Soremi Investments Ltd v. China National Gold Group Hong Kong Ltd

HCA 797/2025

[2026] HKCFI 4064

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 797 OF 2025

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DECISION

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1.This is an application brought by the 2^nd Defendant (“CNGGC”) to (1) set aside and/or discharge the ex parte order of Master Ho dated 3 July 2025 (“Service Out Order”) granting the Plaintiff (“SIL”) leave to serve the Concurrent Writ of Summons on the 2^nd Defendant out of the jurisdiction, and (2) alternatively stay the action as between SIL and CNGGC permanently on the basis of forum non conveniens.

2.The background to these proceedings has been summarised in [2] to [4] of my earlier decision dated 26 September 2025 in relation to the application of the 1^st Defendant (“CNG”) for a stay of proceedings under section 20 of the Arbitration Ordinance ([2025] HKCFI 4514), and will not be repeated here.

A. PRINCIPLES AND APPROACH ON JURISDICTIONAL CHALLENGES

3.When a plaintiff seeks leave to serve a writ out of the jurisdiction under RHC O.11 r.1, he must demonstrate that:

(1)  there is a good arguable case that his claims fall within one of the “gateways” under RHC O.11 r.1(1);

(2)  there is a serious issue to be tried as regards the merits of the plaintiff’s case;

(3)  Hong Kong is the forum conveniens for the trial of the action.

See Dynasty Line Ltd v Sukamto Sia [2009] 4 HKLRD 454 at [29] (Cheung JA).

4.At the inter partes stage, the onus remains on the plaintiff to demonstrate that each of the above three matters is satisfied.  Generally, each of the three questions is to be considered as at the date of the original ex parte application. However, the court may consider all the evidence filed up to the hearing, and not just that of the plaintiff at the ex parte application.  See Hong Kong Civil Procedure 2026 Note 11/4/71.

5.To support its application, CNGGC primarily focused on the question of whether there was material non-disclosure in SIL’s ex parte application.  In particular, CNGGC contended that the court should first decide whether or not there was any material non-disclosure at the ex parte stage before addressing each of the three matters mentioned above.  That this was CNGGC’s approach is clear from how the main issues before the court were formulated in Section E of its skeleton submissions.

6.In an inter partes application where a defendant seeks to set aside the ex parte service out order, a plaintiff must, as mentioned earlier, demonstrate that each of three matters for service out is satisfied.  It seems to me that the court should therefore start with the three matters, and not with the question of material non-disclosure at the ex parte stage.  This was the approach taken by Hunter JA in Wo Fung Paper Making Factory Ltd v Sappi Kraft (Pty) Ltd [1988] 2 HKLR 346. 

(1)  In that case, the plaintiff had obtained leave to serve out, but that service out order was subsequently set aside by a master on the ground of material non-disclosure.  Upon the plaintiff’s appeal, the first instance judge found in favour of the defendant on the ground of material non-disclosure at the ex parte application and failure of the plaintiff to show a good arguable case or that Hong Kong was an appropriate forum. 

(2)  The plaintiff’s appeal to the Court of Appeal was allowed.  On the question of whether leave to serve out ought to have been granted, Hunter JA considered that the lower court should begin with the question of whether a good arguable case has been made out at the inter partes stage, and not with the question of non-disclosure. At p 358F-G, his Lordship said:

“I fear that there has been a failure in this case, in the court below, to concentrate upon the material facts, and to appreciate that disputed issues of facts simply go to the need for trial, and are of very very little value indeed in deciding whether a good arguable case has been made out. Furthermore, it seems to me that the point has to be tested by looking at the substance. That is why I am proposing to start with the question whether a good arguable case was shown at the inter partes stage. That is where I think you should start; not where judge started, and with respect where the argument started here, on the question of non-disclosure.”

7.Accordingly, where the court is faced with the question of whether the ex parte service order should be set aside at the inter partes stage, it seems to me that the analyses should focus on whether the plaintiff can satisfy the three above-mentioned requirements, namely (1) he has a good arguable case that he falls within one of the gateways in O.11 r.1(1); (2) there is a serious issue to be tried in his claim on the merits; and (3) Hong Kong is the most appropriate forum in which his case is to be tried.  As Hunter JA said in Wo Fung, starting the analyses with the question of material non‑disclosure may lead the court to focus too much on the disputed issues of facts, rather than on the substance of whether three matters are satisfied.  Moreover, at the inter partes stage, the court would in any event be entitled to consider additional evidence which might not have been available at the ex parte stage.  This would render the analysis of material non-disclosure at the ex parte stage not fully determinative.

B.  WHETHER GOOD ARGUABLE CASE ON GATEWAY

8.SIL relied on the gateway in RHC O.11 r.1(1)(c) to obtain leave to serve out. 

B1.  The Relevant Legal Principles

9.RHC O.11 r.1(1)(c) provides that service of a writ out of the jurisdiction is permissible with the leave of the court if in the action begun by the writ, “the claim is brought against a person duly served within or out of the jurisdiction and a person out of the jurisdiction is a necessary or proper party thereto”.

10.To obtain leave to serve out under the “necessary or property party” gateway, the plaintiff has to show a good arguable case that:

(1)  the claim against the “anchor” defendant involves a real issue between the plaintiff and that defendant;

(2)  it is a real issue which the plaintiff may reasonably ask the court to try; and

(3)  the foreign defendant is a necessary or proper party to the claim against the anchor defendant.

