Meidi Investment Holding Ltd v. Bsc Capital Ltd and Others

HCA 1445/2021

[2024] HKCFI 2207

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1445 OF 2021

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D E C I S I O N

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Summary of Facts

1.This case involves an alleged fact pattern which has featured in an increasing number of cases before the Court. Counsel for the Plaintiff (“P”) calls these “share pledge fraud” cases.

2.The summary of facts below is largely according to P. The Defendants have either not appeared or not filed any evidence or stated a position which contradict P’s version of events.

3.P had a block of shares in a company (“ListCo”) listed on the Stock Exchange of Hong Kong (“SEHK”). It wished to borrow funds and was willing to pledge the shares as security. A middleman introduced it to the 1^st Defendant (“D1”) as a willing lender.

4.P and D1 signed a Master Loan Agreement (“MLA”) dated 9 May 2021. Pursuant to the MLA, D1 was to lend up to US$65.5 million to P against P’s shares in ListCo. D1 was not to dispose of the shares unless and until there is any event of default.

5.D1 arranged for the 2^nd and 3^rd Defendants (“D2” and “D3”) to act as custodians of the shares and for P to deposit the shares with them.

6.P entered into a Custodian Management Agreement (“CMA”) dated 10 May 2021 with D1 and D2, and a Custodian Management Pledge Agreement (“CMPA”) dated 17 May 2021 with D1 and D3. It deposited 66.8 million shares into each of an account in D2’s name at a securities firm in Hong Kong (“D2’s Account”) and an account in D3’s name at another firm in Hong Kong.

7.Both the CMA and the CMPA refer to the MLA and state that P appoints D1 to control the shares until they are released back to P.

8.Soon after P deposited 66.8 million shares into D2’s Account, 32 million of the shares were sold or transferred out, through D2’s accounts at the 4^th and 5^th Defendants in Hong Kong (“D4” and “D5”), and through SEHK’s market to persons unknown, hence the 6^th and 7^th Defendants (“D6” and “D7”).

9.The sale and transfers were made without P’s knowledge and without D1 having ever lent P a cent.

10.P has since discovered that D1 may not even exist as an entity. It is not related to “Bear Stearns Companies” as it held out at the cover of the MLA. It cannot be found at the addresses in New York, London, and Panama which it gave in the MLA. It has no registration in places where it purported to operate. It refused to engage with P when P discovered the sale or transfer of the shares. It has not participated in this action or earlier proceedings.

11.D2 has chosen not to shed any light on D1 or its relationship and dealings with D1, citing in general a duty of confidentiality to clients. It initially assured P, in a reply to P’s auditors and in an account statement, that it still had all the shares deposited into D2’s Account. It later retreated from that position. It at one point said that it had helped D1 transmit some loan proceeds to P’s bank account in Hong Kong. But P’s inquiries with the bank showed this to be incorrect.

The Dispute

12.P commenced this action to claim against the Defendants for fraud, conspiracy to injure, and tracing of assets.

13.At the same time as it commenced this action, P obtained an injunction order against the Defendants (“Injunction Order”) comprising a Mareva injunction against D1 and D2, an order for disclosure of assets against D1 and D2, a proprietary injunction against all the Defendants, and an order for disclosure requiring the Defendants and certain securities firms to disclose information about what has happened to P’s shares.

14.D1 at one time instructed solicitors to apply to discharge the Injunction Order and for an extension of time to comply with the disclosure orders therein. It appears to have since dropped out of these proceedings, not even filing an Acknowledgement of Service.

15.D2 applies to discharge the Injunction Order against it and for a declaration that the Hong Kong Court does not have or ought not exercise jurisdiction over P’s dispute with it. It appears to not have complied with the disclosure orders within the Injunction or applied for extension of time for compliance.

16.D2 relies on the dispute resolution clause in the CMA, which refers to the MLA for disputes between P and D1, and to D2’s Terms and Conditions (“T&C”) for disputes between P and D2.

17.Clause 16 of the T&C states the applicable law to be Bahamas law and that any dispute shall be brought before the Bahamas Court.

18.P’s retort to D2’s application is a combination of two points. First, as Counsel put it, “fraud unravels all”. Second, P says there is a need to bring all the relevant parties together in one set of proceedings. This is especially in a case involving serious allegations of fraud and conspiracy.

