:

“ So far as the Japanese Proceedings are concerned, I shall leave it to [D2] to address the relevant issues. Suffice for me to say that I am not a party to those proceedings and I have only offered [D3] to receive offshore payment for the transaction on behalf of PS Japan at the request of [AJ].”

What D1 has conspicuously failed to confirm is that the proceeds had been transferred back to the Chow Group.  The absence of any evidence in that regard becomes even more acute given AJ’s denial of D2’s version, and his specific reply at §119 of AJ/4^th that:

“ Neither has the Chow Group received those sale proceeds. I note also that [D2] suggested that [D3] (fully owned and controlled by [D1]) has transferred those sale proceeds to the Chow Group. These sums were never received. I also find it puzzling that it is D2 who deposes to this, yet the purported agreement is said to be between myself and [D1], with the alleged repayment said to be made by [D3] which is [D1’s] nominee.”

96.In my view, and in the light of the evidence, the events relating to the racks in Japan reflect conduct of low commercial morality on the part of D1 and D2 which supports an inference of real risk of dissipation.

H3.  Has the horse bolted?

97.The main thrust of Mr Chan’s submissions in this regard is that “the horse has bolted”. I have reproduced above §2 of his written submissions.  He came back to this theme at §§60‑62 of his submissions, that:

“ 60. The entirety of P’s case on real risk of dissipation is based on their allegations that D1 and D2 are dishonest or have displayed conduct of unacceptably low commercial morality. There is no evidence that D1 and/or D2 have actually dissipated assets or were/was attempting or planning to do so.

61. With the generous time allowed in the present case, any dishonest or commercially immoral person worth his or her salt would have by now siphoned away all assets and funds from Hong Kong without a trace leaving nothing for judgment creditors to enforce.

62. On this analysis, the present case does not turn on whether D1 and D2 are dishonest or commercially immoral: even if they were, which they are not, the granting of the Injunction would have been too late and futile and therefore the Injunction should not be continued.  Equity does not act in vain.  To continue the Injunction now would in effect be locking the stable door after the horse has bolted...”

98.I do not accept those submissions.  In an usual case where a Mareva injunction is granted in Hong Kong in relation to a domestic dispute, the “bolted horse” argument, depending on the facts, may make logical sense.  But in the present case, the Injunction is a domestic one granted in aid of the Thai Action.  It covers assets in Hong Kong.  D1 and D2 are no longer in Thailand where the Thai Action is taking place.  They might be thinking that they are far enough from the reach of the Thai judicial process.  The outstanding arrest warrants could not ensure their return.  They might not be aware of the existence of the s 21M process.  On the facts of the case, I am not satisfied that the horse has necessarily bolted.

H4.   Conclusion

99.For the reasons set out above, I am of the view that the evidence before me, considered as a whole, support the inference and conclusion that “a refusal of the injunction will involve a real risk that the judgment in favour of the plaintiff would remain unsatisfied ”.  I am not satisfied that the granting of the Injunction is futile. 

I.  Material non‑disclosure?

I.1.  SOME APPLICABLE LEGAL PRINCIPLES

100.When material non‑disclosure is alleged, the court should concentrate upon the material facts, and to appreciate that disputed issues of facts simply go to the need for trial, and are of very little value in deciding whether a good arguable case has been made out.  The point has to be tested by looking at the substance; the starting question should be whether there is a good arguable case, but not whether there has been non‑disclosure — Wo Fung Paper Making Factory Ltd v Sappi Kraft (Pty) Ltd [1988] 2 HKLR 346, per Hunter JA at p 358 F‑H.

101.In relation to non‑disclosure, there is a tension between two kinds of public interest.  The first, which has been described as “the golden rule” in some cases, is the need to protect the administration of justice and uphold the requirement of full and fair disclosure in an ex parte application.  The other is the general duty to do justice so that the application of the golden rule must not be allowed to become.  The court would have regard to the principle of proportionality in the exercise of its penal jurisdiction to impose sanctions for non‑disclosure — Excel Courage Holdings Ltd v Wong Sin Lai [2014] 3 HKLRD 642, per Kwan JA at §57.