See Haller AG v Vestey International Group Ltd [2023] 1 HKLRD 39 at [30] (G Lam JA).

11.The head of jurisdiction under “necessary or property party” gateway “is not founded upon any territorial connection between the claim, the subject matter of the relevant action and the jurisdiction of the court”: Fong Chak Kwan v Ascentic Ltd (2022) 25 HKCFAR 135 at [105] (Lord Collins NPJ).  It has therefore been described as “anomalous”: Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 at [73] (Lord Collins).

12.For the purpose of deciding whether a plaintiff’s claim is within one of the O.11 gateways, a good arguable case means “something more than a prima facie case or being merely sufficient to raise an issue, but less than proof on the balance of probabilities”: China Medical Technologies Inc (in liq) v Paul, Weiss, Rifkind, Wharton & Garrison LLP (a firm) [2019] HKCFI 2631 at [50], [51] (G Lam J).

B2.  Whether the Claim against the “Anchor” Defendant Involves a Real Issue between the Plaintiff and that Defendant

13.It is common ground that SIL has made claims against CNG (CNGGC’s wholly-owned subsidiary) in Hong Kong in these proceedings.  CNG is a Hong Kong company and the writ herein was served on CNG on 23 April 2025.  On 26 September 2025, CNG’s application to stay the proceedings in favour of arbitration was dismissed: [2025] HKCFI 4514.  On 24 December 2025, CNG’s application for leave to appeal against the arbitration stay decision was dismissed: [2025] HKCFI 6417.  CNG filed its Defence herein on 8 January 2026; it has submitted to the jurisdiction of the Hong Kong court.

14.Further, on 9 October 2025, SIL obtained an inter partes Mareva injunction against CNG: [2025] HKCFI 4768 (“Injunction Decision”).  For the purpose of SIL’s injunction application, it was considered by the court that SIL has a good arguable case for the claims against CNG.

15.For the purpose of its application to serve out of the jurisdiction on CNGGC, SIL has treated CNG as the “anchor defendant” in these proceedings.

16.In these circumstances, I consider that SIL clearly has a viable claim against CNG, which involves real issues between them: Haller AG (above) at [31]. None of the material non-disclosure complaints relied upon by CNGGC would undermine this issue.  Indeed, none has been so suggested by CNGGC.

B3.  Whether the Claim against “Anchor” Defendant is a Real Issue that the Plaintiff may ask Court to Try

17.RHC O.11 r.4(1)(d) provides that where an application for the grant of leave is made under r.1(1)(c), the supporting affidavit must state “the grounds for the deponent’s belief that there is between the plaintiff and the person on whom a writ has been served a real issue which the plaintiff may reasonably ask the Court to try”.

18.In his 2^nd affidavit filed to support SIL’s ex parte application for leave to serve out, Mr Cosimo Borrelli (“Mr Borelli”) referred to SIL’s claims and stated that he believes that “there is a good arguable case that the claims against CNG involve real issues which SIL may reasonably ask this Court to try, and that there is a realistic and reasonable expectation of a trial”.

19.Indeed, from the matters set out in Section B2 above, it seems to me clear that SIL’s claims again CNG involve real issues that SIL may ask the court to try.  No submissions were made by CNGGC to dispute this. 

B4.  Whether CNGGC is a Necessary or Proper Party

20.It has been said that the fundamental rationale of the “proper party” element with O.11 r.1(1)(c) is to facilitate the trial of a common question of law or fact: Inchcape JDH Ltd v Baltrans Exhibition & Removal Ltd [1997] HKLRD 1278 at 1286B-C (Stone J).

21.Further, the question whether a person may be a “proper party” is answered by asking “supposing both parties had been within the jurisdiction would they both have been proper parties to the action?”.  A defendant will be a “proper party” if the claims against both defendants “involve one investigation” or are “closely bound up”.  See Altimo Holdings and Investment Ltd (above) at [87] (Lord Collins); Fong Chak Kwan v Ascentic Ltd [2021] 6 HKC 401 at [54] (Cheung JA).

22.As mentioned in the Injunction Decision,

(1)  the essence of SIL’s claim is that CNG and CNGGC instructed SIL’s directors appointed by CNG (“CNG’s SIL Directors”) and SIL’s CEO, Shenghong Cheng (“Cheng”), to misappropriate at least US$109.2 million of cash from SIL to Société de Recherche et d’Exploitation Minière Société Anonyme (“SSA”) in or around September 2023 (“the Wrongful Transfers”) (see [5]);

(2)  SIL’s claim involves 2 elements: (a) the transfers totalling US$109.2 million from SIL to SSA in or around September 2023 were misappropriations of SIL’s assets and (b) the misappropriations were carried out by CNG’s SIL Directors and/or Cheng on the instruction of the Defendants (see [6]);

(3)  SIL has a good arguable case on the misappropriations of assets and Wrongful Transfers and on its cause of action in conversion against CNG (see [11], [12]);

(4)  SIL has a good arguable case in respect of its causes of action in dishonest assistance, unlawful means conspiracy and lawful means conspiracy against CNG (see [21]);

(5)  SIL has a good arguable case on its pleaded claims against CNG in these proceedings (see [23]).