Legal Principles

19.Counsel for the parties cite different authorities. But I do not discern that the legal principles are in serious dispute, except in one respect which I will discuss further below.

Stay of Proceedings Because an EJC Unless Strong Reason

20.As Lord Bingham explained in Donohue v Armco Inc [2001] UKHL 64, [2002] 1 All ER 749, at §§24-27:

“24. If contracting parties agree to give a particular court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being on him) can show strong reasons for suing in that forum. I use the word ‘ordinarily’ to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party’s prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case …”

21.See also: Hong Kong Civil Procedure 2022, at 12/8/2(9).

22.In sum, a defendant can apply to stay proceedings on the basis that the plaintiff is in breach of an exclusive jurisdiction clause (“EJC”). Such an application would ordinarily be granted, unless the defendant has unclean hands thus loses its claim to equitable relief, or the plaintiff shows a strong reason against a stay. The burden of showing a strong reason is a heavy one. Ultimately, however, whether to grant a stay is an exercise of discretion in all the facts and circumstances of the particular case.

Fraud Does Not Unravel an EJC Unless Directed at it

23.An argument that “fraud unravels all” may seem potentially a strong reason against a stay. But it raises a dilemma. On the one hand, the argument may turn out to be meritorious, which in turn may undermine the basis for a stay. On the other hand, one must not allow the making of an argument to become a backdoor to escape from the EJC.

24.The dilemma is resolved by the law regarding the EJC and the substantive part, i.e., the rest, of the contract as separate agreements. Fraud, unless specifically directed at the EJC, could render the substantive part of the contract voidable. It would leave the EJC unaffected. See: Quaestus Capital v Everton Associates & Anr [2021] HKCFI 1367, per G Lam J (as he then was), at §§40-43.

25.A party cannot escape from an EJC by challenging the overall contract on a basis which, if successful, would render the contract voidable (and not void ab initio).

26.In other words, allegation of fraud, unless specifically relating to the EJC, is not by itself a strong reason against a stay.

Risk of Parallel Proceedings and Inconsistent Decisions

27.One possible strong reason against a stay is that there are other relevant parties not bound by the EJC hence a risk of parallel proceedings or inconsistent decisions.

28.As Lord Bingham said in Donohue at §§25-27:

“25. Where the dispute is between two contracting parties, A and B, and A sues B in a noncontractual forum, and A’s claims fall within the scope of the exclusive jurisdiction clause in their contract, and the interests of other parties are not involved, effect will in all probability be given to the clause …

26. … this is not an invariable result …

27. The authorities show that the English court may well decline to grant an injunction or a stay, as the case may be, where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions …”

29.Lord Bingham went on to discuss a number of earlier cases. I cannot do better than to quote his Lordship’s summary of the cases in the rest of §27 (underlining added):

“27. … These decisions are instructive. In Evans Marshall & Co Ltd v Berto/a SA [ 1973] l WLR 349 there was a tripartite dispute but only two of the parties were bound by a clause conferring exclusive jurisdiction on the court in Barcelona. Kerr J at first instance was impressed by the undesirability of there being two actions, one in London and the other in Barcelona (pp 363-364). The Court of Appeal took a similar view (pp 377, 385). Sachs LJ thought separate trials particularly inappropriate where a conspiracy claim was in issue (p 377). In Aratra Potato Co Ltdv Egyptian Navigation Co (‘The El Amria’) [1981] 2 Lloyd’s Rep 119 the primary dispute was between cargo interests and the owner of the vessel, both parties being bound by a clause in the bill of lading conferring exclusive jurisdiction on the courts of Egypt. But the cargo interests had also issued proceedings against the Mersey Docks and Harbour Co, which was not bound by the clause. The Court of Appeal upheld the judge’s decision refusing a stay. In the course of his leading judgment in the Court of Appeal Brandon LJ said, at p 128:

‘I agree entirely with the judge's view on that matter, but would go rather further than he did in the passage from his judgment quoted above. By that I mean that I do not regard it merely as convenient that the two actions, in which many of the same issues fall to be determined, should be tried together; rather that I regard it as a potential disaster from a legal point of view if they were not, because of the risk inherent in separate trials, one in Egypt and the other in England, that the same issues might be determined differently in the two countries. See as to this Halifax Overseas Freighters Ltd v Rasno Export (“The Pine Hill”) [1958] 2 Lloyd’s Rep 146 and Taunton-Collins v Cromie [1964] l WLR 633.’

