Magnus Leonard Roth v. Vitaly Petrovich Orlov

HCA 1093/2017

[2020] HKCFI 802

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1093 OF 2017

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Before: Hon Anthony Chan J in Chambers

Date of Plaintiff’s Written Skeleton Submissions: 22 April 2020

Date of Defendant’s Written Skeleton Submissions: 24 April 2020

Date of Decision: 21 May 2020

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D E C I S I O N

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1.This is the Defendant’s application for leave to appeal against the Decision of this court dated 26 March 2020.

2.A lengthy draft Notice of Appeal has been produced by counsel for the Defendant, and there are 2 sets of written submissions from the parties.

3.Understandably, the Defendant relies heavily on the breadth of the Arbitration Clause (see Decision, §§18 and 25) and the low threshold it had to satisfy in the Stay Application (Decision, §22). 

4.However, the breadth of the Arbitration Clause and the low threshold did not mean that the Clause might be applied indiscriminately as long as the subject matter of dispute had anything to do with the Framework Agreement.  The court must construe the Clause, taking into account the factual matrix and context (Decision, §27), to see if it applied, prima facie, to the claims of the Plaintiff.

5.What stood out in the case was that separate treatment was given to the Loan Agreement.  It was made after the Framework Agreement and it contained a different choice of law clause (Decision, §§28-35).  Despite the length of the draft Notice of Appeal, I am unable to see what real answer there is to this key factor.  On behalf of the Plaintiff, Mr Chain had described the document as “nit-picking and out of context selective readings of the Decision, ignoring the Court’s Holistic Interpretation”. 

6.I am unable to agree with the characterisation by the Defendant of the Loan Agreement.  It was not an agreement “to pay compensation for delay in payment under the Framework Agreement” (para 3 of the Defendant’s Reply Submissions).  Such mischaracterisation was based on an improper understanding of the facts.  The Loan Agreement was for the Defendant to pay compensation for his failure to complete the sale of the Plaintiff’s interest in the Norebo Group by 29 February 2016 (Decision, §§35 and 40). 

7.I agree with the Plaintiff that the “Fiona Trust Approach” was one tool within the toolbox of contractual interpretation principles.  It has not been shown in the proposed grounds of appeal or the Defendant’s submissions how the court had erred in understanding that approach or how that approach was of real assistance to the Defendant’s case (Decision, §§36-41). 

8.In respect of the Set Aside Application, the fact was that the evidence was all one way in favour of Hong Kong court as the appropriate forum.

9.I am unable to agree that the proposed appeal has a reasonable prospect of success (see Hong Kong Civil Procedure 2020, vol 1, [59/2A/4]).  Accordingly, the Defendant’s Summons dated 8 April 2020 (I assume that it has now been issued) is dismissed with costs to the Plaintiff. 

Mr Christopher Chain, instructed by Howse Williams, for the Plaintiff

Mr William Wong SC, Mr Justin Lam and Ms Euchine Ng, instructed by Boase Cohen & Collins, for the Defendant