Dp World Djibouti Fzco v. China Merchants Port Holdings Company Ltd

HCA 763/2023

[2025] HKCFI 3861

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 763 OF 2023

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BETWEEN

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D E C I S I O N

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A. INTRODUCTION

1.This is the substantive hearing of the Defendant (“CMPH”)’s application (“the Striking-Out Application”)  by its summons dated 6 February 2025 (amended on 13 June 2025)  for an order striking out  the Writ of Summons issued and the Statement of Claim (“the 2023 SOC”)  filed by the Plaintiff (“DPWD”)  herein and dismissing this action (“the 2023 Action”).  CMPH relies on all the sub-paragraphs in Order 18 rule 19(1)  and the inherent jurisdiction of the Court in support of the Striking-Out Application.

2.In the hearing before me, Mr Benjamin Yu SC (leading Mr Lam Man Chung SC and Mr Danny Tang)  represent CMPH.  Mr Paul Shieh SC (leading Ms Sara Tong SC and Ms Natalie So)  represent DPWD.

B.  BACKGROUND

3.The background facts are not in dispute and have been summarized by Mimmie Chan J in her decision dated 20 December 2019 in HCA 1951/2018 (“the 2018 Action”)[1] on CMPH’s application to stay the 2018 Action on the ground of forum non conveniens (“the Stay Decision”).  The parties have also filed an Agreed Chronology.  The relevant facts are summarized in the paragraphs below.

4.DP World Limited (“DP World”)  has two wholly-owned subsidiaries, ie DP World Djibouti FZCO (“DPWD”)  and Dubai (International)  Djibouti FZE (“DID”).  DP World is one of the largest port operators in the world, and is listed on the NASDAQ Dubai Stock Exchange.  DPWD, DID and DP World are all incorporated and based in the United Arab Emirates.

5.CMPH is incorporated in Hong Kong and listed on the Hong Kong Stock Exchange.  CMPH is a state-owned global public port developer and investor.

6.Since 1999, DP World has been involved in the development of container terminals in Djibouti.  In 2004, the Djibouti Government and DID entered into a Concession Agreement (“the 2004 CA”), by which the Djibouti Government granted to DID an exclusive right to establish and operate a new container terminal at Doraleh (“the Doraleh Terminal”).

7.On 21 June 2006, Doraleh Container Terminal SA (“DCT”)  was set up by a law enacted by the Djibouti Parliament on 21 June 2006.  DCT was a joint venture company between the Djibouti Government (through Port Autonome International de Djibouti (“PAID”, now known as “PDSA”), the public entity having jurisdiction over the operation of ports in Djibouti, holding 66.66% shareholding)  and DP World (having 33.34% shareholding), for the purpose of building, developing and operating the Doraleh Terminal.

8.On 30 October 2006, a Concession Agreement (“the 2006 CA”)  was signed by the Djibouti Government (grantor), DCT (concessionaire), and DID (confirming party).  By the 2006 CA, the Djibouti Government granted DCT an exclusive right to develop the Doraleh Terminal.  On 22 May 2007, an Addendum was signed.  On the same date, DPWD and PAID signed a Joint Venture Agreement (“the JVA”)  to reflect their understanding on how DCT’s affairs would be governed.

9.On 6 December 2007, DCT and DPWD signed a Management Services Agreement, under which DPWD was appointed as the Manager of the Doraleh Terminal.

10.Since around 2012, the relationship between the Djibouti Government and DP World turned sour.

11.On 8 November 2017, Djibouti promulgated a Law No.202/AN/17/7^th L on Strategic Infrastructure Contracts, which allowed the Djibouti Government to renegotiate and (if necessary)  terminate all contracts relating to strategic infrastructures deemed to be contrary to Djibouti’s fundamental interests.

12.Since December 2017, the Djibouti Government demanded DPWD to renegotiate the 2006 CA.

13.In February 2018, the Djibouti Government issued a series of Presidential Decrees declaring the 2004 CA and the 2006 CA to be terminated with immediate effect.  Public officials took physical control of the Doraleh Terminal and the oil jetty, and transferred DCT’s assets, operations and personnel to a state-owned company which was appointed operator of the Doraleh Terminal in place of DCT, as well as manager in place of DPWD.

14.On 28 July 2018, PDSA notified DPWD that PDSA had decided to terminate the JVA.

15.On 20 August 2018, DPWD, DID and DCT (“the 2018 Ps”, represented by Deacons)  commenced the 2018 Action against CMPH, claiming that CMPH has unlawfully procured the Djibouti Government to breach the 2004 CA, the 2006 CA and the JVA.

16.As per the Amended Statement of Claim in the 2018 Action (“the 2018 ASOC”), the material facts pleaded by DPWD, DID and DCT’s are as follows:

(1)  the agreements concluded between the Djibouti Government and CMPH for new port-related projects include the following projects:[2]

(a)  the construction of a new multi-purpose port known as Doraleh Multipurpose Port (“DMP”), which began in around September 2014 and was inaugurated on 24 May 2017;

(b)  on 24 May 2017, the Djibouti Government signed another agreement with CMPH for the development of a second container terminal, ie the Doraleh International Container Terminal (“DICT”).

(2)  “[CMPH] is liable to [the 2018 Ps] in tort for inducing / procuring the breach of (i)  [2004 CA]; (ii)  [2006 CA]; and (iii)  the JVA.”[3]

(3)  the Djibouti Government’s breaches of the 2004 CA and 2006 CA[4], and the JVA:[5]

(a)  breach of clauses 2.01 and 5.02 of the 2004 CA;

(b)  breach of clauses 3.6.2 and 3.6.3 of the 2006 CA – the Djibouti Government had granted concessions to CMPH for construction and operation of new ports, including DMP and DICT, without obtaining prior consent from DID/DCT[6];

(c)  breach of clause 4.1.1 of the 2006 CA – the clause was breached due to the Djibouti Government’s unilateral termination of the 2004 CA and the 2006 CA and in seizing control of the Doraleh Terminal in February 2018[7];

(d)  breach of clause 17.1 of the JVA – the clause was breached by reason of PDSA’s failure to prevent the matters in subparagraph (3)(b)  above, including the development of DMP and DICT[8]; and

(e)  breach of clause 5.2(a)  of the JVA – the clause was breached by reason of PDSA’s failure to prevent the Djibouti Government from seizing control of the management of the Doraleh Terminal[9].