Citi-March Ltd v Neptune Orient Lines Ltd [1996] l WLR 1367 also involved third party interests and raised the possibility of inconsistent decisions. Colman J regarded separate trials in England and Singapore as not only inconvenient but also a potential source of injustice and made an order intended to achieve a composite trial in London despite a Singaporean exclusive jurisdiction clause: see at pp 1375-1376. Mahavir Minerals Ltd v Cho Yang Shipping Co Ltd (The MC Pearl) [1997] 1 Lloyd’s Rep 566 again involved third parties and raised the possibility of inconsistent findings. Despite a clause conferring exclusive jurisdiction on the courts of Seoul, Rix J refused to stay proceedings in England. He regarded the case as on all fours with CitiMarch (see p 575) and at p 569 observed:

‘It seems to me that so far the plaintiffs have shown strong cause why the jurisdiction clause should not be enforced. This is indeed a paradigm case for the concentration of all the relevant parties’ disputes in a single jurisdiction. If in such a case a host of different jurisdiction clauses were to be observed, the casualty at the root of the action would become virtually untriable. The action would fragment and reduplicate, at vast cost ...’

A similar approach is discernible in Ultisol Transport Contractors Ltd v Bouygues Offshore SA (‘The Bos 400’) [1998] 2 Lloyd’s Rep 461, in which the disputes involved four parties where only two of whom were bound by an English exclusive jurisdiction clause. Although the effect of the clause was described by Evans LJ as ‘near-conclusive’ (p 467), an injunction to restrain proceedings in South Africa was refused. In paragraph 27 of his judgment (at p 466) Evans LJ said:

‘In my judgment, two questions arise, one a matter of principle. First, should the court, when deciding whether or not to enforce the exclusive jurisdiction clause by means of an injunction which prevents Bouygues from continuing with its proceedings against Ultisol in South Africa, take into account the effects of such an injunction on persons who are not parties or entitled to enforce the contract containing the jurisdiction clause, Portnet and Caspian here, but who are both necessary and proper parties to the litigation wherever it is held? In my judgment, the clear answer to this question is “yes”. Clarke J did so in his judgment and the contrary has not been argued before us. The relevance of the potential effects on third parties has been recognised in other authorities ...’

Sir John Knox also held that proceedings should be allowed to continue in South Africa because, among other reasons (see p 470)

‘this is the only way in which to minimise, if not avoid altogether, the risk of inconsistent decisions in different jurisdictions.’”

30.These cases suggest that, where it is important to have all the relevant persons appear in one set of proceedings so that the overall dispute can be properly determined, this interest of justice can override the private right of one or some of those persons to have a part of that overall dispute brought in another forum.

31.This is especially when the dispute involves a prima facie case (or at least not fanciful allegations) of fraud, conspiracy or other nefarious conduct. Lord Bingham noted this point which Sachs LJ made in an earlier case. Moreover, Donohue itself was a case involving allegations of fraud and conspiracy. As Lord Bingham said in §§33-34 (underlining added):

“33. … The crucial question is whether, on the fact of this case, the Armco companies can show strong reasons why the court should displace Mr Donohue's clear prima facie entitlement. “If strong reasons are to be found (and the need for strong reasons is underlined in this case by the potential injustice to Mr Donohue, already noted, if effect is not given to the exclusive jurisdiction clauses) they must lie in the prospect, if an injunction is granted, of litigation between the Armco companies on one side and Mr Donohue and the PCCs on the other continuing partly in England and partly in New York. What weight should be given to that consideration in the circumstances of this case?

34. I am driven to conclude that great weight should be given to it. The Armco companies contend that they were the victims of a fraudulent conspiracy perpetrated by Messrs Donohue, Atkins, Rossi and Stinson. Determination of the truth or falsity of that allegation lies at the heart of the dispute concerning the transfer agreements and the sale and purchase agreement. It will of course be necessary for any court making that determination to consider any contemporary documentation and any undisputed evidence of what was said, done or known. But also, and crucially, it will be necessary for any such court to form a judgment on the honesty and motives of the four alleged conspirators. It would not seem conceivable, on the Armco case, that some of the four were guilty of the nefarious conduct alleged against them and others not. It seems to me plain that in a situation of this kind the interests of justice are best served by the submission of the whole dispute to a single tribunal which is best fitted to make a reliable, comprehensive judgment on all the matters in issue. A procedure which permitted the possibility of different conclusions by different tribunals, perhaps made on different evidence, would in my view run directly counter to the interests of justice.”