102.In Cheung Kam Wah v Cheung Hon Wah [2005] 1 HKC 136, Woo VP cited with approval the following observations of Recorder Ma SC (as the learned Chief Justice then was) in Yau Chiu Wah v Gold Chief Investment Limited, that:

“ 63. In Yau Chiu Wah v Gold Chief Investment Ltd (HCA 807/2001, 15 May 2001, unreported), Recorder Ma SC (now Ma CJHC) said:

‘ 43. Material non‑disclosure is rightly regarded as a serious matter and in certain cases would not only justify the setting aside of an existing order but may also constitute the determining factor in the refusal of a fresh grant. However, it is important for a court, when considering whether or not to set aside an existing order or to grant a new injunction, to consider all the circumstances of the case to arrive at what is the justice of the situation. There is of course no doubt that the court does have the residual discretion not to set aside or to grant a fresh court order even in circumstances where material non‑disclosure has been shown.

44. Of the relevant factors that a court would consider in the exercise of its discretion, they would include the following:

1. Whether the non‑disclosure was innocent or deliberate.

2. The excuse or reason for such material non‑disclosure.

3. Whether the non‑disclosure would in fact have resulted in the original order not having been made in the first place or whether, conversely, even if the material fact or facts have been disclosed, this would have made no difference. Here, the court is required to look at the merits and justice of the grant of a Mareva injunction.

4. Whether the party guilty of the non‑disclosure is deserving of a locus poenitentiae.”

I.2.  CONSIDERATION OF THE ISSUE

103.In Section G of his submissions, Mr Chan referred to a number of factual matters and disputes, which include his detailed analysis of the contents and interpretation of the Emails, the Loss of Reputation Claim and Loss of Profit Claim which he submitted were unarguable, P3’s business model and D1’s and D2’s modus operandi in running P3’s business, and the suggestion that EPCO being a long term customer as opposed to a competitor.

104.I have considered the issues as to whether the plaintiffs have demonstrated a good arguable case both on liability, loss and quantum.  I have found that they have.  I have set out the evidence and my consideration above.  Beyond what I have considered, I have refused to undertake any mini‑trial.  In my view, in substance, and having regard to the principle of proportionality, I am of the view that there has not been any material non-disclosure by the Plaintiffs in those regards.  To borrow the words of Hunter JA in Wo Fung Paper Making Factory, disputed issues of facts simply go to the need for trial.  In this regard, I accept Mr Chua’s submissions at §69 of his written submissions.

105.In §141.7 of his submissions, Mr Chan further submitted that:

“ ... Ps has [sic] received a settlement sum of THB285,457,650 on both sides of the ex parte hearing ...”

and that the Plaintiffs had failed to disclose them.

106.That total sum of THB285,457,650 in fact consisted of 2 sums:

(a)  a sum of THB85,457,650 (about JPY250,000,000) received in 2016; and

(b)  a sum of THB200,000,000 received in late December 2017, the history of which I have mentioned in Section G.4.a. above.

107.AJ dealt with the sum of THB85,457,650 in §147 of AJ/4^th.  There is factual dispute as to what that sum related.

108.AJ disclosed the receipt of THB200,000,000 in AJ/3^rd filed on 8 March 2018.  He explained at §147(f) of AJ/4^th that P1 only received that sum around 31 December 2017 after the ex parte hearing pursuant to a confidential settlement agreement entered into between EPCO and the Chow Group.  That settlement was first announced publicly in the financial statements of P1 for the year ended 31 December 2017 published on 28 February 2018, and then voluntarily disclosed in AJ/3^rd.

109.As mentioned above, the restrained amount of the Injunction has been reduced to reflect, amongst others, the receipt of THB200,000,000.

110.In the circumstances, I agree with Mr Chua[44] that there has not been material disclosure in those regards.

I.3.  CONCLUSION

111.For the reasons set out above, I reject Mr Chan’s submissions that there has been material non‑disclosure on the part of the Plaintiffs.

