Cm Credit Fund - 1 Ic and Another v. Samsung Securities Co., Ltd and Others

HCA 98/2026

[2026] HKCFI 5765

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 98 OF 2026

____________

____________

_______________

D E C I S I O N

_______________

A.  INTRODUCTION

1.By summons of 29th May 2026, the 3rd Defendant seeks to strike out the Plaintiffs’ Amended Statement of Claim against it, and have the action against it dismissed (“the Summons”).

B.  BACKGROUND

2.The agreed background, taken largely taken from the parties’ agreed chronology, is as follows.

B1.  The parties

3.The Plaintiffs are private incorporated cells of a Jersey incorporated cell company, Tiger Kingdom Fund ICC (“Gen2”).  Gen2 has a third incorporated cell (“KS1”).  Under Jersey law, all three incorporated cells (“the Gen2 Funds”) carry on business as investment funds.

4.The investment adviser of all three Gen2 Funds is Gen2 Partners Limited, a Hong Kong company (“Gen2 Partners”) with offices at Two International Finance Centre (“Two IFC”).  The incorporated investment manager of all three Gen2 Funds is Gen2 Partners Asset Management Limited, a Cayman Islands incorporated company.  The administrator of KS1 at the material time was Mainstream Fund Services (Hong Kong) Limited (“Mainstream”).  Gen2 and the Gen2 Funds’ activities were managed by Gen2 Partners’ personnel working in its offices in Hong Kong.

5.Mr Ki Young Shin (“Mr Shin”) is a director of each of the Gen2 Funds.  He is also the co-founder, Chief Executive Officer, Chief Investment Officer, a Responsible Officer and a director of Gen2 Partners.

6.The Plaintiffs maintained independent prime brokerage accounts with JP Morgan Securities LLC (“JP Morgan”), Standard Chartered Bank and BNP Paribas London Branch (“BNP”) (collectively “the Prime Brokers”).

7.The 1st Defendant (“Samsung Securities”) is a securities house incorporated in Korea.  The 2nd Defendant (“Samsung Hedge”) is an asset manager incorporated in Korea.  The 3rd Defendant is a wholly owned Hong Kong subsidiary of Samsung Securities.  The 3rd Defendant has no contractual or legal relationship with either of the Plaintiffs.

B2.  Samsung Securities’ investment in KS1

8.Between December 2018 and February 2020, Samsung Securities invested US$92m in subscribing for participating shares issued by KS1 pursuant to four subscription agreements.

9.On 4th June 2020, Samsung Securities sent written redemption notices to KS1, saying that it had exercised its redemption rights.

10.On 3rd July 2020, KS1 issued a Notice of Suspension of All Share Classes, suspending the redemption of all share classes, including Samsung Securities’ shares, saying that this was to protect all of KS1’s investors and the fund as a whole, as a result of COVID-19 causing volatility in the financial markets affecting KS1’s liquidity (“the Suspension”).  KS1 said it would endeavour to lift the suspension within twelve months.  The suspension remains in place today.  All assets attributable to the participating share classes have been held within KS1’s accounts with the Prime Brokers.

11.Despite KS1’s explanation for the Suspension, Samsung Securities continued to object to the Suspension, alleging that this constituted a breach of its contractual rights.

B3.  Attempts at dispute resolution

12.On 2nd February 2021, Samsung Securities invoked the dispute resolution clauses in the subscription agreements, seeking consultation discussions with KS1 and Gen2.

13.On 15th October 2025, Samsung Securities filed a Notice of Arbitration, commencing an arbitration against KS1 and Gen2 regarding Samsung Securities’ investment in KS1.

B4.  Actions complained of by the Plaintiffs

14.The Plaintiffs allege that between mid-2020 and 2021, the 3rd Defendant’s representatives stationed themselves in the lobby of Two IFC and confronted Mr Shin around once or twice a week for extended periods on each occasion, demanding, inter alia, that KS1 and Gen2 reverse the decision to implement the Suspension (“the Lobby Confrontations”)

15.A consultation session attended by representatives of Samsung Securities and KS1 took place in Seoul on 25th March 2021 (“the 25.03.2021 Consultation”).  The Plaintiffs say that Samsung Securities threatened that unlawful actions would be taken if its demands for immediate redemption were not met, including (1) writing to the Prime Brokers to “break” the fund, despite being warned by KS1 that doing so would have implications for other investors as well as other Gen2 Funds (including the Plaintiffs), and (2) making criminal complaints against Mr Shin.

16.On 14th April 2021, Samsung Securities wrote to each of the three Prime Brokers regarding its concerns about “potential misappropriation of assets” of KS1 (“the 14 April Letters”).  The letters were addressed and sent to the Prime Brokers’ New York and London offices.