(4)  other elements of the tort of procuring breach of contract:

(a)  CMPH’s knowledge of the Djibouti Government’s obligations under 2004 CA and 2006 CA, as well as PDSA’s obligations under the JVA[10];

(b)  CMPH’s acts of procurement[11];

(c)  CMPH’s intention to procure the relevant breaches[12]; and

(d)  the tort is actionable under Djibouti law[13].

17.Procedural history in the 2018 Action:

(1)  On 13 February 2018, CMPH took out a summons for stay of the 2018 Action for on the ground of forum non conveniens (“the Stay Application”).  The time for filing of the Defence was extended to 28 days after final determination of the Stay Application.

(2)  By the Stay Decision handed down on 20 December 2019, Mimmie Chan J dismissed the Stay Application.

(3)  CMPH obtained leave to appeal from Mimmie Chan J, and also an extension of time to file its Defence to 28 days after the Court of Appeal’s disposal of the appeal.  There was no objection to the 28-day time extension in the event that CMPH succeeded in obtaining leave to appeal[14].

(4)  On 14 January 2022, the Court of Appeal (“CA”)  dismissed CMPH’s appeal.

(5)  Subsequently, CMPH failed to obtain leave to appeal from the CA and tried to seek leave from the Court of Final Appeal (“CFA”).

(6)  Upon a joint application by a Consent Summons dated 30 September 2022, Master Dick Ho made a Consent Order on 10 October 2022, extending the time for CMPH to file a Defence to 28 days after the disposition of the leave application by the CFA.

(7)  On 1 February 2023, the CFA’s Appeal Committee dismissed CMPH’s application for leave to appeal.

(8)  On 28 February 2023, CMPH took out a summons to challenge the authority of Deacons to act for DCT in the 2018 Action (“Authority Summons”).  The basis of the challenge is that since 26 September 2018, DCT has been placed into provisional administration by the Djibouti Court, and the board of DCT (who instructed Deacons to take all the steps on behalf of DCT in the 2018 Action, including in the proceedings in the Stay Application)  has been displaced by the provisional administrator.

(9)  By a Consent Order dated 14 April 2023, Mimmie Chan J directed, inter alia, that the time for CMPH to file its Defence be extended to 28 days after the final determination of the Authority Summons.

(10)  On 20 December 2023, the Djibouti Court made an order dissolving DCT and appointed a liquidator for DCT.  On 11 March 2024, CMPH applied to amend the Authority Summons to include the further ground that DCT’s board had been displaced by the liquidator.  On 16 April 2024, Mimmie Chan J allowed the amendment application and directed that the parties may adduce evidence concerning the new ground.

(11)  On 26 February 2025, the Djibouti Court of Appeal handed down a decision affirming the dissolution of DCT.

(12)  Originally, the substantive hearing of the Authority Summons was scheduled to take place in early March 2025.  The matter was adjourned so that CMPH would have an opportunity to file evidence to respond to the complaints raised by the 2018 Ps against the Djibouti Court of Appeal.  The substantive hearing of the Authority Summons would take place before Mimmie Chan J on 4 August 2025, with 3 days reserved.

18.On 19 May 2023, DPWD commenced the 2023 Action against CMPH.

19.There is no dispute that the 2018 Action and 2023 Action are based on the same factual background and involve some overlapping parties (ie DPWD and CMPH).  In both actions, the claim against CMPH is for procuring breach of contract.  According to DPWD, different rights in the contracts are relied upon by DPWD in the two actions.[15]

20.In the 2023 Action, DPWD sues CMPH for procuring the breach of the 2006 CA and the JVA (“2006 CA Claim” and “JVA Claim” respectively).

21.As per the 2023 SOC, the material facts pleaded by DPWD are as follows:

(1)  the agreements concluded between CMPH and the Djibouti Government for new port-related projects, ie DMP and DICT[16];

(2)  Djibouti Government’s breaches of the 2006 CA and the JVA[17]:

Breaches already pleaded in the 2018 Action

(a)  breach of clauses 3.6.2 and 3.6.3 of the 2006 CA – Djibouti Government granted concessions to CMPH for construction and operation of DMP and DICT, without obtaining prior consent from DCT[18];

(b)  breach of clause 4 of the 2006 CA – Djibouti Government’s unilateral termination of the 2006 CA and in seizing control of the Doraleh Terminal in February 2018[19];

(c)  breach of clause 17.1 of the JVA – PDSA’s failure to prevent the Djibouti Government’s breaches of the 2006 CA[20];

(d)  breach of clause 5.2(a)  of the JVA – PDSA’s failure to prevent the Djibouti Government from seizing control of the management of Doraleh Terminal[21];

New Breaches pleaded in the 2023 Action

(e)  breach of clause 12.1.3 of the 2006 CA – there is no plea in the 2023 SOC as to why and how this clause is breached

(f)  breach of clause 3.7 of the 2006 CA - by reason of the Djibouti Government’s breaches and unilateral termination of the 2006 CA, and its seizure of control of the Doraleh Terminal (which prevented DPWD from earning management fees), the Djibouti Government has failed to ensure that no steps would be taken which results in DPWD (as a Shareholder under clause 3.7)  being deprived of its investment and economic interest in the concession, and thereby has breached this clause[22];

(3)  other elements of the tort of procuring breach of contract pleaded in the 2018 ASOC are also pleaded in the 2023 SOC[23].

22.DPWD’s purpose in commencing and proceeding with the 2023 Action is “to have sight of whatever defence CMPH may have on the allegations of the Djibouti Government’s breaches of contract and its procurement of the same - which would in turn be advantageous to the conduct of both the 2018 and 2023 Actions going forward, as parties will be more cognisant of where they each stand instead of being forever tied down in interlocutory skirmishes”.[24]

23.This is also confirmed by Mr Shieh SC for DPWD in his oral submissions:

“COURT: I’m thinking whether there’s any, practically, whether there is any real benefit of having the 2023 action, because my understanding is that DPWD wants to have the 2023 action is to want to see the defence as soon as possible.

