Gucci Gucci S.R.L. and Another v. Siber Hegner and Co. (H.K.) Ltd and Others

HCA004395/1985

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Coram: Hon. Hooper, J. in Chambers

Dates of hearing: 24-28 November 1986 and 1 December 1986

Date of delivery of judgment: 2 January 1987

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JUDGMENT

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1. There is before me for determination an application filed on the 5th of March 1986 on the part of the 1st, 2nd, 5th, 7th, 9th and 10th defendants for an order that all further proceedings in this action may be stayed until further order under the inherent jurisdiction of the court on the following grounds:-

2. A similar application was filed on the 7th of November 1986 on behalf of the 11th and 12th defendants in the same terms.

3. Judgment has already been entered against the 3rd, 4th, 6th and 8th defendants.

4. This action arises out of the importation by the 1st defendant into Hong Kong and the distribution by the 1st defendant to defendants 2 to 11 of handbags and other leather goods bearing the trademark "Gucci Plus". There is no dispute that the 1st defendant has since 1984 imported such goods, and there is no dispute that the defendants 2 to 11 have sold various items bearing this trademark.

5. It is claimed by the plaintiffs that the 1st defendant's use of the trademarks and devices in connection with leather goods not of the plaintiffs' manufacture or merchandise is an infringement of the 1st plaintiff's registered trademark and is a passing off of such goods as those of the plaintiffs.

6. It is alleged that the 2nd to 11th defendants have also infringed the Gucci trademark and passed off the goods they sold as those of the plaintiffs' goods.

7. The 1st plaintiff is an Italian company incorporated in Italy with its registered office in Florence, Italy. The 2nd plaintiff is a limited company incorporated in Hong Kong and has its registered office at the Gloucester Tower in the Landmark, Pedder Street, Hong Kong.

8. The 2nd plaintiff is a Hong Kong company and carries on business as a local subsidiary of the 1st plaintiff and owns, manages and operates two shops in the Landmark selling luggage, articles of clothing, fashion, accessories for men and women supplied to it by the 1st plaintiff.

9. It is common ground that the 1st plaintiff is and has been for 5 years the registered proprietor of trademarks in Hong Kong under the Trademarks Ordinance which said trademarks comprise the word "Gucci", the "G.G. Device" and "the Gucci Shield Device", and that all these trademarks are valid and subsisting. Particulars of them and their registration are set out in the statement of claim. Both plaintiffs claim to have used the trademarks extensively in Hong Kong and in para. 11 of the statement of claim, they allege that no person other than the plaintiffs are entitled to use any of their said trade-marks or devices which have for many years been distinctive of the merchandise of the 1st Plaintiff and none other. They allege that there is tremendous and extensive goodwill and valuable reputation in the business in Hong Kong in connection with the plaintiff's trademarks "Gucci Double G logo" for both plaintiffs to protect.

10. In para. 13 of the statement of claim, the plaintiffs allege that: -

"Investigation revealed that the man behind the "Gucci Plus" products is Paolo Gucci, one of the members of the Gucci family and business in Florence, Italy. A few years ago, due to a bitter disagreement between Paolo Gucci and the rest of his family who were involved in the Gucci business Paolo Gucci was removed from the board of all Gucci companies. However, whilst he was the managing director of Gucci Parfums S.R.L., a company with no legal connection to the plaintiffs, Paolo Gucci entered into an agreement on 1st April 1982 with the 12th defendant herein Dodomark 1 SRL of Florence, Italy, in which he licensed Dodomark 1 S.R.L. to make handbags and leather goods with the "Gucci Plus" trademark. The licence extended to several countries including Hong Kong. Neither Paolo Gucci nor Parfums was authorised to enter.. into such a licence for Hong Kong. Paolo Gucci has never received any authorisation or consent from the 1st plaintiff, who is the owner of the trademarks, to use the mark "Gucci Plus" on the goods which have now infiltrated into the market, through the defendants."

11. However, in para. 14 of the statement of claim, the plaintiffs claim that they had not at any time assigned their Gucci trademark to Parfums and this mark as registered validly remains the property of the 1st plaintiff.

12. In para. 15, the plaintiffs allege that the 1st plaintiff had never authorised Parfums to grant any licence to any party to use the "Gucci" trademark in competition with their own well established business and that of the 2nd plaintiff in Hong Kong. They allege that the proprietory rights in and to the trademarks in Hong Kong remains vested in the 1st plaintiff and Parfums had no right whatsoever to give any party, including Dodomark 1, S.R.L. a licence to manufacture any "Gucci" trademark. And they allege in para. 16 that the 2nd plaintiff was responsible for establishing the business of "Gucci" in Hong Kong. The valuable business which has been developed by the 2nd plaintiff and the substantial investment of the 2nd plaintiff in this particular line has been stated in earlier paragraphs. Both plaintiffs therefore have a very valuable business to protect in Hong Kong.