17.On 21st May 2021, JP Morgan wrote to Samsung Securities, copying KS1 and Gen2, saying that it took “the type of allegation raised in your letter seriously”.

18.The Plaintiffs allege that on 21st May 2021, Samsung Hedge wrote to Mainstream (KS1’s administrator), requesting it to freeze all expense payments in respect of KS1 (“the Mainstream Letter”), resulting in Mainstream refusing to approve certain administrative expenses of KS1 for a period from around 21st to 28th May 2021.

19.The Plaintiffs allege that between May to September 2021, JP Morgan and BNP reduced credit facilities to the Plaintiffs, and required them to repay margin loans of over US$110m (the 1st Plaintiff) and US$585m (the 2nd Plaintiff).  They further allege that JP Morgan unwound repurchase agreements with the 2nd Plaintiff of approximately US$81m.  Their pleaded case is that all three matters were “by reason of inter alia the 14 April Letters”.

20.On 7th March 2023, Samsung Hedge filed a criminal complaint against Mr Shin in South Korea.

21.On or about 8th March 2023, Samsung Securities filed a criminal complaint against Mr Shin in South Korea.

B5.  The present proceedings

22.On 20th January 2026, the Plaintiffs issued the writ herein.  The 3rd Defendant was served within the jurisdiction.  The Plaintiffs obtained leave to serve Samsung Securities and Samsung Hedge out of the jurisdiction.

23.On 25th March 2026, the 3rd Defendant’s solicitors wrote to the Plaintiffs’ solicitors, expressing an intention to apply to strike out the claims, and dismiss the action, against the 3rd Defendant.

24.On 14th May 2026, the Plaintiffs filed an Amended Statement of Claim (“the ASOC”).  The Plaintiffs say[1] that as against the 3rd Defendant, they have sufficiently pleaded:

24.1  a claim of conspiracy by unlawful means, between Samsung Securities, Samsung Hedge and the 3rd Defendant (termed “the Samsung Parties” in the ASOC), involving various unlawful acts perpetrated by them, in particular (1) defamation by Samsung Securities through the 14 April Letters, (2) intentional interference with the contract between Mainstream and KS1 contract by Samsung Hedge through the Mainstream Letter, and (3) harassment of Mr Sung by the Samsung Parties through the Lobby Confrontations;

24.2  a claim in harassment, seeking injunctive relief to restrain the 3rd Defendant from continuing in the alleged acts of harassment.

25.Samsung Securities and Samsung Hedge have also applied to set aside the order granting leave to serve them out of the jurisdiction.

26.It is the Plaintiffs’ stance in this application that the ASOC is sufficiently pleaded and sufficiently particularised.  In other words, neither party suggests that there should be further amendment or particularisation in order to meet the 3rd Defendant’s challenges.

C.  RELEVANT PRINCIPLES

C1.  Striking out

27.There is no dispute as to the principles applicable on an application to strike out.  The parties have emphasised the following.

28.Striking out is a draconian remedy.  A party should not lightly be denied his day in court.  Accordingly, pleadings should be struck out only in clear and obvious cases.  Disputed facts are to be taken in favour of the party sought to be struck out.  The court should not decide difficult points of law in striking out proceedings.  The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out.  The mere fact that the case is weak and not likely to succeed is no ground for striking it out.  See Yifung Properties Ltd and another v Manchester Securities Corp and others, unreported, HCA 1341/2014 and HCA 1359/2014, 19th October 2015, at [10] (Au-Yeung J).

29.Although a strike out application will only be successful in a plain and obvious case, plain is not the same as simple, and obvious is not the same as short.  If, on a careful reading of the statement of claim, however complicated, it can be seen that there is no cause of action or the claim will obviously not succeed, then it will be struck out despite the apparent complexity.  See Polyline Development Ltd v Ching Lin Chuen [2021] HKCFI 483[2] at [10(1), (2)] (Mr Recorder Manzoni SC).

30.A pleading may be struck out where it is plain and obvious that the case pleaded has no factual basis, or has no solid basis capable of proof and is a myth with no substantial foundation, since the court is not bound to accept an allegation as true and proceed on a fictional basis if it is something which can clearly be shown to be incontrovertibly false.  See Chu Yue Bun v Lai Shu Woon [2021] HKCA 1929 at [35(1)] (Kwan VP).

31.If a pleading is capable of being cured by amendment, it should not be struck out; an opportunity to amend should be given instead.  However, if the pleading is so defective that no amendment can cure it or if the proposed amendment is incapable of improving the defects, the pleading is liable to be struck out and the proposed amendment should be refused.  See Chen Hongqing v Asia Cement Corporation [2023] HKCFI 2769 at [32(a)] (K Yeung J, as he then was).