MR SHIEH: Yes. Progress with the matter. Yes.”[25]

C. GROUNDS IN SUPPORT OF THE STRIKING-OUT APPLICATION

24.Mr Yu SC on behalf of CMPH submits that the Striking-Out Application should be allowed for the following reasons:

(1)  The claims in the 2023 Action constitute an abuse of process.

(a)  In the 2023 Action, the cause of action relied upon by DPWD is same as the one in the 2018 Action, ie procuring the breach of the JVA and the 2006 CA.  DPWD is pursuing the same claim in 2 different actions against the same defendant, and this is an abuse of the process of the Court.  There are substantial overlaps between the matters pleaded and the claims in the 2018 Action and the 2023 Action.  There are some new averments or particulars in the 2023 Action, for example, DPWD pleaded reliance on provisions which were not relied on in the 2018 Action, namely clauses 3.7, 12.1.3 of the 2006 CA, and reliance on ss.1 and 8 of the English Contracts (Rights of Third Parties)  Act 1999 (“1999 Act”)[26]. However, there is no reason why these pleas could not have been made in the 2018 Action, for example, by way of amendments.

(b)  Alternatively, DPWD’s pursuit of them in the 2023 Action is in breach of the principle laid down in Aldi Stores Limited v WSP Group plc[27]. For the Aldi Stores principle, Mr Yu SC has referred me to the following:

(i)  In Aldi Stores Limited, Thomas LJ said:

“31. However, for the future, if a similar issue arises in complex commercial multi-party litigation, it must be referred to the court seised of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future.”

(ii)  In Stuart v Goldberg Linde (a firm)[28], Sedley LJ said at §77:

“77. …… as the Aldi Stores Ltd case again makes clear and as Sir Anthony Clarke MR stresses, a claimant who keeps a second claim against the same defendant up his sleeve while prosecuting the first is at high risk of being held to have abused the court’s process. Moreover, putting his cards on the table does not simply mean warning the defendant that another action is or may be in the pipeline. It means making it possible for the court to manage the issues so as to be fair to both sides.”

Sir Anthony Clarke MR said:

“§96 For my part, I do not think that parties should keep future claims secret merely because a second claim might involve other issues. The proper course is for parties to put their cards on the table so that no one is taken by surprise and the appropriate course in case management terms can be considered by the judge. In particular parties should not keep quiet in the hope of improving their position in respect of a claim arising out of similar facts or evidence in the future. Nor should they do so simply because a second claim may involve other complex issues. On the contrary they should come clean so that the court can decide whether one or more trials is required and when. The time for such a decision to be taken is before there is a trial of any of the issues. In this way the underlying approach of the CPR, namely that of co-operation between the parties, robust case management and disposing of cases, including particular issues, justly can be forwarded and not frustrated.”

(2)  Further or alternatively, the 2006 CA Claim in the 2023 Action does not disclose any reasonable cause of action.  DWPD is a non-party to the 2006 CA and cannot sue CMPH for procuring breach of the 2006 CA.

25.These grounds will be discussed in turn in the paragraphs below.

D.  DISCUSSION

D1. GROUND 1 – Abuse of process

D1.1  Similarities and differences between the 2018 Action and the 2023 Action

26.It is pertinent to cite the following in DPWD’s Skeleton Submissions dated 7 July 2025 (footnotes omitted):

“52. DPWD does not shy away from the fact that the 2018 and 2023 Actions are based on the same factual background and involve some overlapping parties (i.e. itself and CMPH). In both actions, the plaintiffs’ claim against CMPH is for procuring breach of contract (though different rights in the contracts are relied upon). That much is apparent from the pleadings themselves.

……

(4)  More importantly, the two actions are not identical. In particular, the 2023 Action pleads and pursues DPWD’s rights as a third party to the 2006 Concession based on the Contracts (Rights of Third Parties)  Act 1999 (the “1999 Act”)  … as a matter of English law and also focuses its rights under Clause 3.7 of the 2006 Concession … where the Republic expressly agreed to ensure DPWD’s investment or economic interest as Shareholder would not be deprived or substantially deprived. §52 of the 2023 SOC … further pleads that the various breaches of the 2006 Concession and JVA which CMPH is alleged to have procured are tied specifically to Clause 3.7, in that they have directly prejudiced DPWD’s investment or economic interest contrary to that provision.” (Emphasis added)

27.Thus, according to DPWD:

(1)  In both the 2018 Action and the 2023 Action, the claims against CMPH are for procuring breach of contract.

(2)  In relation to the JVA Claim in the 2023 Action, there is no dispute that the material facts relied upon by DPWD are same as those pleaded by the Plaintiffs in the 2018 Action.

(3)  The material difference between the 2018 Action and the 2023 Action is that in the 2023 Action, something new in relation to the 2006 CA Claim has been pleaded and relied upon by DPWD, ie clause 3.7 of the 2006 CA and the 1999 Act.

28.There is no dispute that the elements of the tort of inducing or procuring breach of contract are as follows[29]:

(1)  there is a contract between A and B;

(2)  there is a third party C who has knowledge of that contract;

(3)  C does an act which induces or persuades A to breach the contract;

(4)  when C did that act, he did it with intent to cause A to breach the contract, the breach of that contract being an end in itself, or a means to an end, and not merely the foreseeable consequence of C’s act; and

(5)  as a result, B suffered pecuniary loss

D1.2  The principles

D1.2.1  Maintaining two actions on the same subject matter and making the same claim against the same party

29.Mr Yu SC submits that it is an abuse of process to maintain two actions on the same subject matter and making the same claim against an identical party.  On the other hands, Mr Shieh SC submits that it is only prima facie an abuse of process to bring two actions against the same defendant in respect of the same cause of action, and the question in every case is whether, applying “a broad-merits based approach”, a party’s conduct is in all the circumstances an abuse of process.

30.Mr Shieh SC relies upon the decision of DHCJ Andrew Li in Kot See For v Kung Ho Yin & Ors[30] and submits that the relevant principles for striking out for duplicity of proceedings are as follows:

(1)  There is no presumption against the bringing of successive actions, and in a particular case there may be sensible reasons for advancing claims separately.  In every case the burden rests on the defendant to establish that it is an abuse of process for him to be subjected to the second action[31].

