Re Shandong Chenming Paper Holdings Ltd

HCCW 175/2017

[2023] HKCFI 2731

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO 175 OF 2017

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D E C I S I O N

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1.On 10 August 2023 I handed down my decision staying the present Petition. The Petitioner seeks leave to appeal. This I will grant for the following reasons.

2.My reasoning relied on the decisions of the Court of Appeal and the Court of Final Appeal in Guy Lam[1]. There are two first instance decisions that suggest that the Guy Lam is not relevant to the central issue in the present case, namely, whether a dispute over a debt arising under a contract containing an arbitration clause should be determined by arbitration and a company is not required to show a bona fide defence on substantial grounds in order successfully to oppose a winding up petition. The first in time of these first instance decisions is that of Linda Chan J in Re Simplicity & Vogue[2]. This was not relied on before me by the Petitioner, which tacitly accepted that it is wrong. The other is a decision of DHCJ Le Pichon in Re Inversion Productions Limited[3]. Although it seems to me clear that the reasoning in Guy Lam applies to arbitration clauses it is highly undesirable that there are conflicting first instance decisions. It is also desirable that the Court of Appeal has the opportunity to clarify the application in Hong Kong of the Lasmos approach (Re Southwest Pacific Bauxite[4]), which has recently been considered and approved by the Supreme Court in Republic of Mozambique v Privinvest Shipbuilding[5] and the Privy Council in FamilyMart[6].

3.I understand that Chan J’s decision in Re Simplicity & Vogue has been appealed and is to be heard by Susan Kwan VP, Cheung JA and Lam JA on 29 February 2024. Although it is a matter for the Court of Appeal there seems to me merit in that appeal being heard at the same time as this one.

4.I will order that the costs of this application be costs in the appeal.

Written Submissions by Mr Laurence Li SC, Mr Chow Ho Kiu and Mr Sik Chee Ching, instructed by Chow & Macksion Chan, for the petitioner

Written Submissions by Mr Victor Joffe SC and Mr Alexander Tang, instructed by King & Wood Mallesons, for the company