32.A party should know his case and be in a position to identify the relevant evidence when he starts a claim.  It is an abuse of process for a party to start a case without a solid foundation hoping that evidence will turn up during the course of the proceedings, whether by discovery or otherwise.  See Chan Wai Keung Lawrence v Au Chi Man Albert [2021] HKCFI 2096 at [24] (Au-Yeung J).

33.Proceedings are frivolous when they not capable of reasoned argument, without foundation or cannot possibly succeed.  Where a litigant brings a claim knowing that there is no substance in it or that it is bound to fail, or if the claim is on its face so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of process.  Proceedings are vexatious when they are oppressive and / or lacks bona fides.  Vexatious implies the doing of something over and above that which is necessary for the conduct of the litigation, and suggests the existence of some spite, or desire to harass the other side to the litigation, or some other improper motive.  To decide that litigant has been frivolous or vexatious and thus has abused the process of the court is a serious finding to make, for it will generally involve bad faith on his part, and one would expect the discretion to be sparingly exercised.  See Yifung Properties Ltd at [12] to [14].

34.It is logical to consider the “no reasonable cause of action” ground first, as evidence is not admissible for the purposes of this ground.  See Polyline at [47].

C2.  The tort of harassment

35.A “good working definition” of the ingredients of the tort of harassment was approved in Sir Elly Kadoorie & Sons Ltd v Bradley (2026) 29 HKCFAR 1 at [176] to [177], [183] to [188] (Lam PJ and Lord Neuberger NPJ).  A victim of harassment has to show that:

35.1  the harasser, directly or through third parties, has, by a course of sufficiently repetitive, unreasonable and oppressive conduct, caused, and which he ought reasonably to know would cause, worry, alarm, emotional distress or annoyance to the victim.  There must be some significant adverse emotional reaction on the part of the victim;

35.2  the conduct complained of must, objectively, amount to harassment (in the ordinary sense of that word);

35.3  the harasser either intends to cause harm or injury to the victim by his harassing conduct, or is reckless as to whether the victim would suffer harm or injury as a result of the harassing conduct; and

35.4  he has suffered actual damage caused by the harassment (in addition to the distress suffered under the first requirement above).  For this purpose, physical harm, including anxiety, distress, (a fortiori) recognised psychiatric illness, and financial loss would suffice.

36.Since a company cannot suffer distress, it cannot pursue a claim for harassment on its own behalf: Sir Elly Kadoorie & Sons Ltd at [192], [195].

C3.  The tort of conspiracy

37.A case based on conspiracy must contain four elements:

37.1  the agreement between two or more persons.  The means of carrying out the agreement, whether lawful or unlawful, must be set out;

37.2  the intention to injure the plaintiff, whether predominant (in the case of a lawful means conspiracy) or merely an intention to injure (in the case of an unlawful means conspiracy, as is alleged in the present case);

37.3  the acts that were carried out pursuant to the agreement and the stated intention;

37.4  the damage caused to the plaintiff.

See Pido v Compass Technology Co Ltd [2010] 2 HKLRD 537 at [17] (Ma CJHC, as he then was).

38.For the first element (the agreement), conspiracies are usually concealed, so the existence of an agreed mechanism can only be inferred from overt acts.  Nevertheless, the formulation of a party’s cause of action should clearly and cogently be made in the pleadings. It should not be left to an exercise of drawing inferences: Chan Wai Keung Lawrence at [26]; Pido at [25].  On the other hand, there is no requirement to give particulars of the common design, or how the agreement was reached amongst the co‑conspirators: Chan Shu Chun and another v Dr Kung Yan Sum and others [2023] HKCFI 840 at [150] (Au-Yeung J).

39.Agreement can be inferred if it is proved that the alleged conspirator knew what was going on.  Therefore, it is not necessary for the conspirators to join the conspiracy at the same time.  However, the parties to it must be sufficiently aware of the surrounding circumstances and share the same object for it properly to be said that they were acting in concert at the time of the acts complained of.  It is meaningless of speak of an agreement or combination in the absence of a common understanding of the material facts being shared by all the alleged conspirators.  China Shanshui Cement Group Limited and others v Zhang Caikui and others [2025] HKCFI 1868 at [339(2)] to [339(5)] (Coleman J, as he then was).

