Ctbc Bank Co., Ltd. v. Industrial and Commercial Bank of China Limited

HCCL 3/2024

[2025] HKCFI 4966

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMMERCIAL ACTION NO 3 OF 2024

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BETWEEN

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D E C I S I O N

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1.The applicable principles for a stay of execution pending appeal[1] are as set out in Star Play v Bess Fashion [2007] 5 HKC 84 (as Ma J then was):

1.1  whilst the Court embarks on a balancing exercise, the starting point is that a successful party is not to be deprived of the fruits of his success;

1.2  the burden is on the appellant to show good reasons to justify a stay.  The mere existence of an arguable appeal is the minimum requirement, but it is not sufficient in itself;

1.3  if the appellant has a strong appeal, this would usually in itself enable a stay to be granted;

1.4  if the appellant has merely an arguable appeal, he would need to go on to show good reasons, such as that the appeal would be rendered nugatory without a stay.  In that regard, whatever the nature of the order or judgment appealed from, the court will still require evidence as to why an appeal will be rendered nugatory without a stay, if that is the contention;

1.5  whether a stay would prejudice the respondent must also be borne in mind.

2.As Mr Yu for the Plaintiff points out, the authorities cited by Mr Tang for the Defendant were not concerned with an application for a stay pending appeal, with one exception.  The exception is LM v SCCM, unreported, CACV 62/2013, 7^th May 2013.  I agree with Mr Yu that the decision was consistent with the principles in Star Play.  Leave had been given to appeal, so that the arguability requirement was satisfied.  The Court of Appeal went on to consider the facts that (1)  the appeal was just two weeks away, so that it was sensible to defer the trial in the underlying proceedings (an application by a mother against her ex-husband for sole custody of their children), to save the time and costs of preparing for it, (2)  further and more seriously, to allow the trial to go ahead, at a time when the outcome of the appeal might still be unknown (the trial had been fixed to take place just two weeks after the appeal), might result in orders being made which would be difficult or impossible to undo, involving the welfare of the children, and which might be in conflict with orders already made in the Singapore matrimonial proceedings.  Without a stay pending appeal, the father might have suffered irremediable prejudice.

3.I do not agree that an application for stay pending appeal can be treated as merely a case management application.  I consider the Defendant’s application by reference to the principles in Star Play.

4.In the present case, the Defendant must have an arguable appeal, since the Court of Appeal has granted leave to appeal.  The Defendant suggests, but does not actually seek to argue, that it has strong grounds.  Instead, it says that:

4.1  the Court of Appeal’s judgment in the appeal may dispose of the underlying proceedings since it goes to jurisdiction;

4.2  accordingly, it would be a waste of time and costs to proceed with the underlying proceedings;

4.3  the Court of Appeal’s direction for the appeal to be fixed for an early date suggests support for the Defendant’s argument that it would be undesirable for the underlying action to proceed when the issue of jurisdiction has not yet been determined;

4.4  there is a risk of decisions being made which conflict with those made in the mainland proceedings.

5.As regards the risk of conflicting decisions, I agree with the Plaintiff that this will not happen if the trial does not take place before the appeal is determined.  As a matter of practicality, this is extremely unlikely to happen, as Mr Tang accepts, given that the appeal is to be heard at an early date, whilst the trial is unlikely to take place before 2027, according to the parties.  In any event, as Mr Yu suggests, at the upcoming CMC, the Defendant can seek a direction that the trial be fixed for a period after the hearing of the appeal.

6.As regards the fact that the appeal relates to jurisdiction and may dispose of the underlying proceedings, the Defendant suggests that it would be sensible to deal with a logically prior set of proceedings first.  As Mr Yu pointed out, the authorities relied on by the Defendant for this submission were not (save for LM)  concerned with a stay pending appeal.

7.As regards the submission that it would be a waste of time and costs to proceed with the underlying proceedings, Mr Yu points out the following, with which I agree:

7.1  any such prejudice would be purely monetary and can be compensated for by an order of costs, and the Plaintiff is good for the money, being a licensed bank with active operations in Hong Kong.  In relation to the Defendant’s reliance on Re Chime Corporation Ltd, unreported, HCMP 4146/2021, 11th March 2005, where Kwan J (as she then was)  stayed eight sets of proceedings pending the outcome of an appeal in related proceedings, Mr Yu points out that the costs to be saved in that case were of an extraordinary scale, having regard to the discovery and investigations then contemplated.  The present case is quite different;

7.2  the costs which might be wasted are insignificant compared to the size of the Plaintiff’s claim;

7.3  the bulk of the costs have already been spent.  Witness statements are due to be exchanged tomorrow; the Plaintiff’s statements are ready and the Defendant has indicated that it does not require any extension of time.  The only significant remaining step is the preparation of a single joint expert’s report on PRC law, and the parties could re-engage the single joint expert already instructed in the course of the forum dispute, who produced a report for that purpose at modest costs.

8.Mr Tang submits that there is no rush to proceed with the present case. However, this cannot be a good reason to seek a stay.

9.Mr Yu submits that if the proceedings were to be stayed, the Plaintiff would suffer prejudice more than that which the Defendant would suffer from any delay.  It is claiming for reimbursement under a letter of credit in the amount of 63m RMB together with interest.  Staying the proceedings would likely lead to further delay of the trial dates, as the Plaintiff would not be able to set it down until after the appeal has been determined.  This could increase the risk that the Plaintiff would have difficulty in getting its intended witnesses to attend trial to give evidence, as there is turnover of junior staff, and as one of the crucial witnesses is reaching retirement age.  Mr Tang criticises the Plaintiff for not condescending to particulars of the witnesses involved, but I accept the Plaintiff’s explanation that this was the best it could do in the limited time it had to file evidence before today’s hearing; it would be able to produce further evidence if the matter was adjourned but it is the Defendant which sought to proceed on the basis that today’s hearing would be a substantive rather than directions hearing.

10.I therefore do not accept that the Defendant has shown that there are good reasons for a stay pending appeal.  On the contrary, it seems to me that such a stay might prejudice the Plaintiff in a manner not compensable by the payment of costs.

11.I therefore dismiss the Defendant’s summons.

Mr Jason Yu, instructed by Eric Chow & Co, for the Plaintiff

Mr Alexander Tang, instructed by Eversheds Sutherland, for the Defendant