(2)  It is only prima facie an abuse of process to bring two actions against the same defendants in respect of the same cause of action, and in any case, the Court will assess whether there is any explanation for commencing the second action.  The crucial question is whether, in all the circumstances, a party is misusing or abusing the processes of the Court by seeking to raise before the Court an issue which could have been raised before.[32]

(3)  The question in every case is whether, applying “a broad merits-based approach”, a party’s conduct is in all the circumstances an abuse of process.[33]

(4)  The Court will rarely find that the later action is an abuse of process unless the later action involves “unjust harassment or oppression” of the defendant.[34]

31.Mr Shieh SC further submits that as to what constitutes abuse, the principles are those summarized by Simon LJ (as he then was)  in Broxton v McClelland[35]. In Lam Pak Cheung v Lin Zhen Lue[36], Fok J (as he then was)  endorsed the correctness of these principles.  The principles are as follows:

(1)  Motive and intention as such (save only where “malice” is a relevant plea)  are irrelevant.

(2)  The institution of proceedings with an ulterior motive is not of itself enough to constitute an abuse: an action is only abusive if the Court’s processes are being misused to achieve something not properly available to the plaintiff in the course of properly conducted proceedings:

(a)  achievement of a collateral advantage beyond the proper scope of the action to secure to the plaintiff something he has no legitimate claim whatever;

(b)  the conduct of proceedings not so as to vindicate a right, but rather in a manner designed to cause the defendant the problems of expense, harassment, commercial prejudice or the like beyond those ordinarily conducted in the course of properly conducted litigation.

(3)  Only in the most clear and obvious case will it be appropriate upon preliminary application to strike out proceedings as abuse of process, so as to prevent a plaintiff from bringing an apparently proper cause of action to trial.”

32.Mr Yu SC submits that it is important to bear in mind and to distinguish two types of cases.

(1)  The first type of cases is that a plaintiff brings two actions against the same defendant for the same cause of action.

(2)  The second type of cases is that a plaintiff brings two substantially overlapping actions involving different defendants and/or different causes of action.

Mr Yu SC says that in DPWD’s submissions, DPWD has amalgamated the two types of cases and ignores the nuances between them.

33.Mr Yu SC submits that:

(1)  In the first type of cases, the approach of the Court is strict, in view of the strong public interest in avoiding duplicative actions.  Mr Yu has referred me to the following authorities in support of this proposition.

(a)  In Buckland v Palmer[37], Sir Donaldson MR said:

“…… The public interest in avoiding any possibility of two courts reaching inconsistent decisions on the same issue is undoubted and this alone would suggest that two actions based upon the same cause of action should never be allowed. Equally clear is the public interest in there being finality in litigation and in protecting citizens from being ‘vexed’ more than once by what is really the same claim.” (Emphasis added)

(b)  In Choi Gain Chee v Kowloon Development Co Ltd[38], Yeung JA (as he then was)  said:

“Prima facie, it is an abuse of the process of the court to bring two actions against the same defendants in respect of the same cause of action. “The public interest in avoiding any possibility of two courts reaching inconsistent decisions on the same issue is undoubted and this alone would suggest that two actions based upon the same cause of action should never be allowed.” (per Donaldson MR in Buckland v Palmer [1984] 3 All ER 554 at 558j).” (Emphasis added)

(c)  In Lam Pak Cheung v Lin Zhen Lue[39], Recorder Fok SC (as he the was)  said:

“34. …… I am firmly of the view that the underlying subject matter of the original action and the 2007 writ action is quite clearly the same, namely the plaintiff ’s claim to ownership of [a company], and that the two sets of proceedings are materially duplicitous.

……

37. Plainly, the original action should not proceed in parallel to the 2007 writ action and both parties recognise this. ……

38. It has been held that, where proceedings are in existence based on a particular cause of action, it is prima facie an abuse of process to bring a second action based on the same cause of action and the latter action is liable to be struck out: see Buckland v Palmer [1984] 1 WLR 1109, applied in Hong Kong in Collin Navigation Co SA v Perusahaan Pertambangan Minyik Dan Gas Bumi Negara (The Pertamina) [1986] HKC 78. ……

……

46. Returning to the question before me, the problem presently facing the parties by the existence of parallel proceedings is the consequence of the plaintiff having started the 2007 writ action whilst the original action was still on foot. Plainly, the two proceedings should not be allowed to continue in tandem since there is no reason to maintain the prosecution of the original action now that the 2007 writ action has been commenced.” (Emphasis added)

(d)  In Taihan Electric Wire Co Ltd v Lee Chi Yuen[40], DHCJ Lok (as he then was)  said:

“22. It is trite law that a plaintiff cannot bring two claims against the same defendant for the same cause of action. Although TGH seeks to justify the institution of the Present Action by saying that the claims against Yuanzhi and Winful in the two actions do cover different periods of time (the 2011 Action relates to the period between June to September 2011, whereas the Present Action relates to the period from 2008 onwards), it cannot alter the fact that the complaints and the causes of action in the two actions are the same. It is certainly embarrassing for these defendants to defend two same actions against them, and I would have no hesitation in striking out the claims against Yuanzhi and Winful in the Present Action.” (Emphasis added)

(e)  In Ho Suen Chang v Ho Hin Chueng[41], Queeny Au-Yeung J said:

“23. It is an abuse of process of the court to bring two actions against the same defendant in respect of the same cause of action. The public interest is in avoiding any possibility of two courts reaching inconsistent decisions on the same issue. The latter action is liable to be struck out. See Choi Gain Gee v Kowloon Development Co Ltd, CACV 371/2005, 13 June 2006, at §§64-65, CA; Lam Pak Cheung v Lin Zhen Lue [2009] 1 HKLRD 35, at §38, Recorder Fok SC (as he then was).