40.For the third element (the acts), the gist of the tort of conspiracy is not the conspiratorial agreement alone, but the agreement together with the overt act causing damage.  An overt act is one which shows that the conspiratorial agreement has already been made.  Allegations of knowledge, common purpose and intention (which are not acts) cannot alter the lack of a proper plea of overt act with the aforesaid characteristics.  Such allegations also have to be viewed with some caution, because when the mass of particulars pertaining to them are examined, it may that they (impermissibly) involve piling one layer of inference on top of another in order to obtain the end product.  See Aktieselskabet Dansk Skibsfinansiering v Wheelock Marden & Co Ltd & ors [1994] 2 HKC 265 at 273B-C (Bokhary JA); Chan Wai Keung Lawrence at [29].

41.In pleading an overt act or acts for a claim in the tort of conspiracy, the pleader

“ …has to plead at least one overt act which is the act of all the alleged conspirators or, failing that, a number of overt acts which include at least one act on the part of each conspirator.  And the overt act or overt acts pleaded must be such as to show: (i) that the conspiratorial agreement alleged against the defendants had been entered into by each and every one of them; (ii) that the agreement, and not merely the intention of one person alone, was implemented; and (iii) that such implementation caused the damage complained of.

If the pleader fails to do that, then, depending on whether the failure is in respect of all the defendants or only some or one of them, then either the plea is liable to be struck out altogether or it is liable to be struck out as against some or one of the defendants.”

See Aktieselskabet Dansk Skibsfinansiering at 272D-G.

42.Where an unlawful act is alleged:

42.1  the unlawful act must be carried out pursuant to the agreement and the stated intention;

42.2  the unlawful act must be the instrument by which the loss is inflicted.  It will not be the instrument if it is only incidental to, or collateral to, the loss, because the unlawful means must be the means by which the defendant intended the harm to the plaintiff, and the means by which the harm is intentionally inflicted.

See China Shanshui Cement Group Limited at [340(7)] to [340(9)], [343].

43.Whilst the unlawful act does not need to be actionable at the suit of the plaintiff to constitute the “unlawful means”, it must nevertheless be the means (or the “instrument”) by which harm is intentionally inflicted: see Revenue and Customs Commissioners v Total Network SL [2008] 1 AC 1174 at [95] to [96] (Lord Walker).

44.For the second element (the intention to injure):

44.1  knowledge and intention are connected, because the element of intention to injure (and indeed acting in concert) cannot be inferred in the absence of the requisite knowledge;

44.2  this is why there must be sufficient identity of object amongst the parties to a conspiracy or combination, even though the advantage to be derived from that same object may not be the same;

44.3  possession of a separate aim may be evidence that the person concerned has not participated in the conspiracy combination at all, at any rate if he acted throughout in ignorance of the true facts;

44.4  the suggestion that the Court can adopt a test of “constructive intent”, derived from the fact that the defendant should have known the injury to the plaintiff would ensue, is contrary to the requirement for the unlawful means to be directed towards the plaintiff;

44.5  hence, it is not sufficient in seeking to meet the element of intention to show merely that there was knowledge to found an awareness of the likelihood of particular consequences;

44.6  lesser states of mind, such as an appreciation that the course of conduct would inevitably harm the plaintiff, would not amount to an intention to injure.

See China Shanshui Cement Group Limited at [340(1)] to [340(6)].

45.For the fourth element (damage), as already mentioned, there must be a causal link between the unlawful act and the damage: Total Network SL.  The unlawful means must have caused loss to the plaintiff, rather than merely being the occasion of such loss being sustained: Racing Partnership Ltd and others v Done Bros (Cash Betting) Ltd and others [2021] Ch 233 at [154] (Arnold LJ).

D.  THE CLAIM IN HARASSMENT

46.The only pleaded acts of harassment said to have been carried out by the 3rd Defendant are the Lobby Confrontations: ASOC paragraph 27.  (Whilst ASOC paragraph 28 goes on to plead that “the Samsung Parties” filed complaints against KS1 and Gen2, it is not suggested that the 3rd Defendant filed such a complaint.)

47.The 3rd Defendant objects to the Plaintiffs’ claim for injunctive relief on the grounds that:

47.1  the ASOC does not plead any basis for saying that the Plaintiffs owe an employer’s duty to provide a safe working environment for Mr Shin, who was not their employee;

47.2  the ASOC does not plead any threat or risk of future harassment so as to justify the grant of injunctive relief;

47.3  ASOC paragraph 27 does not plead any facts giving rise to harassment and is insufficiently particularised; what is pleaded is that the 3rd Defendant’s representatives confronted Mr Shin in the lobby of Two IFC, demanding that KS1 and Gen2 reverse the decision to implement the Suspension.