32.G Lam J expressed the same in Quaestus Capital at §§57-58 (underlining added):

“57. Mr Scott has also referred to a recent English decision in PJSC National Bank Trust & another v Boris Mints & others [2021] EWHC 692 (Comm) in which the court refused to set aside leave to serve the proceedings out of the jurisdiction on several defendants on forum non conveniens grounds, laying importance on the need to avoid multiplicity of proceedings and inconsistent decisions especially in cases where an overarching conspiracy is alleged.

58. There is in my view considerable force in the plaintiff’s submission. This is a case where an overarching fraud scheme is alleged against Everton and Axis (allegedly also involving two Hong Kong companies, namely, Keyway and Adam, and a Belize company, 360HK, though none of them has yet been joined in the proceedings). Documents disclosed and evidence given by or against one defendant in the proceedings against it ought to be available in the proceedings against the other. The interests of justice are best served by having one tribunal adjudicating on the plaintiff’s claims against both defendants in the same suit. Not only is this desirable and will prevent waste and duplication of costs, but it is in my opinion necessary for the purpose of avoiding what I would likewise regard as a potential disaster from a legal point of view, ie separate actions in different jurisdictions culminating in two separate trials and two judgments by two different tribunals, each based on incomplete materials, with an obvious risk of inconsistent findings.”

33.These are salutary words. Any judge who has any experience with fraud or conspiracy cases can well appreciate the wisdom therein.

Foreseeability of Risk of Parallel Proceedings

34.An argument often made against the above considerations is that the risk of parallel proceedings, and hence of inconsistent decisions, is foreseeable and the parties should be taken to have accepted the risk when entering into the EJC.

35.Counsel for D2 cites some authorities for an argument that a matter foreseeable at the time the parties entered into the EJC cannot be a strong reason for overriding it. See: Hong Kong Civil Procedure 2022, at 12/8/2(9); A v B [2022] HKCFI 1031, per M Chan J, at §25; Noble Tower v Nissei Stomach Tokyo [2008] 5 HKLRD 631 (CA), per Stone J, at §71.

36.These authorities, however, do not concern the risk of parallel proceedings and inconsistent decisions or the interests of justice in bringing the relevant parties together in one set of proceedings.

37.In fact, it does not assist much to speak of the risk of parallel proceedings as foreseeable. The risk is omnipresent and can too easily be said to be foreseeable. Moreover, it is rather unreal to hold a party to have foreseen the risk that multiple counterparties were engaging in an elaborate fraud or conspiring against him and hence the risk of parallel proceedings making it difficult for him to obtain redress.

38.Counsel for D2 relies on three cases which involved potential parallel proceedings. See: Lammas Global v Barclays Bank & Ors, HCA No. 2411 of 2009, 13 April 2011, per Saunders J; Hyundai Engineering v UBAF v Bank of China, HCA No. 175 of 2012, 23 September 2013, per DHCJ Lok (as he then was); Li Lian International & Ors v Herport Hong Kong & Anr v Nippon Yusen Kaisha [2019] HKCFI 826, per Ng J.

39.G Lam J in Quaestus Capital at §§50-54 demonstrated how such reliance on Lammas Global and Li Lian International is misplaced.

40.In Lammas Global, one of the defendants could only be sued in Switzerland. The other defendants agreed to submit to Swiss jurisdiction. Exactly because this best avoided parallel proceedings, Saunders J stayed the Hong Kong proceedings. See: Quaestus Capital at §§50-52.

41.In Li Lian International, the plaintiff and the defendant were in litigation in Hong Kong. The defendant wanted to join a third party into the case. Their dispute, however, was subject to an EJC referring to the Japanese Court. There were related proceedings in Japan. The defendant preferred to join the third party in Hong Kong because its claims would be time-barred under Japanese law. Unsurprisingly, Ng J set aside the leave to join the third party and stayed the Hong Kong third party proceedings. Thus understood, the case is no support for D2’s argument. See: Quaestus Capital at §53.