24. The court should not compound the error of duplicate proceedings by consolidating the two actions instead of restoring the previous action: Upper Like Investments Ltd v Sino-Rank International Limited, HCA 17637/1999, 19 November 2012, at §§29 and 31,Recorder A Ho, SC.” (Emphasis added)

(f)  In China Health Group Limited v Chiu & Partners (A Firm)[42] Anthony Chan J said:

“43. … I consider it wrong in principle to allow 2 sets of identical proceedings to exist. There is no justification for the costs and trouble in consolidating the proceedings just to preserve what should not be allowed to continue.” (Emphasis added)

(2)  Commencement of two sets of proceedings for the same cause of action against the same defendant is an abuse of the process of the Court. At the very least, it is prima facie an abuse of process. While the plaintiff may provide justification for maintaining the two set of proceedings, there appears to be no precedent where the Court allows two actions at the same time against the same defendant for the same cause of action. Consolidation is certainly not a good answer or justification.[43]

(3)  In the second type of cases, where the overlaps between the two actions are substantial but the defendants in the two actions are different, there may be more rooms for a good reason to be supplied. The Kot See For case is in the second category. In that decision, DHCJ Andrew Li at §72 referred to Dexter Ltd v Vlieland-Boddy[44]. In that case, at §49 Clarke LJ was discussing a situation where A brought an action against B, and a later action against B or C; and that a later action against B is much more likely to be held to be an abuse then a later action against C.

34.Having considered the parties’ respective submissions and the authorities, I am in respectful agreement with Mr Yu SC.  My view is as follows:

(1)  The principle mentioned by Sir Donaldson MR in Buckland v Palmer as set out in §33(1)(a)  has been approved and applied by the Court of Appeal in Collin Navigation[45] and Choi Gain Chee, and hence is a principle binding upon this Court.

(2)  Further, what has been said by Yeung JA in Choi Gain Chee at §65 is clear and unequivocal.  That paragraph is a ratio of the Court of Appeal’s decision and is binding upon this Court.

(3)  All the first instance cases cited by Mr Yu SC speak with one voice.  It is an abuse if a plaintiff commences two actions against the same defendant for the same cause of action.  Much time and costs would be wasted if this course is allowed. Further, the public interest in avoiding any possibility of two courts reaching inconsistent decisions of the same issue should be upheld.

(4)  In the first type of cases, in accordance with the Court of Appeal’s ruling in Choi Gain Chee, it is prima facie an abuse of process to bring two actions against the same defendant in respect of the same cause of action.  The burden is on the plaintiff to show cause to justify why the two actions should be maintained in parallel.

(5)  As shown in the Lam Pak Cheung case, while the correctness of the principles in Broxton v McClelland is not doubted, in a case which falls within the first category, the plaintiff would not be able to derive assistance from those principles in resisting a striking-out application based upon duplicity of proceedings. 

(6)  Kot See For is case in the second type of cases.  The defendants in the two actions, ie HCA 743/2018 and HCA 2208/2019 (which is the action before DHCJ Andrew Li), are different.  What has been said by the learned judge in the Kot See For case must be viewed in this context.  As submitted by Mr Yu SC, the reference to Dexter Limited v Vlieland-Boddy & Ors in §72 of the Kot See For case has made it clear that the Kot See For case is indeed in the second category.  I also note that in §75 of Kot See For, the learned judge referred to Ubiquiti Networks International Ltd v Chan Kim Chuen[46]. Ubiquiti Networks is also a case in the second category.[47]

D1.2.2  Henderson v Henderson abuse

35.The principles concerning Henderson v Henderson abuse would preclude a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones, unless there are some special circumstances.  Recently, I have summarized those principles in First Laser Limited v Fujian Enterprises (Holdings)  Co Ltd[48], at §§47-52.

36.The difference between the parties is whether Henderson v Henderson abuse can exist when the earlier set of proceedings is still ongoing and has not come to an end.  As to this, Mr Yu SC submits that the answer is “Yes”, while Mr Shieh SC submits that the answer is “No”.

37.Mr Yu SC relies upon the Court of Appeal’s decision in Collin Navigation in support of his submission.  In that case, Kempster JA said at 84B-C:

“But the earlier action, in its entirety, has not yet been the subject of adjudication although on foot for six years. It is the further well-known and analogous principle, not canvassed in argument, that it is vexatious to commence a second action asking for relief which might have been sought or obtained in the first which, in my opinion, constitutes an insurmountable objection to the plaintiffs’ attempt to bring the defendants once more before the Hong Kong court: see Poulett v Hill [1894] 1 Ch 277 and Buckland v Palmer [1984] 1 WLR 1109, 1115” (Emphasis added)

38.Mr Shieh SC relies upon the first instance decision by G Lam J (as he then was)  in Yifung Developments Ltd v Liu Chi Keung Ricky[49], in which the learned judge said:

“36. In this formulation of the principle, Wigram VC was, as observed by Lord Millett in Johnson v Gore Wood & Co [2002] 2 AC 1 at p 58G, “careful to limit what he was saying to cases which had proceeded to judgment”. In Johnson v Gore Wood & Co itself the House of Lords extended the scope of the principle to a situation where the earlier action had culminated in a settlement and not a judgment: pp 32H & 59C. But I am not aware of an authority, and Ms Chan has not been able to refer me to any, where this specie of estoppel or abuse has been held to exist in relation to a later action where the earlier proceedings have not yet come to an end. Indeed, in Manson v Vooght [1999] BPIR 376, quoted by Lord Bingham in Johnson v GoreWood & Co at pp 28-29, May LJ referred (at pp 387H & 388H)  to the principle as relevant to cases where a litigant has raised a matter which should have been brought, if at all, in “earlier concluded proceedings”.

37. This is not surprising, for a principal policy underlying the rule against this kind of abuse is that there should be finality in litigation: Johnson v Gore Wood & Co, at p 31A per Lord Bingham. This public interest is generally not engaged where the earlier action is still on-going when the later action comes to be considered. The rule also protects a party from vexation and oppression. It is true that in a proper case the law may protect him, not only from being vexed by successive actions, but also from being oppressed by unnecessary multiple concurrent actions. That however is not the function of the rule in Henderson v Henderson. Ample remedy for the latter is provided by the court’s power to allow amendment of pleadings, and to order consolidation, and other case management powers, in the light of which it must be rare indeed for an order precluding a claim altogether to be an appropriate, proportionate response.” (Emphasis added by counsel).