23.CNGGC submitted that SIL’s use of the phrase “CNG and/or CNGGC” in its Statement of Claim (“SOC”) means that CNGGC is not a necessary or proper party.  I am unable to accept this submission.

24.First, in paragraph 7 of its SOC, SIL has made it clear that it advances the same four causes of action against both CNG and CNGGC, namely conversion, dishonest assistance, unlawful means conspiracy and lawful means conspiracy. In the light of this, there should be little ambiguity that SIL’s case is that both CNG and CNGGC are liable for each of the four causes of action.  Accordingly, I agree with SIL’s submission that the phrase “CNG and/or CNGGC” in Sections I, J, K and L of the SOC (in relation to each of the four causes of action) should therefore be understood as referring to both CNG and CNGGC.  For the same reason, I disagree with CNGGC’s submission that “no distinct wrongful act is alleged against CNGGC”. 

25.As to SIL’s claims in conversion, they are pleaded in two alternative ways.  First, SIL contends that CNG’s SIL’s Directors and/or Cheng wrongfully procured or caused the Wrongful Transfers of the misappropriated funds amounting to conversion, for which CNG and CNGGC were vicariously liable (SOC §86).  Further, SIL contends CNG and CNGGC converted the misappropriated funds by instructing CNG’s SIL Directors and/or Cheng to carry out the Wrongful Transfers (SOC paragraph 87).  Given the way how SIL has pleaded its conversion claims against CNG and CNGGC, it seems to me that both claims will involve one investigation by SIL and are closely bound up.  For instance, the degree of control by CNGGC over the CNG’s SIL Directors and Cheng will be one of the questions which have to be investigated.  Supposing both parties had been within the jurisdiction, both CNG and CNGGC would have been proper parties to the action in respect of the claims for conversion.  The presence of CNGGC in the proceedings is likely to facilitate the trial of common questions arising out of SIL’s conversion claims.  

26.As far as its causes of action in dishonest assistance are concerned, SIL has pleaded a series of acts of assistance on the part of a number of individuals such as CNG’s SIL Directors, Cheng, the Soremi Management Team (to be defined below) and the “Soremi Attendees” (SOC §91).  Given how the roles of CNG and CNGGC were intertwined according to the evidence (see below), it seems to me that CNGGC’s presence in the proceedings will facilitate the resolution of the common questions in relation to their roles in the Wrongful Transfers. 

27.In relation to the its causes of action in unlawful means and lawful means conspiracy, SIL has in fact pleaded that (1) both CNGGC and CNG (and others) were partes to the alleged agreement/combination (SOC §§94 and 98), (2) both CNGGC and CNG (and others) carried out the overt acts or the lawful acts (SOC §§95 and 99), (3) each of CNGGC and CNG (and others) had an intention to injure SIL (SOC §96).  Supposing both CNG and CNGGC had been within the jurisdiction, both of them would clearly have been proper parties to the proceedings for the purpose of the allegations of conspiracy made against both of them.  The conspiracy claims against both CNG and CNGGC clearly require one investigation and are closely bound up. 

28.Accordingly, I consider CNGGC to be a proper party for the purpose of O.11 r.1(1)(c).  I do not believe this conclusion is undermined by CNGGC’s submissions that unparticularised allegations of control and instruction were pleaded to support SIL’s claims against CNGGC, or CNGGC’s grounds of material non-disclosure.  As rightly acknowledged by CNGGC, the strength of merits against the foreign defendant is irrelevant for determining whether the jurisdictional requirement has been satisfied under O.11 r.1(1)(c).  As will be shown in the next section, I am unable to agree with CNGGC’s submission that there is a paucity of evidence against CNGGC.

29.For the above reasons, I conclude that SIL has demonstrated a good arguable case that CNGGC is a proper party to the claims brought by SIL against CNG.

C.  WHETHER SERIOUS ISSUE TO BE TRIED

30.It is common ground that the standard of “serious issue to be tried” is a “relatively low threshold” because at the stage of a service out application, the prospects of the plaintiff’s case “can only be investigated to an extent limited by the inherent nature of the exercise”.  It is irrelevant whether the court thinks the plaintiff’s chances of success are 90% or 20%.  See China Medical Technologies Inc (in liq) v Paul, Weiss, Rifkind, Wharton & Garrison LLP (a firm) (above) at [222] (G Lam J).

C1.  SIL’s Case against CNGGC

31.As mentioned above, SIL has pleaded four causes of action against CNGGC.  It is fair to say that all of them are based, to differing degree and extent, on the notions that CNGGC was in control over SIL, SSA and the Soremi Project through CNG’s SIL Directors and Cheng and the Soremi Management, and that CNGGC had instructed CNG’s SIL Directors and Cheng to act.

32.SIL has clarified in correspondence and in submission that its case of “control” is to be understood in its ordinary meaning, and that it does not need to rely on any legal concept of control.  SIL contends that control is the shorthand of what is pleaded in SOC §23, namely that CNG’s SIL Directors and Cheng were accustomed to act in accordance with the instructions of CNGGC. 

33.SIL has adduced extensive evidence through Mr Borrelli’s 2^nd affidavit (filed to support SIL’s application for service out) and his 5^th affidavit (filed to oppose CNGGC’s application to set aside the Service Out Order) to support an inference of control by CNGGC and instructions given by CNGGC.