42.Hyundai Engineering was a decision in 2013. It is perhaps surprising that this case was not cited to G Lam J in Quasetus Capital. In this case, the defendant argued against the third party’s application to stay the third party proceedings expressly on the ground that it would result in fragmentation of proceedings and potentially inconsistent decisions. See: §§27, 33, 35.

43.A closer reading of the decision reveals that there was, in fact, no real risk of parallel proceedings or inconsistent decisions. See: §36.

44.In the case, the plaintiff was the beneficiary of a guarantee by the defendant guaranteeing a third party’s performance of obligations. The guarantee was governed by Hong Kong law. The defendant provided its guarantee at the request of and upon a back-to-back guarantee from a fourth party. The back-to-back guarantee was governed by Mainland law.

45.The third party failed to perform, the defendant’s defence was that there was fraud on the part of the third party and fourth party. It sought to join the fourth party to the Hong Kong proceedings.

46.Under Hong Kong law, the defendant as guarantor was liable to the plaintiff regardless of any fraud on the part of the third and/or fourth party. The learned judge granted summary judgement. Thus, as the judge explained, the Hong Kong proceedings had ended. The defendant having to sue the fourth party in the Mainland would not be a situation of parallel proceedings. Further, as the judge also explained, the defendant’s liability to the plaintiff did not depend on whether the fourth party was liable to the defendant or whether there was indeed fraud on the party of the third party or the fourth party. There was no real risk of inconsistent decisions.

47.None of the cases cited by Counsel for D2 actually support his argument that the risk of parallel proceedings is foreseeable and cannot be a strong reason to override an EJC. If anything, the cases underscore the point that the Court should be mindful of the need, in the interests of justice, to avoid fragmentation of proceedings.

Consequences of Permitting Breach of an EJC

48.Lastly, it is worth clarifying what it means to override an EJC. The Court is not condoning the breach of the EJC. Nor is it striking down the EJC. It is permitting the continuation of proceedings despite the EJC, by declining to grant the equitable relief of specific performance of the EJC.

49.As Lord Bingham noted, the party seeking the equitable relief may have disentitled himself of it because of his own “dilatoriness or other unconscionable conduct”, i.e., unclean hands.

50.In any event, the party is not without other redress. The Court would always take into account the consequences of the breach of the EJC, whether in crafting the terms of any interlocutory order or when providing final reliefs after determining the substantive dispute. See, e.g.: Donohue at §§26, 28, 36, 48, 75; Quaestus Capital at §61.

Application to this Case

51.Applying the legal principles to this case, I see five questions.

52.First, an antecedent question: is the dispute between P and D2 within the EJC in the CMA?

53.The parties are ad idem. P does not contend that the dispute somehow falls outside the EJC.

54.Second, has D2 disentitled itself from claiming the equitable relief of specific performance of the EJC?

55.P’s evidence shows that D2 is likely guilty of dilatoriness and other unconscionable conduct. D2 at least twice misrepresented to P that it still had all the shares. It has failed to comply with the Court’s disclosure orders. Its excuse for refusing to provide even basic information about D1 is a transparent attempt to obstruct P’s claims.

56.D2 has not produced any evidence to refute the above. It is, in any event, difficult to imagine what D2 could say about, e.g., its express statements to P that it still had all the shares, when the objective evidence shows clearly otherwise.

57.However, P has not mounted its resistance to D2’s application on the footing that D2 has disentitled itself from claiming equitable relief. Nor has either party addressed the Court on this question. Thus, in fairness, I shall not base my decision on my views on it.

58.Third, does fraud unravel all, including the EJC?

59.As I have analyzed earlier, the law is settled that fraud, unless directed at the EJC, does not unravel it.

60.Counsel for P accepted at the hearing that the fraud alleged in this case was not directed at the EJC. He clarified that it is the combination of his two points (fraud and risk of parallel proceedings) which constitutes a strong reason for overriding the EJC in the CMA.

61.Fourth, is the risk of parallel proceedings in the circumstances of this case such that the interests of justice justify the continuation of these proceedings despite the EJC in the CMA?

62.To adjudicate properly on the alleged fraud in this case, it will be critical to be able to cross reference the evidence from D1, D2, and D3 as to their purported business models, arrangements and dealings with each other, and involvement in holding or dealing in P’s shares. In addition, it will be necessary to receive evidence from third parties about the sale and transfers of P’s shares, the instructions given therefor, and the whereabouts or intended remittance of proceeds therefrom.