39.Mr Shieh SC submits that what has been said by Kempster JA in Collin Navigation at 84B-C is not binding upon this Court, for Kempster JA expressly acknowledged that the principle said by him in that paragraph was not something canvassed in argument.  Mr Shieh SC submits that what has been said by Kempster JA there does not constitute any ratio of the Court of Appeal, as it is only the result of something merely assumed sub silentio, and not something considered and decided by the Court of Appeal.  Mr Shieh SC has referred me to the following authorities in support of his submissions:

(1)  In Sun Entertainment Culture Ltd v Inversion Productions Ltd[50], G Lam JA said:

“53. …… As Yuen JA said in Chiu Hoi Po v Commissioner of Police [2008] 4 HKLRD 67 at [45], what is binding is not the result of an appeal, but the reasons for it — an unreasoned decision would have no binding effect. A case is not binding authority for a proposition that has been assumed sub silentio, rather than actually considered and decided: Man King Chuen & Ors v Hong Lok Yuen International School Association Ltd & Anor [2018] 4 HKLRD 294, [44] ……”

(2)  In R (Elan-Cane)  v Secretary of State for the Home Department[51], Lord Reed PSC said:

“73. The view that these dicta were obiter is supported by the absence of any reported argument on the point: it is unlikely that the House would have decided such an important point, as part of the ratio decidendi, without its having been argued by counsel, or at least raised with them. It is also supported by the absence of any discussion of the point in the dissenting speech of the remaining member of the committee, Lord Walker of Gestingthorpe. It is unlikely that he would have ignored the point if he had understood it to be part of the ratio of the majority decision.”

40.Mr Shieh SC further submits that in any event and properly understood, Collin Navigation cannot be an authority in support of the proposition proposed by CMPH.  In Collin Navigation, the subject claims in the first action which grounded the abuse had come to an end, as the plaintiffs had chosen not to pursue the same in the statement of claim.  In other words, Collin Navigation is at its highest analogous to the situation considered by G Lam J (as he then was)  in Yifung Developments at §36, viz. “where the earlier action had culminated in a settlement and not a judgment”.  Kempster JA had been considering a situation where the relevant part of the first action (under which the subject claims could have been brought)  was no longer on foot.  He was not concerned with a situation where the earlier proceedings in which a certain claim is (or can be)  raised remain ongoing – and thus the case does not stand for any proposition that Henderson v Henderson abuse can exist even where the earlier proceedings have not been concluded.

41.With respect, I am in agreement with Mr Yu SC, and I am unable to accept Mr Shieh SC’s submissions.

(1)  In R (Kadhim)  v Brent Housing Board[52], Buxton LJ said:

“33. We therefore conclude, not without some hesitation, that there is a principle stated in general terms that a subsequent court is not bound by a proposition of law assumed by an earlier court that was not the subject of argument before or consideration by that court.

……

38. Like all exceptions to, and modifications of, the strict rule of precedent, this rule must only be applied in the most obvious of cases, and limited with great care. The basis of it is that the proposition in question must have been assumed, and not have been the subject of decision. That condition will almost always only be fulfilled when the point has not been expressly raised before the court and there has been no argument upon it …… And there may of course be cases, perhaps many cases, where a point has not been the subject of argument, but scrutiny of the judgment indicates that the court’s acceptance of the point went beyond mere assumption. Very little is likely to be required to draw that latter conclusion: because a later court will start from the position, encouraged by judicial comity, that its predecessor did indeed address all the matters essential for its decision.”[53] (Emphasis added)

(2)  Reading the Court of Appeal’s judgment in Collin Navigation as a whole, I have no hesitation in concluding that what has been said by Kempster JA at 84B-C of the law report is a ratio of the Court of Appeal. Although the point was not canvassed in argument, the Court of Appeal did consider that there was such a principle by reference to the two English cases cited in that paragraph. The Court of Appeal did not merely assume the correctness of the principle, but made a ruling on the principle after considering the two English cases. Further, the Court of Appeal held that the principle “constitutes an insurmountable objection to the plaintiff’s attempt to bring the defendants once more before the Hong Kong courts”. This must be a conclusion reached by the Court of Appeal after due consideration.

(3)  I respectfully disagree with Mr Shieh SC on his interpretation of Collin Navigation as set out in §40 above. In Collin Navigation, Kempster JA referred to Buckland v Palmer [1984] 1 WLR 1109, 1115, where Sir Donaldson MR said:

“ …… Against this must be set the public interest in seeing that justice is done. It will not be done if, for example, a plaintiff accepts payment of a small sum which is only part of his claim in the belief that the remainder is not in issue and will be paid in due course. These competing public interests will be differently reconciled on the differing facts of particular cases and this is best achieved if we hold, on principle and on the authorities to which I have referred, that (1)  it is an abuse of the process of the court to bring two actions in respect of the same cause of action but (2)  where there has been no judgment in the first action, that action can, in appropriate circumstances, be revived and amended so as to enable there to be an adjudication upon the whole of the plaintiff's claim. ……” (Emphasis added)

Viewed in context, in my view, it is clear that the principle stated by Court of Appeal in the Collin Navigation does not only cover the situation in which the first action has come to an end.

(4)  If any further authority is needed on this point, the Court of Appeal’s decision in Choi Gain Chee is a case on the point. In Choi Gain Chee, the Court of Appeal held that the second action should be struck out on the ground that that the claim therein should have been brought in the first action, even when the first action was still on foot.

(5)  Reading the Reasons for Decision in Yifung Developments, it seems that both Collin Navigation and Choi Gain Chee were not cited before the Court in that case.

(6)  Further, in Ko Hon Yue v Chiu Pik Yuk[54], while Ma CJ discussed the Henderson v Henderson abuse in §§82-85 of the judgment, Ma CJ did not limit this type of abuse to the situation in which the earlier set of proceedings had been decided or come to an end. In §83 of the judgment, the Chief Justice pointed out the following:

(a)  The doctrine is founded on an abuse of process.

(b)  It is essential when striking out a claim on this basis that an abuse is found to exist in seeking to raise in subsequent proceedings claims or issues which could and should have been raised in earlier proceedings. This abuse will usually take the form of the other party being “vexed”.

(c)  The abuse can also take the form of the administration of justice being brought into disrepute.

(d)  In considering whether a claim should be struck out under this doctrine, the Court is concerned with balancing interests: not just those of the litigants before it, but also taking into account the other interests involved in the administration of justice. In considering this type of abuse, the court is required to assess a number of factors and balance competing interests. The assessment of different factors and balancing competing interests can be said to be an exercise of a discretion.

(7)  With all the aforesaid in mind, I conclude that for the question set out in §36 above, the answer submitted by Mr Yu SC is the correct answer.