34.In his 2^nd affidavit, Mr Borrelli referred to, amongst other evidence, the following evidence:

(1)  CNG and CNGGC share aligned interests and objectives because the investment in the SIL Group was a top-down decision initiated by CNGGC.  CNGGC led the due diligence and negotiation of the acquisition of the 65% shares in SIL in 2013 and 2014.  The Soremi Project was publicly endorsed by CNGGC as a model project under the Belt and Road Initiative of Mainland China.

(2)  CNGGC appointed directors to SIL and appointed the management team (“Soremi Management Team”) designated to the Republic of Congo (“RoC”) to SSA upon the completion of the acquisition of the 65% shares in SIL, even though the personnel were appointed by CNG on paper. 

(3)  Cheng was appointed as the CEO of both SIL and SSA.  He openly promotes himself as a “CNGGC person” and has written an article promoting CNGGC’s fulfilment of its social responsibility in the RoC through SSA.  On 16 October 2024, he accompanied CNGGC’s senior executive in his meeting with the President of the RoC to explore further cooperation between the RoC and CNGGC.

(4)  The Mainland China employees expatriated from CNG and CNGGC for “all managerial roles and the vast majority of technical expertise and supervision” are either “lifers” loyal to CNG and CNGGC or individuals who were attracted by the key factor that the Soremi Project is a CNGGC-backed project.

(5)  Apart from the fact that CNGGC is a major Mainland Chinese state-owned enterprise, there is no nexus between SIL and the Mainland China.  There was no legitimate reason for SIL to transfer the Wrongful Transfers in US dollars to Mainland China.

35.Further, in Section C.1 of his 5^th affidavit, Mr Borrelli identified, amongst other evidence, the following additional evidence.

36.First, SIL has adduced evidence to suggest that it was CNGGC which directed the investment into the Soremi Project through CNG.  Such evidence shows, amongst other things, that (1) CNGGC’s management committee convened a formal meeting on 17 December 2013 to approve the investment into the Soremi Project, which would serve as CNGGC’s “stepping out” project, by acquiring the 65% shares in SIL; (2) CNGGC was responsible for the pre-investment due diligence and negotiations; (3) CNGGC assembled the expatriate team and ensured the finance and operational support of the Soremi Project, and (4) CNGGC’s project team for the investment included Junhu Tong (“Tong”) (who was later appointed a CNG’s SIL Director and CNG’s Director) and Cheng (who was later expatriated to the RoC as the Deputy General Manager of Materials Procurement and Product Sales of SSA).

37.Further, SIL has adduced evidence to seek to show that CNGGC was able to direct and had directed CNG to carry out its instructions, including causing the Wrongful Transfers.  Such evidence shows, amongst other things, the following:

(1)  CNGGC has always been CNG’s sole shareholder and has accepted that “in that capacity can pass shareholder resolutions and nominate individuals to the board of CNG”;

(2)  CNGGC was responsible for recruiting CNG’s employees;

(3)  Most of CNG’s directors were concurrently the “group leaders” of CNGGC.

(4)  In the witness statement dated 7 March 2025 of the Chairman of CNG (Hou Chenguang (“Hou”)) filed in the “Dividend and Unjust Enrichment Arbitration”, Hou said:

(a)  “CNG is a wholly owned subsidiary of [CNGGC].  As such, CNG’s Senior Leadership Team reports to the [CNGGC].  Significant decisions made by CNG also need to be escalated for consideration and approval by [CNGGC].  There is also a Senior Leadership Team of [CNGGC], who are responsible for reviewing and approving decisions relating to the [CNGGC], including CNG.  The Senior Leadership Team of [CNGGC] consists of a cross-functional group of senior leaders overseeing the business operation of [CNGGC].”

(b)  “Between September 2020 and November 2024, I held consecutive positions as the Deputy General Manager and then the General Manager of the Audit and Legal Compliance Department at [CNGGC].  In these roles, I reported directly to the Senior Leadership Team of [CNGGC] and I was responsible for managing the audit, legal, and risk affairs of [CNGGC].  As part of the audit and legal team at the [CNGGC] headquarters, my team was also tasked with managing and overseeing significant risk issues and legal disputes involving subsidiaries in which [CNGGC] holds direct shares. Consequently, my team and I would periodically receive reports on significant legal matters and disputes reported by these subsidiaries to headquarters.  When necessary, my team members and I would participate in discussions regarding these matters and report the progress of these transactions or disputes to the leadership of [CNGGC].”

(c)  “This was the first time in the history of [CNGGC] that a directly-owned subsidiary became the respondent in an international arbitration case, and it involved [CNGGC’s] first project built overseas, so [CNGGC] and CNG paid great attention to this matter.”

(d)  “After receiving the first partial award from the arbitral tribunal on 9 February 2023, the Senior Leadership Team of [CNGGC] immediately convened a dedicated meeting to review the situation.  A dedicated legal team was formed to handle the case, with me appointed as the team leader.  Together with the legal team, I dedicated several days to review of the acquisition process, the arbitration case's history and the key issues involved.  Since then, I have taken personal charge and actively engaged in the day-to-day management of this significant legal dispute, participating in discussions on critical matters and procedures, and reviewing key documents.”