13. The plaintiffs therefore ask for an injunction restraining the defendants from passing off, an injunction restraining them from infringing the 1st plaintiff's trademarks, damages, interest, delivery up of all offending goods, discovery and such further or other relief as may be just.

14. The defendants allege that the 1st plaintiff and Gucci Parfums are related and associated companies comprising or forming part of the Gucci Group being the group of companies formed by and for the purpose of carrying on the Gucci family business. They allege that shares of Guccio Gucci and Gucci Parfums have at all material times belonged to members of the Gucci family and at all material times, the said companies have had common directors, consisting of members of the Gucci family. Further, they allege that at all material times, the Gucci Group has formed a common enterprise whose goods are called Gucci goods. Some Gucci goods are made by servants or employees of a member of the Gucci Group but the bulk thereof are made by independent Italian leather merchants acting pursuant to orders from a member of the Gucci Group. They therefore claim that the members of the Gucci Group have procured a substantial reputation and goodwill in the trademarks particularized by the plaintiffs and that the reputation and goodwill extends to the Gucci Group as a whole and not to any particular member of the Group. Furthermore, they allege that the association in the minds of the purchasing public and the trade exists between goods bearing the said trademarks or any of them and the Gucci Group as a whole and the same are distinctive of the merchandise of the Gucci Group and not of any particular member thereof.

15. In para. 14 of their defence, the defendants admit that the goods imported into and distributed in Hong Kong by the 1st defendant were supplied to it by Dodo Mark I S R L (the 12th defendant and the 2nd plaintiff on the counterclaim).

16. In para. 15 of the defence, the defendants allege that by a Licence and Agreement in writing dated 15th March 1982, Dodo Mark I was granted by Gucci Parfums rights as therein referred to in respect of trademarks of the Gucci Group. They allege also that there is no provision under Italian Law invalidating the same. Further or alternatively, they allege that the Gucci Group have accepted payment of royalties under the 15th March 1982 Agreement, thereby treating the same as valid and/or ratifying the same.

17. In the same paragraph, they allege that the Civil Court of Florence, Italy, has by a final judgment dated 15th June 1984 refused an application by the Gucci Group for relief restraining Dodo Mark I from acting in pursuance of the Licence granted by the 15th March 1982 Agreement. For reasons contained in the said judgment, Dodo Mark I and through it the 1st defendant and its customers, are entitled to do all the acts complained of herein. The goods imported by the 1st defendant sold in Hong Kong are goods made by Dodo Mark I under the Licence granted by the 15th March 1982 Agreement and are goods of and associated with the Gucci Group. The defendants admit that Paolo Gucci is one of the members of the Gucci family and that he was removed as a director of Gucci Parfums on the 21st June 1982, but they plead that prior to his removal, by a resolution dated the 17th February 1982, Gucci Parfums resolved inter alia to modify article 4 of the Articles of Association of the company to a form which permitted the company, inter alia, to license trademarks relating to the company's business. It was further resolved and agreed that the company be administered by a board of directors comprising 8 persons, including Paolo Gucci. It was further resolved that 4 such directors (including Paolo Gucci) should have separate powers of signature (i.e. each might sign on behalf of all others without their agreement). They further allege that there is no provision of Italian Law invalidating the said resolution.

18. In para. 19 of the defence, the defendants allege that the 15th March 1982 Agreement was signed by Paolo Gucci pursuant to the powers aforesaid, alternatively pursuant to his powers as Managing Director of Gucci Parfums. Furthermore, in para. 20 they allege that the persons present at the meeting during which the resolutions aforesaid were passed comprised or included members of the Gucci family being the shareholders in Gucci Parfums and the shareholders and directors of Guccio Gucci being the persons who control and run the Gucci Group. It is therefore alleged that by the 15th March 1982 Agreement, Dodo Mark I was licensed to manufacture handbags and leather goods bearing the Gucci Plus trademarks and that such licence extended to countries including Hong Kong. In para. 23 of their defence, the defendants plead estoppel on the basis that by reason of the relationship between Guccio Gucci and Gucci Parfums and by reason of the resolutions passed on 17th February 1982, Guccio Gucci has empowered Gucci Parfums to license the trademarks used by Gucci Parfums and further or alternatively enabled them to hold themselves out as entitled so to do. Furthermore, Guccio Gucci has permitted Gucci Parfums to use the marks of the Gucci Group without restraint or supervision, (save from that arising by virtue of the common directorships and shareholdings aforementioned). They allege that Dodo Mark I relied upon the said actual or ostensible authority of Gucci Parfums when it entered into the 15th March 1982 Agreement. Therefore, the plaintiffs are estopped as against Dodo Mark I and anyone claiming through it (including in particular the 1st defendant) from denying the right of Gucci Parfums to grant the licence contained in the 15th March 1982 Agreement.