D1.2.3 Aldi Stores principle

42.I agree with Mr Yu SC that the Aldi Stores principle as set out in §24(1)(b)  above is also relevant for the purpose of the Striking-Out Application.

D1.3  JVA Claim

43.Regarding the JVA Claim, even according to DPWD, there is no material difference between the JVA Claim in the 2008 Action and the JVA Claim in the 2023 Action.  Accordingly, in relation to the JVA Claim, DPWD is bringing two claims in the two actions against the same defendant (ie DPWD)  based upon the same cause of action (ie procuring breach of the JVA).  Prima facie, the JVA Claim in the 2023 Action is liable to be struck out.

44.DPWD has put forward the following to justify maintaining two actions against CMPH:

(1)  The commencement of the 2023 Action is not unjust or abusive because DPWD has justifiable reasons to adopt this course:

(a)  The delay in the 2018 Action is indisputable, egregious and obvious.  There can be no reason why DWPD’s right to have a swift resolution of its claim should be delayed by disputes over the status and standing of DCT.

(b)  CMPH has been actively resisting the filing of any sort of defence to the allegations made against it since the 2018 Action started.  It first unsuccessfully tried to challenge jurisdiction of the Hong Kong courts, and thereafter held up the progress of the 2018 Action by taking issue with DCT’s authority to sue.  Those applications have brought with it a wholesale delay concerning all the plaintiffs’ claims pending the resolution of the Authority Summons.

(c)  In this 2023 Action, DPWD is merely extracting itself from the existing quagmire in the 2018 Action through advancing a narrower and more defined case against CMPH.  All it seeks to do is to bring its own causes of action to trial and to vindicate its rights.  It has not been able to do that in the 2018 Action (in circumstances where CMPH’s procedural objections have nothing to do with DPWD), necessitating the commencement of these proceedings.

(2)  There is no unjust harassment or oppression on CMPH by this 2023 Action, when DPWD’s claims in the 2018 Action have not even moved forward since the writ was issued in 2018. CMPH has not in any way substantively engaged with the claims in the 2018 Action at all.  There is thus no duplication of time or costs on the part of CMPH if it were to defend this 2023 Action.  Insofar as the 2018 Action does get to progress, any time and costs incurred by the parties in progressing the 2023 Action will not have gone to waste.  The parties will be subject to duties to assist the Court in efficiently managing the two actions.  Ample remedy is available to deal with concurrent actions by the Court’s power to allow amendment of pleadings, to order consolidation, and other case management powers.

45.With respect, in my view, DPWD has not put forward satisfactory reason justifying maintaining both the JVA Claim in the 2018 Action and the JVA Claim in the 2023 Action against DPWD.

(1)  As set out in §§22 and 23 above, by commencing and proceeding with the 2023 Action, DPWD aims at achieving the goal of seeing CMPH’s defence as soon as possible.  However, in my view, that goal cannot be achieved by having the 2023 Action.

(a)  As mentioned in §17(12)  above, the Authority Summons in the 2018 Action would be heard in early August 2025.  Since the authority challenge is only targeting DCT, no matter whether the challenge is allowed or not, once the Authority Summons is decided, the 2018 Action would move forward, and the 2018 Ps (including DPWD)  would see CMPH’s defence to their claim in the 2018 Action.

(b)  The decision concerning the Authority Summons in the 2018 Action would be handed down within 3 months after the conclusion of the hearing.[55] In other words, DPWD would not wait for too long before seeing CMPH’s defence.

(c)  In the Striking-Out Application in the 2023 Action, if I allow the Striking-Out Application, DPWD would have no opportunity to see CMPH’s defence in the 2023 Action. If I dismiss the Striking-Out Application, probably there would be an application for leave to appeal and for extending the time for filing the defence pending the determination of the leave application, and if leave is granted, pending the outcome of the appeal.

(d)  Viewed the matter realistically and practically, I am not satisfied that by commencing and maintaining the 2023 Action, DPWD would be able to see DPWD’s defence at an earlier time.

(2)  I am unable to agree that by commencing and maintaining the 2023 Action, CMPH is not vexed. As submitted by Mr Yu SC, maintaining two sets of proceedings for the same cause of action against the same defendant is by definition vexatious.  As stated in the above, the problem cannot be properly solved by consolidation. If the problem is to be solved by amendments to the pleadings, that would be amendments to the 2018 ASOC, adding whatever DPWD wants to add in the 2018 Action.  The 2023 Action should be struck out.

46.In my view, it is plain and obvious that the JVA Claim in the 2018 Action and JVA Claim the 2023 Action are materially the same.  To put forward the same claim against CMPH in two actions is prima facie an abuse of process.  No satisfactory reason has been put forward by DPWD to justify maintaining the JVA Claim in the 2018 Action and the JVA Claim in the 2023 Action against CMPH at the same time.  I hold that by adopting this course, DPWD has abused the process of the Court.

D1.4  2006 CA Claim

47.As summarized in §21(2)(e)  to (f)  above, there are some new matters pleaded in the 2023 Action.  Mr Shieh SC submits that the 2023 Action pleads and pursues DPWD’s rights as a third party to the 2006 CA based on the 1999 Act as a matter of English law, and also focuses its rights under Clause 3.7 of the 2006 CA where the Djibouti Government expressly agreed to ensure DPWD’s investment or economic interest as a shareholder would not be deprived or substantially deprived.  As per §52 of the 2023 SOC, it is further pleaded that the various breaches of the 2006 CA and JVA which CMPH is alleged to have procured are tied specifically to Clause 3.7, in that they have directly prejudiced DPWD’s investment or economic interest contrary to that provision. Mr Shieh SC further submits that the 1999 Act is foreign law, which is a material fact that must be pleaded.[56] Thus, according to Mr Shieh SC, the 2018 Action and the 2023 Action are not identical.

48.In my view, the differences in the two actions identified by Mr Shieh SC are matters relating to the claim based upon the 2006 CA.  I agree that in relation to the 2006 CA Claim, there are some differences between the two actions.

49.Notwithstanding the differences in relation to the 2006 CA Claim between the two actions, after due consideration, I am of the view that the 2006 CA claim in the 2023 Action should be struck out, for that claim is an abuse of process in the Henderson v Henderson sense.