(e)  “I am aware from my discussions with the other leaders of [CNGGC] that they had the same understanding and this understanding formed a key part of the basis for our decisions in relation to how CNG should proceed during the dispute and in relation to the ongoing operation of the Soremi Project ...”

(f)  “The leadership of CNG and [CNGGC] … find themselves unable to agree with the Tribunal’s decision in the First Partial Award.”

(5)  CNGGC regards CNG as its international investment platform and is responsible for recruiting CNG’s employees.

38.Moreover, SIL has adduced evidence to seek to show that CNGGC was able to direct and had directed SIL (before it was put into receivership), SSA and the Soremi Management Team to carry out its instructions, through CNG or others.  Such evidence shows, amongst other things, the following:

(1)  Cheng assisted CNGGC to deliver a letter to the RoC Ministry of Miners.

(2)  SIL’s account in Paris, which originally contained funds forming the subject of the Wrongful Transfers, was controlled by persons with close connection to CNGGC immediately before and during the Wrongful Transfers.

(3)  CNG’s position in the “Dividend and Unjust Enrichment Arbitration” is that SSA and the Soremi Project were managed and operated by expatriates from CNGGC who were loyal to CNGGC and were only prepared to stay on the Soremi Project on the understanding that it was controlled by CNGGC.  Two members of the Soremi Management Team gave direct evidence that most members of the Soremi Management Team were transferred from CNGGC and its subsidiaries.

(4)  Public records, including those published by CNGGC, demonstrate that CNGGC controlled the Soremi Project.

(5)  In resisting the Gerald Parties attempt to resume control over the Soremi Project, Cheng and Zhang claimed that they would only act in accordance with instructions from “Beijing”, which was understood to refer to CNGGC.

39.After the filing of Mr Borrelli’s 5^th affidavit, CNGGC sent a letter dated 13 February 2026 to the RoC’s ambassador to the People’s Republic of China.  The letter refers to the Soremi Project being “invested in and built by” CNGGC.

40.Having considered the evidence adduced by SIL holistically, I consider there is a serious issue to be tried on the question of whether each of CNG, SIL (before its receivership), SSA and the Soremi Management Team was under the control of CNGGC, which directed them to carry out its instructions.  

41.CNGGC made submissions in Annex 4 of its skeleton submissions to argue why the matters relied upon by Mr Borrelli do not assist SIL in showing control by and instructions from CNGGC.  Essentially, CNGGC submitted that all the matters relied upon by Mr Borrelli are standard attributes of shareholding and therefore do not support SIL’s case against CNGGC.  I am unable to agree that all the events referred to by Mr Borrelli are explicable as ordinary features of corporate governance.  For example, Mr Hou’s witness statement given at the “Dividend and Unjust Enrichment Arbitration” suggests that significant decisions made by CNG needed to be escalated and approved by CNGGC, and that CNGGC formed a dedicated senior leadership team to handle disputes with the Gerald Parties after the First Partial Award.  Such evidence is not merely reflective of the ordinary features of corporate governance, and may arguably be used to support the inference sought to be drawn by SIL that it was CNGGC which directed CNG to carry out its instructions, including the Wrongful Transfers.  Further, I agree with SIL’s submission that Annex 4 does not negate a serious issue to be tried on the issues of control and instructions of CNGGC as the evidence is to be viewed cumulatively and not individually.

42.Having reviewed the SOC and the evidence adduced by SIL, and subject to CNGGC’s grounds to be mentioned below, I believe SIL has discharged its burden to demonstrate that there is a serious issue to be tried on each of the four causes of action against CNGGC.

C2.  CNGGC’s Grounds to Dispute Serious Issue to be Tried

43.It is necessary to examine the various grounds advanced by CNGGC to determine whether the serious issue to be tried raised by SIL can be negated.  CNGGC relied on the following 6 grounds as material non‑disclosure:

(1)  SIL failed to differentiate between the case against CNG and that against CNGGC by using “and/or” formulation in the SOC.

(2)  SIL failed to explain its case of control against CNGGC.

(3)  SIL failed to properly present the evidence against CNGGC.

(4)  SIL failed to properly present the without prejudice evidence.

(5)  SIL failed to fairly present the opinions from the BVI Court.

(6)  SIL failed to disclose facts relevant to the most convenient forum.

44.The first 5 grounds will be dealt with in this section whilst the last ground on forum will be addressed in Section D below. 

45.As to CNGGC’s first ground, I accept there is force in CNGGC’s complaints that the pleaded case against CNGGC has been obscured by the repeated use of “CNG and/or CNGGC” in the SOC.  However, in view of matters set out in Sections B4 and C1 above, I do not agree that the SIL’s case against CNGGC remains obscure.  Further, I do not consider there has been material non-disclosure by SIL at the ex parte stage in relation to its case against CNGGC.  In his 2^nd affidavit, Mr Borrelli stated the following by way of making full and frank disclosures on the question of the alleged control by CNGGC over CNG’s SIL Directors, Soremi Management and Cheng:

“91. CNGGC may seek to argue that it did not instruct CNG’s SIL Directors, Soremi Management Team and/or Cheng to carry out the Wrongful Transfers and other wrongful acts particularised in the SoC. In particular, CNGGC may argue that it did not have control over CNG’s SIL Directors, Soremi Management Team and/or Cheng. CNGGC may argue that SIL’s case is based entirely on inferences, and SIL does not possess actual evidence suggesting that CNG and/or CNGGC instructed the Wrongful Transfers. CNGGC may also argue that CNG was prevented by the Receivership Order, Receivers’ Injunctions and other orders by the Tribunal from interfering with the operation of SIL and/or SSA.