48.On the first point, ASOC paragraph 29(5) pleads that the harassment of Mr Shin “interfered with the Plaintiff’s duty to provide a safe working environment for, inter alios, Mr Shin”.  Counsel for the Plaintiffs, Ms Sara Tong SC (leading Ms Natalie So), submitted that whilst the discussion in Sir Elly Kadoorie related to the non-delegable duty of an employer under common law to take reasonable care for the safety of his employees at work, including a duty to provide a safe working environment, Cheung CJ and Lam VP indicated that the law would be developed on a case-by-case basis, and they did not rule out the possibility that other legal duties, arising in different contexts, might provide grounds for the duty-bearer to seek an injunction to prevent interference with the discharge of those duties.[3]

49.However, whilst the CFA did not rule out the possibility that the jurisdiction to grant a  Broadmoor-type injunction[4] might be extended to prevent interference with duties owed by a plaintiff to a harassment victim, other than those currently recognised as meriting such protection, it seems to me that it would still be necessary for a plaintiff to identify what that duty is, if not also the basis for extending the jurisdiction (to grant an injunction) to prevent interference with such a duty.  Cheung CJ and Lam VP were not suggesting that the jurisdiction could be extended to situations where no duty was owed.

50.In the present case, the duty pleaded is “a duty to provide a safe working environment” for Mr Shin.  However, the Plaintiffs were not (and are not) Mr Shin’s employers, so this cannot be a reference to the employer’s duty at common law to provide a safe working environment for its employees.  Ms Tong frankly acknowledged that there was no authority to support the assertion that there is a common law duty on companies to provide a safe working environment for its directors.  She submitted that the extension of the duty is arguable, but Sir Elly Kadoorie is not authority to suggest that the common law duty owed to employees can be extended; what it left open was the possibility of extending the Broadmoor jurisdiction to prevent interference with other types of (already recognised) duties to harassment victims.

51.Furthermore, and in any event, the circumstances which are said to support the extension of the employer’s common law duty to the present situation have not been pleaded.  As counsel for the 3rd Defendant, Mr Jin Pao SC (leading Mr Danny Tang) pointed out, the Plaintiffs are Jersey incorporated cells.  The workplace at which Mr Shin was said to be harassed was that of Gen2 Partners, not the Plaintiffs.  It is not apparent why the Plaintiffs could be said to owe a duty to Mr Shin at common law to provide a safe working environment.

52.The ASOC therefore does not disclose any reasonable cause of action in harassment against the 3rd Defendant.  It is not necessary to consider the other grounds for striking out this claim.

53.I will briefly address the other two points.

54.On the second point, Mr Pao submitted that whilst past harassment may entitle a plaintiff to an award of damages, such a plaintiff needs to establish a threat or risk of future harassment in order to obtain an injunction: Read v Claudio De Giovanni [2026] EWHC 243 at [65] to [66].  No such threat or risk is pleaded in the ASOC.  Ms Tong submitted that it was not necessary to plead the threat or risk (as distinct from establishing this by evidence at trial); whether or not there is a possibility of recurrence remains an issue in dispute, requiring factual investigation at trial, given that the 3rd Defendant has not provided any evidence to deny the instances of past harassment or to indicate that future instances would not occur.  She further submitted that the issue in Read was whether an interlocutory injunction should be granted, on the evidence; it was not an application for a strike out.  I accept that whilst equity will not act in vain and no injunction will be ordered where it is futile, and that the risk of future re-occurrence of the Lobby Confrontations may be said to be somewhat remote since none has taken place since 2021, this is arguably a question to be assessed at trial; the threat or risk of future harassment is not a necessary ingredient of the cause of action in harassment and does not, strictly speaking, need to be pleaded.

55.On the third point, Mr Pao submitted that the plea that the 3rd Defendant’s representatives “confronted Mr Shin around once or twice per week for extended periods on each occasion, demanding inter alia that KS1 and Gen2 reverse the KS1 Suspension Decision” did not satisfy the elements of unreasonable and oppressive conduct, or intention to harm, for a claim in harassment.  However, it seems to me that this is a matter of degree, and is arguable.

E.  THE CLAIM IN CONSPIRACY

56.The Lobby Confrontations are pleaded in the ASOC as both the overt act and the unlawful means elements of the claim in conspiracy: ASOC paragraphs 32A and 34 refer to the overt acts and unlawful acts in Sections C and D, and the only acts in those sections carried out by the 3rd Defendant are the Lobby Confrontations.

E1.  Whether proper plea of causal linkage between unlawful means and damage

57.Mr Pao’s main challenge was that the Lobby Confrontations could not constitute the “means” by which the Plaintiffs suffered loss, as there was no causal link between the Lobby Confrontations and the damage complained of.