19. The defendants therefore deny that there have been any acts of infringement or passing off in Hong Kong.

20. The 1st plaintiff to the counterclaim asks for a declaration that it is entitled to sell and distribute freely in Hong Kong handbags and like goods bearing the Gucci Plus trademarks and the 2nd plaintiff to the counterclaim asks for a declaration that it is entitled to export to Hong Kong and sell and distribute freely handbags and like goods bearing the Gucci Plus trademarks.

21. In their reply and defence to counterclaim, the plaintiffs join issue with the defendants on most of the allegations contained in the defence.

22. In particular in reply to para. 15 of the defence and counterclaim, the plaintiffs say that the said Licence Agreement of the 15th March 1982 is invalid under Italian Law. They give particulars as follows:-

The plaintiffs further say that the judgment of the Civil Court of Florence, Italy dated the 15th June 1984 referred to by the defendants in para. 15 of the defence and counterclaim is neither final nor on the merits and, further, that the parties in these proceedings are not such as to be bound by such judgment. The plaintiffs do not admit that the' goods imported into and distributed in Hong Kong by the 1st defendant were supplied to it by Dodo Mark I or that the goods sold by the 2nd, 5th, 7th, 9th or 10th defendants were supplied by the 1st defendant. The plaintiffs deny that anyone other than the lst and 2nd plaintiffs were responsible for establishing the business in goods bearing the 1st plaintiff's trademarks in Hong Kong and they deny that anyone other than the 1st and 2nd plaintiffs has a valuable business in such goods in Hong Kong.

23. Mr Clayton for the plaintiffs has pointed out that Dodo Mark I is stated to be the 12th defendant in these proceedings but that it was joined as a defendant at its own instigation and that it was joined because it wishes to be a plaintiff to the counterclaim. The plaintiffs have not sought any relief against Dodo Mark I because they do not seek to assert any right against Dodo Mark I in Hong Kong and make no allegation against it. He points out the plaintiffs did not consent to the 12th defendant being joined as a defendant but they did not object.

Principles Governing Stay of Proceedings

24. There are a number of leading cases which are regularly referred to in these Courts on the subject of stay. The Atlantic Star⁽¹⁾, Rockware Glass Ltd. ⁽²⁾, The Abidin Daver⁽³⁾ are three authorities from the House of Lords in England on the subject. I have been referred to two local decisions, the Palawan⁽⁴⁾ and the Adhiguna Meranti ⁽⁵⁾.

25. On the last day of the hearing of the present proceedings, the recent House of Lords decision in the case of Spiliada Maritime Corp. v. Cansulex Ltd. ⁽⁶⁾ came to my attention.

26. Lord Goff has now summarized the law as follows:-

"1    The basic principle was that a stay would only be granted on the ground of forum non conveniens where the court was satisfied that there was some other available forum, having competent jurisdiction, which was the appropriate forum for the trial, that is, in which the case could be tried more suitably for the interests of all the parties and the ends of justice.

2      In general the burden of proof rested on the defendant to persuade the court to exercise its discretion to grant a stay, although in respect of such matters raised to persuade the court to exercise its discretion the burden would lie on the party asserting it.

Furthermore, if the court was satisfied that there was another available forum which was prima facie the appropriate forum the burden would then shift to the plaintiff to show that there were special circumstances by which justice required that the trial should nevertheless take place in England.

3      The burden resting on the defendant was not just to show that England was not the natural or appropriate forum for the trial but to establish that there was another available forum which was clearly or distinctly more appropriate than the English forum.

In that way, proper regard was paid to the fact that jurisdiction had been founded in England as of right. There was the further advantage that, on a subject where comity was of importance, it appeared that there would be a broad consensus among major common law jurisdictions.

4      Since the question was whether there existed some other forum which was clearly more appropriate for the trial of the action, the court would look first to see what factors existed which pointed in the direction of another forum.