92.  Based on the evidence set out in in Section C.2 above, I believe that there is at least a serious issue to be tried that CNGGC had instructed CNG’s SIL Directors, Soremi Management Team and/or Cheng to carry out the Wrongful Transfers and the other wrongful acts.  The Wrongful Transfers were made shortly after Mimmie Chan J had dismissed CNG’s application to set aside the FPA on 30 August 2023 (at paragraph 31 above) and around the time when the Tong’s Threats were first made at the meeting on 12 and 13 September 2023 (at paragraph 57 above).  At the time of the Wrongful Transfers, SIL was controlled by CNG’s SIL Directors and Tong was both a director of SIL and CNG.  Pending discovery, SIL has provided the best evidence it has in its possession.  Furthermore, the Wrongful Transfers predated the relevant orders from the BVI Court and Tribunal which prohibited CNG from interfering with the operations of SIL and/or SSA.”

In the light of the above, I believe SIL has made clear its case against the CNGGC insofar as there were any uncertainties arising from the “and/or” pleas in the SOC or references in the earlier parts of Mr Borrelli’s 2^nd affidavit.

46.As to CNGGC’s second ground, I am unable to agree that SIL has failed to explain the meaning of “control” in its case against CNGGC.  As mentioned above, SIL’s case of control against CNGGC is entirely based on facts and evidence.  This is demonstrated by the evidence mentioned in Section C1 above that SIL seeks to rely on to support its case of control against CNGGC.  It is therefore unnecessary to deal with CNGGC’s extensive submissions on whether SIL’s case of control against CNGGC might be based on the legal concepts of shadow or de facto directorship, the parent/subsidiary relationship, agency law, or the rule in Said v Butt.  Further, I repeat the statements quoted above from Mr Borrelli’s 2^nd affidavit.  I disagree that there was any material non-disclosure of the proper basis of SIL’s case on control against CNGGC.

47.CNGGC’s third ground relates to the complaint that SIL has bundled evidence against CNG and CNGGC so as to create a misleading picture to the court in relation to the employment history of CNG’s directors and Cheng.  However, as shown in Section C1 above, there were references in Mr Borrelli’s 2^nd affidavit which were only specific to CNGGC, and not to “CNG and/or CNGGC”.  Insofar as CNGGC complained that additional materials were mentioned in Mr Borrelli’s 5^th affidavit which were not mentioned in his 2^nd affidavit (such as whether certain individuals ever held concurrent directorships at CNG and CNGGC), I do not find such a comparison exercise helpful.  In my view, matters such as absence of concurrent directorships are arguments on the merits which CNGGC might raise at trial, and are not of such weight that their omission may mislead the court in exercising its jurisdiction under O.11 r.1(1)(c) and its discretion whether or not to grant permission: Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269 at [181] (Lawrence Collins J).  I do not believe it was necessary for SIL to have disclosed such matters at the ex parte stage.  What was said by Toulson J in MRG (Japan) Ltd v Engelhard Metals Japan Ltd [2004] 1 Lloyd’s Rep 731 at [31]-[32] is useful to explain why it is unnecessary to disclose all matters which go to the merits of the action in an application for leave to serve out:

“31.  Mr Gruder submitted that if the applicant is not required to disclose all matters which go to the merits of the action, but only those matters which go to the questions whether there is a serious issue to be tried, whether the court has jurisdiction to hear it and whether England is clearly the appropriate forum, the result will be to reduce the judge’s role on such an application to a “rubber stamping” exercise.  I would not agree with that description, although I do agree that the issues which the judge is required to consider are limited.  This is because the judge is at this stage concerned with the question whether the court should assume jurisdiction, rather than with the question who is likely to win.

32.  It is also right to bear in mind the overriding objective of the Civil Procedure Rules and practical considerations.  If an applicant for permission to serve out of the jurisdiction is required not only to show that the claim raises a serious issue to be tried, but also to make full and fair disclosure about possible defences available to the defendant, notwithstanding that such information would not affect the question whether there is a serious issue to be tried, the question will arise (as it has arisen in this case) what amounts to full and fair disclosure.”