58.That damage is pleaded in ASOC paragraph 36.  Paragraph 36(1) states:

“ As pleaded in paragraph 19 above, from early May 2021 onward, [the 1st Plaintiff] and [the 2nd Plaintiff] were respectively required by JP Morgan and BNP Paribas to repay margin loans of approximately USD 110,658,457.50 and USD 585,818,456.40, and [the 2nd Plaintiff] was required by JP Morgan to unwind repo positions of approximately USD 81,019,000, by reason of inter alia the 14 April Letters.”

59.Paragraphs 36(2) to (4) go on to plead further damage caused as a consequence of these matters, such as the 2nd Plaintiff having to liquidate various investments, and the Plaintiffs’ impaired ability to implement their original investment strategy to make investment gains.

60.Paragraph 19 details how, starting from early May, the credit facilities provided to the 1st Plaintiff and the 2nd Plaintiff by JP Morgan and BNP Paribas were reduced, and how JP Morgan initiated unwinding of various repo agreements with the 2nd Plaintiff.  What is important to note about paragraph 19 is that it pleads such matters as being “As a result of such 14 April Letters being sent to each of the Prime Brokers”.

61.On the Plaintiffs’ own case, therefore, the damage complained of was caused by the 14 April Letters, which were sent by Samsung Securities, not the 3rd Defendant.  It is clear from Section C of the ASOC that the Plaintiffs’ complaint is that Samsung Securities sent the (allegedly) defamatory 14 April Letters to the Prime Brokers, causing them to review and reduce their credit exposure to the Plaintiffs. Section C pleads JP Morgan’s comment that it took the allegations in the 14 April Letters seriously, KS1 and Gen2’s request to Samsung Securities to retract its statements, and Samsung Securities’ refusal to do so.  The damage complained of was not caused by the Lobby Confrontations.

62.It is true that in Section D1 of the ASOC, which pleads the Plaintiffs’ claim in harassment and the Lobby Confrontations, paragraph 29A concludes the section by pleading “In the premises, each of the Plaintiffs have suffered loss and damage, as further particularized in Section F below.” It is also true that, as set out above, paragraph 36 pleads that the Plaintiffs’ loss and damage was suffered “By reason of the matters pleaded in Sections C to E above”, which would include Section D1.   However, these are merely bald assertions.  No facts are pleaded which enable a causal linkage to be made between the Lobby Confrontations and the damage (allegedly) suffered by the Plaintiffs.  On the Plaintiffs’ claim as set out in the ASOC, the reduction of the Plaintiffs’ credit facilities and the unwinding of the 2nd Plaintiff’s repo agreements was JP Morgan’s and BNP Paribas’ response to the 14 April Letters.  They did not have anything to do with the Lobby Confrontations.

63.Ms Tong submitted that the harassment of Mr Shin inhibited his ability to deal with the Gen2 Funds’ management and operations at the relevant time, coinciding with the receipt of the 14 April Letters by the Prime Brokers; this was “in turn” why the Gen2 Funds suffered damage; the relevant causal nexus was therefore already clearly pleaded.[5]  However, whilst ASOC paragraph 29 did plead that the harassment did “divert Mr Shin’s attention, time and resources away from and obstruct his ability to communicate and/or negotiate with counterparties and regulators for the purpose of proper management of the Gen2 Funds (including, inter alia, KS1, [the 1st Plaintiff] and [the 2nd Plaintiff]), in circumstances where they were facing significant pressure as a result of the 14 April Letters as pleaded in paragraph 19 above…”, there is not actually any plea as to how Mr Shin’s diverted attention or obstructed communication abilities caused JP Morgan and BNP Paribas to take the decision to reduce the credit facilities extended to the Plaintiffs and JP Morgan to unwind repo agreements, or the 2nd Plaintiff to liquidate assets.  As Mr Pao submitted, the Plaintiffs do not allege that had Mr Shin not been distressed, he would have been able to persuade JP Morgan and BNP to act differently, or prevent the 2nd Plaintiff from having to liquidate its assets.

64.As regards the submission that the harassment of Mr Shin coincided with the receipt of the 14 April Letters seeks to suggest that these acts were a coordinated effort and should be considered together (in oral submissions, Ms Tong emphasised that the harassment took place at the “critical” time when the Plaintiffs were facing difficulties due to the 14 April Letters), it should be borne in mind that the Plaintiffs’ case is that the Lobby Confrontations started in mid-2020, which was almost a year before the 14 April Letters.  The pleaded case in ASOC paragraph 19 is that the reduction of the Plaintiffs’ credit facilities and the unwinding of the 2nd Plaintiff’s repo agreements was a result of the 14 April Letters being sent to the Prime Brokers, not that they were a result of the 14 April Letters together with the harassment of Mr Shin.