(1)  There is no reason why the new matters in relation to the 2006 CA Claim in the 2023 Action cannot be added back to the 2018 Action by amending the 2018 ASOC.

(2)  Mr Shieh SC submits that DPWD may not be able to add the new matters back to the 2018 Action because of “potential limitation issues”[57]. As rightly pointed out by Mr Yu SC, particulars in support of this allegation have not been given, and the allegation has not been addressed in the evidence.  Accordingly, I do not regard the alleged limitation issues are an answer to the question posed in the subparagraph above.

(3)  In the interest of the parties and in the interest of justice, the proper course must be adding all the new matters back to the 2018 Action, so that CMPH would only face the 2006 CA Claim (as amended)  in the 2018 Action, and the Court would only need to adjudicate that claim once.  By that approach, much time and costs would be saved.  CMPH would not be vexed by DPWD’s claim based upon the matters relating to the 2006 CA twice.  Further, since the Court would only need to adjudicate the 2006 CA Claim once (ie only need to deal with that claim in the 2018 Action), the risk of having inconsistent judgments on the 2006 CA Claim (ie one judgment dealing with the 2006 CA Claim in the 2018 Action, and another judgment dealing with the 2006 CA Claim in the 2023 Action)  can be eliminated.

(4)  In relation to the 2006 CA Claim, although the two actions are not identical, there are substantial overlaps between the two actions.  For the reasons set out in §45 above, I do not think that there is any good reason for DPWD maintaining the two substantially similar claims against CMPH at the same time.

(5)  Taking all these into account, I would exercise my discretion to strike out the 2006 CA Claim in the 2023 Action, for such a claim is an abuse of process in the Henderson v Henderson sense.  In my view, this approach is consistent with the principles concerning the Henderson v Henderson abuse as pointed out by Ma CJ in the Ko Hon Yue case.  It is also consistent with the Court of Appeal’s decisions in Collin Navigation and Choi Gain Chee.

50.Further or alternatively, for the reasons set out in §49(1)  to (4)  above, I am also of the view that by pursuing the 2006 CA Claim in the 2023 Action, DPWD has breached the principle in Aldi Stores, and the 2006 CA Claim in the 2023 Action should be struck out.

D1.5 Conclusion on abuse of process

51.For the reasons set out in the above, both the JVA Claim and the 2006 CA Claim in the 2023 Action constitute abuse of process and should be struck out. That being the case, there would be nothing left in the 2023 Action. Therefore, I would strike out the 2023 Action in its entirety.

52.For avoidance of doubt, my decision here would not prevent DPWD from applying for leave to add the new matters in the 2023 SOC back to the 2018 Action by making the necessary amendments to the 2018 ASOC.

D2.  GROUND 2 – Disclosing no reasonable cause of action

53.The second ground relied upon by Mr Yu SC is that the 2006 CA Claim in the 2023 Action does not disclose any reasonable cause of action.  This is a further or alternative ground in support of the Striking-Out Application.

54.The issue here is whether DPWD, being not a party to the 2006 CA, may sue CMPH for procuring breach of the 2006 CA by the operation of the 1999 Act. Mr Yu SC and Mr Shieh SC have put forward persuasive arguments and cited various authorities in support of their respective positions.  Having considered the matter, I would refrain from expressing any view on this issue. Since Ground 1 is established, the 2023 Action would be struck out in any event.  The issue concerning the 1999 Act would probably be revisited when DPWD seeks leave to introduce the claim based upon the 1999 Act in the 2018 Action, and if leave to amend the 2018 ASOC is granted, would probably be argued at the trial in the 2018 Action.  It would not be the right time to say anything on this issue in this decision, which may preempt the arguments on this issue in the 2018 Action in future.

D3.  COSTS

55.Both Mr Yu SC and Mr Shieh SC agree that costs should follow the event, with a certificate for three counsel.  The only difference between the parties is that in the event that CMPH succeeds in the Striking-Out Application by relying upon Ground 1, whether indemnity costs should be ordered.  In view of my conclusion as stated in the above, it would be necessary for me to address the issue of indemnity costs.

56.The principles on indemnity costs are trite.  It is for the receiving party to show that the case has some special or unusual features; and that such features are not confined to an ulterior motive, an improper purpose, deception or underhand conduct on the part of the paying party.[58]

57.It is not in dispute that indemnity costs were not invariably ordered in cases where the claims were struck out for abuse of process.  Each case depends upon its own facts.

58.In Overseas Trust Bank Ltd v Coopers & Lybrand (a firm)[59], Godfrey J (as he then was)  said:

“The court has a discretion to order that the costs of the successful party to be taxed on the indemnity basis; but in my judgment, in ordinary hostile litigation it should only exercise that discretion in that way, and so depart from the ordinary rule that the costs ought to be taxed as between party and party, when it feels a proper sense of indignation at the unsuccessful party’s conduct ……” (Emphasis added).

59.DPWD has frankly told the Court that the purpose of commencing and proceeding with the 2023 Action is to have sight of CMPH’s defence to their claim as soon as possible.  By the time of the commencement of the 2023 Action, the 2018 Action had been on foot for about 5 years, yet DPWD did not have any chance to see CMPH’s defence.  The sentiment of wishing to see CMPH’s defence as soon as possible is understandable.  Although I do not agree that having the 2023 Action is the proper means to the end, I do not have any sense of indignation over DPWD’s conduct.  In the circumstances of this case, I am of the view that there is insufficient reason in support of a departure from the ordinary rule of ordering party and party costs.  In my view, costs awarded to CMPH should be party and party costs.

E.  DISPOSITION

60.I allow the Striking-Out Application and order that the Writ of Summons in the 2023 Action and the 2023 SOC be struck out, and the 2023 Action be dismissed.

61.I order that costs of these proceedings (including the costs of the Striking-Out Application and all costs reserved, if any)  be to CMPH, with a certificate for three counsel, to be taxed if not agreed.

62.Lastly, I must express my gratitude to all counsel for the very helpful assistance rendered to the Court.

Mr Paul Shieh, SC, Ms Sara Tong, SC and Ms Natalie So, instructed by Deacons, for the Plaintiff

Mr Benjamin Yu SC, Mr Law Man Chung, SC and Mr Danny Tang, instructed by Reed Smith Richards Butler LLP, for the Defendant