J.  The Grounds of Abuse of process and Balance of Convenience

112.As developed by Mr Chan, these 2 grounds are based primarily on his submissions that the Plaintiffs do not have an arguable case, the alleged absence of real risk of dissipation, and the Plaintiffs’ delay in seeking the Injunction.  They stand and fall together with those other grounds.  Given my rulings above, these two grounds also fail.

K.  Stage 2 — Whether “unjust” or “inconvenient”

K.1.  THE LAW

113.In Compania Sud Americana, Lord Philips NPJ observed at [54] that:

“ Mareva relief is discretionary in any event, but this provision in s. 21M(4) underlines the fact that the court has a wide discretion to refuse to make the order sought if the fact that the substantive claim is being litigated in a foreign court has consequences that make the grant of a Mareva ‘unjust’ or ‘inconvenient’. It does not seem to me to be very helpful to try to formulate a list of circumstances where it will be unjust or inconvenient to grant the Mareva sought. In Crédit Suisse Fides Trust SA v Cuoghi Lord Bingham of Cornhill CJ, when considering the similar question of whether it was ‘inexpedient’ to make an Order under s. 25 of the 1982 Act, stated:

...it would obviously weigh heavily, probably conclusively, against the grant of interim relief if such grant would obstruct or hamper the management of the case by the court seized of the substantive proceedings (the primary court) or give rise to a risk of conflicting, inconsistent or overlapping orders in other courts.

He observed, however, that:

It would be unwise to attempt to list all the considerations which might be held to make the grant of relief under section 25 inexpedient or expedient, whether on a municipal or a worldwide basis.”

114.In Motorola Credit Corpn v Uzan and Others [2004] 1 WLR 113, the English Court of Appeal was concerned with an application made under section 25 of the Civil Jurisdiction and Judgments Act 1982 which:

“ ...empowers the court to grant all forms of interim relief in aid of foreign courts, unless ‘in the opinion of the court, the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings in question makes it inexpedient for the court to grant it’.”[45]

At §115, the Court of Appeal identified five particular considerations which the court should bear in mind, when considering the question whether it is inexpedient to make an order.  They are:

“ First, whether the making of the order will interfere with the management of the case in the primary court eg where the order is inconsistent with an order in the primary court or overlaps with it. That consideration does not arise in the present case. Second, whether it is the policy in the primary jurisdiction not itself to make worldwide freezing/disclosure orders. Third, whether there is a danger that the orders made will give rise to disharmony or confusion and/or risk of conflicting inconsistent or overlapping orders in other jurisdictions, in particular the courts of the state where the person enjoined resides or where the assets affected are located. If so, then respect for the territorial jurisdiction of that state should discourage the English court from using its unusually wide powers against a foreign defendant. Fourth, whether at the time the order is sought there is likely to be a potential conflict as to jurisdiction rendering it inappropriate and inexpedient to make a worldwide order. Fifth, whether, in a case where jurisdiction is resisted and disobedience to be expected, the court will be making an order which it cannot enforce.”

K.2.   MR CHAN’S CONTENTIONS

115.The only submission made by Mr Chan in this regard was this:

“ According to Ps’ own expert, the Thai courts do not have any policy or practice of making extra‑territorial freezing orders [§29 of PC/Rep1]. This is a factor militating against continuing the Injunction: Banco Nacional v Empresa de Telecommunicaciones [2007] 2 CLC 34 at §30...”

116.The full §29 of PC/Rep1 is as follows:

“ The Thai courts do not have any policy or practice of making extra‑territorial freezing orders. As such, the Plaintiffs do not have any avenue through the Thai courts to obtain freezing orders against the Defendants’ assets in Hong Kong.”