65.Furthermore, any suggestion that Mr Shin’s impaired abilities somehow caused the reduction of the Plaintiffs’ credit facilities has to be taken against the Plaintiffs’ expressly pleaded case that the reduction was caused by the 14 April Letters being sent to the Prime Brokers.

66.The necessary causal linkage between the unlawful means and the damage complained of has therefore not been pleaded.  On this point alone, the 3rd Defendant succeeds in showing that there is no reasonable cause of action pleaded in conspiracy.

E2.  Whether proper plea of combination

67.Mr Pao then complained that ASOC paragraph 32A, which pleaded that the 3rd Defendant, Samsung Securities and Samsung Hedge “or any two or more of them together” wrongfully conspired and combined together to carry out the overt acts pleaded in Sections C and D, was insufficiently precise.  It was said that the Plaintiffs had failed to identify when the agreement was reached, between whom it was reached, or how.  Mr Pao relied on Polyline Development Ltd, where a claim for unlawful means conspiracy was struck out (and upheld on appeal on this point [2023] HKCA 235) as it failed to plead when the agreement was reached, between whom or how it was reached (and for the corporate defendants, the human agents involved), or the nature of the agreement other than in a general way.  He also pointed out that the overt act or acts pleaded must show that the agreement between the conspirators, and not merely the intention of one person alone, was implemented (Aktieselskabet Dansk Skibsfinansiering).

68.Ms Tong submitted that sufficient facts had been pleaded to enable the court to draw inferences that an agreement had been made, that the Defendants’ unlawful acts were conducted in furtherance of such an agreement, and they did so with the necessary intention to injure.  In particular, she submitted that as the origin of conspiracies are concealed, it is usually quite impossible to establish when or where the initial agreement was made, or when or where other concentrators were recruited, and that there is no requirement to give particulars of the common design (Chan Shu Chun v Dr Kung Yan Sum).  She further submitted that Polyline Development Ltd was a case where the plaintiff had failed to plead relevant facts to ground the drawing of inferences.

69.I bear in mind that the pleading should only be struck out in clear cases.  I further bear in mind that in a case of conspiracy, the plaintiff may well have difficulty giving particulars of when or where the initial agreement was made, and when each of the conspirators joined.  Nevertheless, in the present case, because of the overt acts sought to be relied upon, it is unclear what inference the Plaintiffs seek to draw from them as regards the alleged combination.

70.In particular, the Plaintiffs rely on (1) the Lobby Confrontations (spanning mid-2020 to 2021) as the 3rd Defendant’s overt acts, (2) the 14 April Letters (of April 2021) as Samsung Securities’ overt acts, (3) the Mainstream Letter (of May 2021) as Samsung Hedge’s overt acts, (4) criminal complaints of March 2023 made by Samsung Securities and Samsung Hedge as their further overt acts, and (5) and unspecified regulatory complaints made “On divers dates since at least 2020” by “the Samsung Parties” as further overt acts of the Defendants.  If the allegation is that the agreement was made after the time of the Lobby Confrontations, then it could not be said that the Lobby Confrontations were overt acts carried out pursuant to the agreement.

71.In this regard, Ms Tong submitted at the hearing that ASOC paragraph 15 pleaded the 25.03.2021 Consultation, at which threats were made by Samsung Securities as to what would be done, and that ASOC paragraph 16 pleaded that despite the threats, the parties could not come to agreement, and that the 3rd Defendant then proceeded to carry out the threats.  If this is the time sequence alleged, then the Lobby Confrontations, which are pleaded as having started in mid-2020, could not have been carried out pursuant to a conspiracy which was arrived at following on from the 25.03.2021 Consultation.

72.Furthermore, there is no plea as to the human agents of the 3rd Defendant involved in the conspiracy, for example whether it is said that its board of directors authorised the alleged agreement or reached it with the other Defendants.

73.I agree with Mr Pao that there is no proper plea of combination.

E3.  Whether proper plea of knowledge of Samsung Securities’ and Samsung Hedge’s acts

74.Mr Pao submitted that since the Lobby Confrontations could not constitute a qualifying unlawful act, it would be necessary for the Plaintiffs to plead the 3rd Defendant’s knowledge of the other unlawful acts relied upon by the Plaintiffs.  Otherwise, it could not be said that the 3rd Defendant was party to the conspiratorial agreement, or that it had had the requisite intention to injure the Plaintiffs.  The parties to a conspiracy must be sufficiently aware of the surrounding circumstances, and share the same object, for it to properly be said that they were acting in concert at the time of the acts complained of: China Shanshui Cement Group Limited at [339(2)] to [339(5)].