63.It is clearly undesirable and inimical to the interests of justice for there to be fragmentation of proceedings.

64.Counsel for D2 does not seriously dispute the above. But he makes two points. First, he says the undesirable situation was foreseeable and cannot be a strong reason for overriding the EJC. As I have analyzed earlier, I do not think this is legally correct.

65.Second, he refers to the fact that P had commenced arbitration against D1 in Singapore pursuant to the EJC in the MLA, and that D2 had commenced action against P before the Bahamas Court pursuant to the EJC in the CMA. Counsel’s point is that there are already parallel proceedings and thus the risk thereof cannot be a strong reason for overriding the EJC.

66.P has explained that it commenced the arbitration against D1 when it did not realize there had been an overall fraud. It commenced this action as soon as it realized its true case. I accept P’s explanation.

67.As to D2’s action in the Bahamas, Counsel’s point is close to suggesting that D2 has achieved a fait accompli and the Hong Kong Court is now bound. This cannot be right.

68.Neither party has adduced any evidence on Bahamas law. If, as the Court would assume in the absence of evidence, Bahamas law is the same as Hong Kong law on the issue, it cannot be said at this stage that the Bahamas action must or will necessarily proceed. It is open to P to apply to the Bahamas Court for a stay and for the Bahamas Court to consider how the interests of justice may best be served.

69.At the core of the present case are shares listed on the SEHK in Hong Kong, deposited in accounts at brokerage firms in Hong Kong, and sold or transferred between accounts in Hong Kong including through the market in Hong Kong. It is not suggested, by D2 or any documentary evidence, that the dealings between the parties took place in The Bahamas. It is not even suggested that any individuals from The Bahamas have been involved or may be witnesses.

70.D1 purported to have an office in The Bahamas. But this now appears to be false. D2 and D3 are incorporated in The Bahamas. But D2 stated in the CMA an address at a corporate centre; D3 gave what appears to be an incomplete address in the CMPA. D2 filed two short affidavits by a Mr Livadas, described as “the Director” of the parent company of D2 and “the Risk Management and Compliance Adviser” to D2. Both affidavits were sworn in Geneva, Switzerland. Mr Livadas claimed to reside in The Bahamas, but gave an incomplete address referring only to a district in The Bahamas.

71.It is difficult to imagine how any court would conclude in the circumstances of this case that the interests of justice could be well served by litigation between P and D2 in The Bahamas.

72.Ultimately, a court must be entitled to assume that parties will behave sensibly and will heed its ruling. A party cannot be heard to argue that, whatever the court’s decision may be, it would never change course.

73.As I have explained, it is in the interests of justice that all the parties to the present dispute be brought together in one set of proceedings. This is necessary for proper adjudication, thus in D2’s interest too. I must proceed on the basis that D2 will act sensibly.

74.Even if, for whatever reason, D2 chooses to press on with the Bahamas action, and two sets of proceedings run in parallel, the interests of justice are still better served by having all the relevant persons brought together in at least one set of proceedings, in a forum which has some real connection with the subject matter of the dispute.

75.I therefore find that P has shown a strong reason to justify the continuation of these proceedings despite the EJC in the CMA.

76.Fifth, is there any alternative reliefs to which D2 is entitled?

77.D2 has not claimed any alternative reliefs. As I noted above, it not being able to obtain specific performance for breach of the EJC does not mean it is without redress. It may, in due course, make the appropriate claims.

Disposition of the Summonses

78.For the above reasons, D2’s application in its Summons dated 21 December 2021 is dismissed.

79.P has taken out a Summons dated 26 August 2022 to adduce an additional short affirmation to respond to a matter which D2 only raised in its reply affidavit evidence. This is reasonable and there is no prejudice to D2. The Summons is allowed.

80.I see no reason why costs should not follow the event. There will be an Order nisi that costs of this hearing, including the costs of both Summonses, be to P, with certificate for two counsel.

81.I thank counsel and solicitors on both sides for their assistance.

Mr Jose Maurellet SC, Mr Vincent Lung, and Ms Leticia Tang, instructed by Clifford Chance, for the Plaintiff

Mr Stephen Keung, instructed by Angela Ho & Associates, for the 2^nd Defendant