48.CNGGC’s fourth ground relates to the alleged threats made by Tong at meetings on 12 and 13 September 2023 (“Tong’s Threats”).  CNGGC submitted that such threats were referred to in the SOC and Mr Borrelli’s 2^nd affidavit but SIL failed to disclose at the ex parte stage (1) the without prejudice nature of the meetings (2) any purported basis for claiming any exception to the without prejudice privilege rule and (3) SIL withdrew reliance on without prejudice materials in its injunction application against CNG.  In my view, the pleas and evidence on the Tong’s Threats were only amongst the many pleas and the many pieces of evidence that SIL relied on to support its case against CNGGC.  Even assuming SIL had no legitimate basis to refer to the Tong’s Threats at the ex parte stage, I do not believe the inclusion of such pleas and evidence in the materials would have had any material impact on whether SIL could establish a serious issue to be tried on the merits.  Similarly, at the present inter partes stage, even if I were to disregard all the references to Tong’s Threats in the SOC and SIL’s affidavit evidence, I would still have come to the view that a serious issue to be tried has been shown by SIL on the merits.  Indeed, no references to the Tong’s Threats were made in Section C1 above.  In other words, in view of how Mr Borrelli dealt with the Tong’s Threats in his 2^nd affidavit, I do not believe the effect of those parts is such as to mislead the court in any material respect concerning its jurisdiction or the question of whether SIL has raised a serious issue to be tried: cf BP Exploration Co (Libya) Ltd v Hunt (No 1) [1976] 1 WLR 788 at 798H-799A (Kerr J).  It follows that it is unnecessary to consider CNGGC’s other submissions on material non-disclosure in relation to the complaints raised under this ground, or the contents of Ms Hu Jia’s affirmation dated 17 June 2026. 

49.CNGGC’s fifth ground is SIL had selectively and unfairly used the opinions of the BVI Court in Mr Borrelli’s 2^nd affidavit to support SIL’s application for leave to serve out.  CNGGC submitted that SIL quoted certain observations of Wallbank J in the BVI proceedings between the Gerald Parties, SIL and CNG regarding Cheng but without disclosing the learned Judge’s comments made on other occasions.  It is clear that this matter goes to the admissibility, and possibly the weight, of a piece of evidence which may be relied upon to support SIL’s case on the merits.  It goes to the merits of SIL’s claim, and not to the limited matters which concern the court in an application for leave to serve out of the jurisdiction.  In particular, I do not think this matter is material to the question of whether SIL can demonstrate a serious issue to be tried.  As shown in Section C1 above, it is unnecessary to have regard to the observations of the BVI Court for the court to conclude that SIL has shown a serious issue to be tried.

50.For all these reasons, I do not think CNGGC’s first 5 grounds of objections would negate the serious issue to be tried raised by SIL.  I also disagree with CNGGC’s general submission that its complaints on material non-disclosure are interwoven into fabric of the question of whether there is a serious issue to be tried or the gateway issue.

51.For the avoidance of doubt, nothing in this Decision should be understood as in any way endorsing a practice of legal practitioners in using excessive “and/or” pleas in pleadings.  Such pleas generally do not promote clarity and often result in ambiguity and imprecision.  As explained above, SIL’s repeated use of the “and/or” pleas has not proved fatal in the present application to set aside the Service Out Order.

D.  WHETHER HONG KONG IS FORUM CONVENIENS

52.On the question of forum, the general principles were restated by the Court of Final Appeal in SPH v SA (2014) 17 HKCFAR 364 at [51]:

“(1) The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action i.e. in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

(2) In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these two matters at this stage is fatal.

(3) If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

(4)  If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer.  Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if he is able to establish to the court’s satisfaction that substantial justice will be done in the available appropriate forum.”

53.The first question is whether SIL can show that Hong Kong is the appropriate forum under the principles governing forum conveniens for the trial of the action.  SIL has brought proceedings against both CNG and CNGGC for the same causes of action.  For the purpose O.11 r.1(1)(c), SIL’s claims are brought against CNG as the anchor defendant, who has submitted to the jurisdiction of the Hong Kong court and has filed its Defence to defend the claims before the Hong Kong court.  For the same purpose, I have already concluded that CNGGC is a necessary party to SIL’s claims against CNG in Hong Kong.  It is clear that it would be desirable to avoid multiplicity of proceedings in Hong Kong and elsewhere for the trial of common and connected issues.  As Cooke J held in Credit Agricole Indosuez v Unicof Ltd [2004] 1 Lloyd’s Rep 196, the existence of the proceedings in the forum “virtually concludes the question” on the appropriate forum in favour of allowing proceedings to go ahead against the necessary or proper foreign party to those proceedings.  At [19], his Lordship said:

“Langley J held, in granting permission to serve out, having been informed of potential arguments in favour of Kenyan jurisdiction, that he was satisfied that England was the proper place to bring the claims against SDV in accordance with 6.21(2A). The forum conveniens issue was effectively resolved by the necessary or proper party issue and the question of discretion under CPR 6.21. Although the burden is on a claimant to show, when seeking leave to serve out of the jurisdiction, that England is the appropriate forum where the case can most suitably be tried for the interests of all the parties and the ends of justice, the fact of continuing proceedings in England against other defendants on the same or closely allied issues virtually concludes the question, since all courts recognise the undesirability of duplication of proceedings and the lis alibi pendens cases make this clear. Although there are connecting factors with Kenya to which I refer later in this judgment, if proceedings are going on in this jurisdiction on the self-same or linked issues, this is clearly the most appropriate forum for those common and connected issues to be tried between all relevant parties.”

54.Further, SIL has also adduced evidence to show why Hong Kong has the most real and substantial connection with the action:

(1)  CNG is a Hong Kong company.  Its Chairman (Hou), Senior Legal Manager (Yan) and Deputy General Manager (Tian) have previously given evidence in person at the Dividend and Unjust Enrichment Arbitration in Hong Kong.  The Vice President of SIL and SSA (Han) and the Vice President of SSA (Chen) are located in the RoC but also had previously evidence at the same arbitration in Hong Kong.