75.Ms Tong submitted that (1) there was no need to plead such knowledge, since the Plaintiffs’ case is that the Samsung Parties agreed to participate in a coordinated scheme of disruption and pressure; so long as the unlawful means engaged in by each participant fell within the scope of, and was conducted pursuant to, the agreement, it was not necessary for any of them to be aware of the unlawful acts of the others; (2) in any event, the ASOC as pleaded justified the necessary inference of knowledge.  In support of (1), Ms Tong relied on Kuwait Oil Tanker Co SAK & anor v Al Bader & ors [2000] 2 All ER (Comm) 271 at [133] (Nourse LJ).

76.It can be readily understood that in an example such as that cited by Nourse LJ, where several people agree to enable each other to steal from their employer, lending their support in different ways, at different times, and taking different shares of the proceeds, there is no need for a participant to be fully aware of the circumstances of the others’ theft in order for him to be liable as a conspirator, provided that his own theft falls within the scope of the agreement.  In the present case, however, given that the Lobby Confrontations are not a qualifying unlawful act, the 3rd Defendant would need to have knowledge of the other conspirators’ overt acts in order for any inference of a conspiratorial agreement arising from those acts to include the 3rd Defendant as a participant.  All that is pleaded in this regard is ASOC paragraphs 33 to 34, where it is said that each of the Samsung Parties’ unlawful acts were carried out on behalf of each other, and the earlier parts of the ASOC, where it is said that the Samsung Parties were under common control and within the same group of companies, and acted together when dealing with Samsung Securities’ subscriptions in KS1 and objecting to the Suspension.  However, a plea that the Defendants cooperated in relation to Samsung Securities’ initial investment, or even its protest at the Suspension, does not amount to a plea of knowledge of the relevant circumstances regarding the conspiracy.  Nor is a bare plea that Samsung Securities and Samsung Hedge carried out unlawful acts on behalf of the 3rd Defendant an adequate plea of the 3rd Defendant’s knowledge.

77.However, as this point is premised on the Lobby Confrontations not being a qualifying unlawful act in the first place, it does not add much to the 3rd Defendant’s case.  This is also the case with the next point.

E4.  Whether proper plea of intention to injure the Plaintiffs

78.I agree with Mr Pao that in any event, even if it could be said that there is an adequate plea of knowledge on the part of the 3rd Defendant, this would not amount to a sufficient plea of an intention to injure the Plaintiffs, as opposed to an intention to injure, say, KS1.  As he points out, the ASOC pleads acts targeted at KS1 and Gen2:

78.1  in the 14 April Letters, Samsung Securities stated that it was writing “in respect to [KS1], managed by [Gen2]” (ASOC paragraph 18);

78.2  the Lobby Confrontations consisted of demands that “KS1 and Gen2 reverse the KS1 Suspension Decision” (ASOC paragraph 27);

78.3  the regulatory complaints were filed against KS1 and Gen2 (ASOC paragraph 28(1);

78.4  the criminal complaints against Mr Shin alleged that he had caused KS1 to breach its contractual obligations (ASOC paragraph 28(2); and

78.5  in the Mainstream Letter, Samsung Hedge requested a freezing of expense payments in respect of KS1.

79.The unlawful means must be directed at the plaintiffs; it is not enough that the defendant “should have known” that injury to the plaintiff would ensue (China Shanshui Cement Group).  Thus it is not sufficient that the Plaintiffs plead that Samsung Securities was told at the 25.03.2021 Consultation that its actions would harm other Gen2 funds.

E5.  No reasonable cause of action in conspiracy

80.The ASOC therefore does not disclose any reasonable cause of action in conspiracy against the 3rd Defendant.  It is not necessary to consider the other grounds for striking out this claim.

F.  DISPOSITION

81.I order that as against the 3rd Defendant, the Plaintiffs’ Amended Statement of Claim endorsed on the Amended Writ herein be struck out, and the action dismissed.

82.I further make an order nisi that the Plaintiffs are to pay the 3rd Defendant’s costs of and occasioned by the action, including the costs of the Summons, with certificate for two counsel, to be summarily assessed.  The 3rd Defendant has already lodged and served its statement of costs.  The Plaintiffs have leave to lodge and serve a list of objections, in bullet point form limited to three pages, within seven days.  The 3rd Defendant has leave to lodge and serve a reply, in bullet point form limited to two pages, within five days thereafter.

Ms Sara Tong SC leading Ms Natalie So, instructed by MinterEllison LLP for the 1^st and 2^nd Plaintiffs

Mr Jin Pao SC leading Mr Danny Tang, instructed by Debevoise & Plimpton LLP for the 3^rd Defendant