K.3.   DISCUSSIONS

117.The facts in Banco Nacional are very different from what we have here.  In that case, the plaintiff obtained an arbitration award in Turin.  After enforcement of that judgment in Italy, a substantial sum remained outstanding.  The plaintiff then sought to enforce the judgment in other countries to which Council regulation (EC) 44/2001 applies. Before the English Courts, the plaintiff first obtained a domestic freezing order against the defendant.  Then, upon the defendant claiming to have assigned certain of its assets to a Cuban state controlled company, the plaintiff sought and obtained a further worldwide freezing order.  By that time the plaintiff had already taken enforcement proceedings in France, Luxemburg, Belgium, Germany and Spain.  The defendant accepted that the domestic freezing order should continue, but contended that the court had no jurisdiction to make the worldwide order.  In was in respect of whether this further worldwide should have been granted where Tuckey LJ observed, amongst others, at§§29 and 30 that:

“ 29. Applying these principles to the facts of this case we think there can be no doubt that it would be inexpedient to grant BNC a worldwide freezing order. ETC is not resident here. Any assets here are protected by the domestic order. The worldwide order is only directed at assets outside the jurisdiction. There is therefore no connecting link at all between the subject matter of the measure sought and the territorial jurisdiction of this court. It is not suggested that the worldwide order should be made in order to assist the Italian court or any of the other courts of the Member States which have been involved in enforcement proceedings.

30. These reasons alone would justify refusing worldwide relief but there are additional reasons for doing so which we take from para. 115 of Motorola v Uzan [2003] 2 CLC 1026 where this court identified a number of particular considerations to be borne in mind when considering the question of inexpediency. It is not the policy of the Italian court to grant worldwide freezing orders. Given the multiplicity of enforcement proceedings in other member states there is a danger that an English worldwide freezing order would give rise to disharmony or confusion and/or risk conflicting, inconsistent or overlapping orders in other jurisdictions.” (Emphasis added)

118.In contrast with Banco Nacional, the Injunction is a domestic one.  D1 and D2 are Hong Kong permanent citizens. Both are in the solar power business.  D3 is a private company incorporated in Hong Kong.  There are no multiplicity of enforcement actions in other member states where Council regulation (EC) 44/2001 applies.  The Injunction was indeed sought in aid of the Thai Action.

119.In my view, the policy or practice of the Thai courts not making any extra‑territorial freezing orders renders it “not inexpedient” for Hong Kong courts to grant the Injunction.  It is in my view in fact a support in support of the Plaintiffs’ applications for the grant and continuation of the Injunction.  As observed by Potter LJ in Motorola Credit Corporation (at §119):

“ ...It seems to us that the position being contemplated by Millett LJ [in Refco Inc v Eastern Trading Co [1999] 1 Lloyd’s Rep 159] was one where the primary court has the jurisdiction to grant relief but would refuse to exercise it on the merits or for other substantial reasons (which the court appears to have understood to be the position in the Refco Inc case [1999]1 Lloyd’s Rep 159 ) and not the position where the foreign court simply lacks the jurisdiction (as now made clear to be the position in the US in the Grupo Mexicano case). In the latter event, the English court may judge it ‘not inexpedient’, and indeed is likely to regard it as desirable in cases of international fraud, to be supportive of the processes of the primary court.”

K.4.   CONCLUSION

120.In the circumstances, and as part of the stage‑2 exercise, I do not find it unjust or inconvenient to grant and continue the Injunction in aid of the Thai Action.

L.   Overall conclusion

121.For reasons set out above, I dismiss the Discharge Summons.  I order that the Injunction be continued in the varied sum of THB439,377,853 (equivalent to HK$109,882,608).

122.I make a costs order nisi that the costs of and occasioned by the Continuation Summons and the Discharge Summons be to the Plaintiffs, to be taxed if not agreed.  Should any party seek variation or the same or summary assessment, submissions should be filed within 14 days from the date when this Decision is handed down, submissions in opposition within 14 days of receipt, and reply within 7 days.

Mr Chua Guan Hock SC leading Mr Edward Tang, instructed by Peter Yuen & Associates, for the 1^st to 3^rd Plaintiffs

Mr Anthony Chan, instructed by DLA Piper Hong Kong, for the 1^st to 3^rd Defendants