It was' desirable to adopt the expression of Lord Keith in The Abin Daver ([1984] AC 398, 415) when he referred to the "natural forum" as being "that with which the action had the most real and substantial connection".

So it was for connecting factors in that sense that the court had first to look; and those would include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction and the places where the parties respectively resided or carried on business.

5      If the court concluded at that stage that there was no other available forum which was clearly more appropriate for the trial of the action, it would ordinarily refuse a stay.

6      If, however, the court concluded at that stage. that there was some other available forum which prima facie was clearly more appropriate for the trial of the action, it would ordinarily grant a stay unless there were circumstances by reason of which justice required that a stay should nevertheless not be granted.

In that inquiry, the court would consider all the circumstances, including those which went beyond those taken into account when considering connecting factors with other jurisdictions. One such factor could be the fact, if established objectively by cogent evidence that the plaintiff would not obtain justice in the foreign jurisdiction.

As to how the principle was applied in cases where the court exercised its discretionary power under Order II of the Rules of the Supreme Court, an apparent difference of view was to be found in the speeches of Lord Diplock and Lord Wilberforce in the Amin Rasheed case ([1984] AC 50).

The statement of Lord Wilberforce was the applicable principle. It bore a marked resemblance to the principles applicable in forum non conveniens cases.

It was inevitable that the question in both groups of cases was that expressed by Lord Kinnear in Sim v. Robinow, namely, to identify the forum in which the case could be suitably tried for the interests of all the parties and for the ends of justice.

Clearly, the mere fact that a plaintiff had a legitimate personal or juridical advantage in proceedings in England could not be decisive. To give the plaintiff his advantage at the expense of the defendant was not consistent with the objective approach inherent in Lord Kinnear's statement of principle.

The underlying fundamental principle remained; to consider where the case could be tried "suitably for the interests all the parties and the ends of justice". For example, an English court would not, normally, hesitate to stay proceedings merely because a party would be deprived of higher damages here.

But the underlying principle required that regard must be had to the interests of all the parties and the ends of justice; and those considerations could lead to a different conclusion in other cases.

For example, it would not normally be wrong to allow a plaintiff to keep the benefit of security obtained by commencing proceedings here, while at the same time granting a stay of proceedings in this country to enable the action to proceed in the appropriate forum.

Again, in relation to time bars, practical justice demanded that, if the court considered that the plaintiff had acted reasonably in commencing proceedings in this country, and that, although it appeared that (putting on one side the time bar point) the appropriate forum was elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not be just to deprive the plaintiff of the benefit of having started proceedings here."

27. I must therefore consider the present proceedings in the light of those authoritative statements from the House of Lords.

28. I will attempt to summarise the evidence of Miss Twiggy Liu in her first affirmation filed on 5th March 1986.

29. In a supplementary affirmation XVIII of 23rd April 1986 she produces a copy of the 1st plaintiff's claim in an action in Turin.

30. There is in reply an affidavit from Mr James Irvine XXI of 24th April 1986 in which he sets out the history of these proceedings in Hong Kong and attempts to explain the delays.

31. He points out in para 19 that the action in Italy was commenced in Florence on 10th May 1985 by Dodo Mark 1 S.R.L. who is not a party of these proceedings. He asserts that neither the 2nd plaintiff nor any of the defendants are parties to that Italian action (of course Dodo Mark 1 S.R.L. has since become the 12th defendants in the present action).

32. It is common ground that the Italian Court would not be bound in any way by a decision with regard to the validity of the Licence Agreement in Hong Kong and no issues akin to issue estoppel or res judicata would arise in Italian proceeding were there a decision in Hong Kong first.

33. A forth affirmation was filed by Miss Twiggy Liu (XXVI) on 10th June 1986 giving evidence as to the similarity of a cause of action in Italy to passing off.

34. Much of the affirmation contains submissions and takes issue with Mr. Irvine, but it comes back to the same contention that a decision of the question as to the validity of the Licencing Agreement will determine the issues between the parties and that the appropriate forum for the determination of that issue is Italy.

35. There is also an affidavit from another expert to the effect that a cause of action of "passing off" is available in Italian Law. As also "Infringement of a Trade Mark".

36. It is conceded by Mr. Ching for the defendant that there are obviously differences between Italian Law on these causes of action and Hong Kong Law but he argues they are substantially the same.