(2)  Mr Borrelli is a director of SIL and will give evidence on behalf of SIL in this action.  He is based in Hong Kong.

(3)  Multiple related proceedings between CNG, SIL and the Gerald Parties have been ongoing in the arbitration (seated in Hong Kong) and the High Court of Hong Kong.  The legal representatives of the parties and the judges in Hong Kong have developed familiarity with the evidence and arguments.

(4)  Documentary evidence collated for the Hong Kong arbitration is relevant to this action and is in Hong Kong.

I accept that these are additional factors pointing in favour of Hong Kong as the more appropriate form.

55.In these circumstances, I am satisfied that SIL has shown that Hong Kong is the appropriate forum for the trial of SIL’s claims against CNG and CNGGC. 

56.I now turn to CNGGC’s application to seek a permanent stay of the proceedings between SIL and CNGGC in favour of Beijing No 4 Intermediate People’s Court of the PRC on the basis of forum non conveniens.  In order for it to succeed, CNGGC must show that Hong Kong is not the natural or appropriate forum, and that there is another forum which is clearly or distinctly more appropriate than Hong Kong.  In my view, CNGGC cannot establish either of these requirements.

(1)  As mentioned above, I consider Hong Kong to be the appropriate forum for the proceedings for the trial of SIL’s claims against CNGGC.  The first requirement is therefore not satisfied.  I note that no direct submissions were made on behalf of CNGGC to contend why Hong Kong is not the natural or appropriate forum.

(2)  CNGGC submitted that the Beijing No 4 Intermediate People’s Court is clearly or distinctly more appropriate than Hong Kong.  It argued that on SIL’s case, the Wrongful Transfers moved funds to SSA’s account in Beijing and they are said to have been instructed by individuals making decisions in the Mainland.  However, there is no acceptance by CNGGC that it was the “main protagonist” or the “mastermind” behind the Wrongful Transfers.  CNGGC has therefore adduced no evidence to show that its relevant witnesses are all based in the Mainland. Indeed, CNGGC has not identified which individuals will be giving evidence on its behalf to defend the claims by SIL.  In these circumstances, I am not satisfied that CNGGC has demonstrated that the Beijing No 4 Intermediate People’s Court is clearly or distinctly the more appropriate forum than Hong Kong to determine the disputes between SIL and CNGGC.

57.Given that CNNGC cannot satisfy the two requirements, it is unnecessary for me to (1) consider whether SIL has shown that it will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong, or (2) balance the advantages of the alternative forum with the disadvantages that SIL may suffer.

58.For these reasons, I am not satisfied that I should permanently stay the present proceedings between SIL and CNGGC on the ground of forum non conveniens.

59.CNGGC further submitted that SIL failed to disclose certain facts which point to connection with the Mainland.  This is its sixth and last ground of objection. In my view, there is no merit in this objection. 

(1)  In paragraphs 97 and 98 of his 2^nd affidavit, Mr Borrelli stated that “CNGGC may seek to argue that since it is a Mainland Chinese company, the torts and equitable wrongs complained of must have been committed in Mainland China and therefore PRC law shall apply as the governing law” and “the governing law of the torts and equitable wrongs remains unclear to SIL at the current stage, as it depends on complex issues of law and fact, including the place of commission of the torts and equitable wrongs”.  

(2)  Insofar as CNGGC complained that SIL did not disclose that the relevant decision makers would have been based in the Mainland, I repeat what I said earlier about this being a disputed fact and that CNGGC has not adduced any evidence on the identity of its factual witnesses or where they are based.  In these circumstances, I do not accept that SIL should have disclosed at the ex parte stage that the relevant decisions makers would have been based in the Mainland.

(3)  I do not consider that SIL has made any material non-disclosure in Mr Borrelli’s 2^nd affidavit to disclose sufficient connecting factors to the Mainland.

E.  DISPOSITION

60.For the above reasons, SIL has demonstrated that (1) there is a good arguable case that its claims fall within the “necessary or proper party” gateway under RHC O.11 r.1(1)(c), (2) there is a serious issue to be tried as regards the merits of SIL’s case, and (3) Hong Kong is the forum conveniens for the trial of the action. I decline to set aside or discharge the Service Out Order or permanently stay the action as between SIL and CNG on the ground of forum non conveniens.

61.I dismiss CNGGC’s summons dated 4 November 2025.

62.I make an order nisi that the costs of and occasioned by CNGGC’s summons dated 4 November 2025 are to be paid by CNGGC to SIL, to be summarily assessed.  As the parties have already submitted their respective statement of costs, I direct that (1) CNGGC is to lodge and serve its statement of opposition (of not more than 5 pages) to respond to SIL’s Statement of Costs dated 18 June 2026 within 7 days from the date of this Decision, (2) SIL is to lodge and serve its statement of reply (of not more than 3 pages) within 7 days thereafter, and (3) the summary assessment of costs will be carried out on the papers.

Mr Charles Manzoni SC, instructed by Karas So LLP and Mr Jason Karas, Solicitor Advocate, of Karas So LLP, for the Plaintiff

Mr Victor Joffe SC and Ms Esther Mak, instructed by Herbert Smith Freehills Kramer, for the 2^nd Defendant