37. Mr. Ching has argued that there are already, as shown in the evidence, proceedings afoot in both Florence and Turin and that this is not a case where there is no lis alibi pendens. It is common ground, he says, that whichever tribunal decides the matter, the validity of the Licence Agreement will be governed by Italian Law. Although there is legal evidence to the effect that there is no such cause of action as passing off in Italy, Mr Ching argues that there is evidence from a specialist in the field that there is a cause of action in Italy identical or almost identical to the cause of action of passing off in Hong Kong. Furthermore, he claims that there does not appear to be all that difference between the cause of action for infringement of a trademark in Italy and in Hong Kong. Mr Ching argues that the court could not decide on the question of infringement of a trademark or of passing off until the question of the validity of the Licence Agreement has been determined. He suggests that once that has been determined, there is nothing left. To bring witnesses here would obviously cause enormous difficulties not only to the parties but also to the witnesses, the days in court would be longer because of interpretation, witnesses would have to be paid travelling expenses and would have to be maintained whilst in Hong Kong; they would all be taken away from their jobs and families all that time. On the other hand, he argues that except for the purchase and sales in Hong Kong, everything else happened in Italy. Therefore, Italy is the natural or more appropriate forum. Apart from the 1st to the 11th defendants and the 2nd plaintiff, all other parties are Italian, in Italy, speaking Italian, he says. He argues that it is for the plaintiff to show that they are going to lose a real juridical advantage, it is for them to show that there is any difference in Italian Law to the Hong Kong Law which gives them a juridical advantage insofar as the questions of 'estoppel' 'Group trademarks' 'express and implied consent' are concerned and he argues that the plaintiffs have put nothing before this court on the law on these subjects. He concludes by arguing that once the validity of the Licence is determined there is nothing left. It is true that the 1st to the 11th defendants are not in Italy but they are willing he says to undertake that they will be bound by the decision in Italy so that it is a non point to say that they are not parties in Italy. Insofar as the 2nd plaintiff is concerned, he argues that it is also not an Italian party but it is a subsidiary of the 1st plaintiff and the defendants say clearly that the 2nd plaintiff has no rights of action based on trademarks and on the circumstances of this case, has no independent right to sue for passing off. In any event, he says if the licence was found valid, there has been no passing off. Therefore, there will be no loose ends to be tied up in the Hong Kong case. The validity of the licence has been adjudicated upon in Italy. He argues that even without a lis alibi pendens, these proceedings should be stayed and pursued in Italy. He argues that not only is there one lis alibi pendens in Italy but in fact two - the first being in Florence between Dodo against Guccio Gucci and Guccio Parfums and the second being in Turin between Guccio Gucci and others where Dodo intervened to be made a party. However, on the strength of a dictum in The Abidin Daver⁽³⁾ , he argues that once the defendants have shown a natural forum which is a fortiori, the more appropriate forum in which there is a lis alibi pendens, it is for the plaintiffs to show that they had been deprived of juridical advantage.

38. The only thing they had been able to put forward, he says, is the question of delay in the Italian courts and he argues that the evidence on this subject is very vague. He says there is no substantial difference between what the position would be in Italy and Hong Kong. He argues that his clients are willing to undertake to keep proper accounts as far as Gucci Plus goods are concerned and report to the plaintiffs at such periods as the court might think just. He further argues that the plaintiffs had been dilatory in pursuing these proceedings and no explanations have been put forward for the sudden urgency. Even if the court were to feel that the length of time that may be taken in Italy would cause the plaintiffs a real disadvantage, the court should still weigh the advantages and disadvantages on both sides and see where the balance should be struck. In this exercise, he says a very important weight and counterweight in the balancing act is a possibility of conflicting decisions in two jurisdictions. Mr Ching argues that the scales totally weigh in his favour.

39. Mr Clayton who appears for the plaintiffs argues that these applications should fail in limine. He argues that they are actions in respect of Hong Kong torts of passing off and infringement in Hong Kong by Hong Kong companies or defendants that do business in or with Hong Kong, to preserve Hong Kong rights and that one of the plaintiffs is a Hong Kong company and that the other is an Italian company asserting its rights in Hong Kong. He points out that Dodo Mark I was joined as a defendant at its own insistence and that the plaintiffs seek no relief against it. So far as Gucci Parfums is mentioned as a defendant to the counterclaim, he points out that it has never been served and no application has yet been made to serve it outside the jurisdiction. So what we have here, he says, is an action brought by the plaintiffs in respect of Hong Kong torts committed in Hong Kong by Hong Kong defendants. It is common ground that the law governing such actions is the lex loci delicti which is of course Hong Kong. The only matter which falls to be determined under Italian Law is the question of the validity of the Licence Agreement, he says. However, he points out that all the cases show that before a stay will be granted, the cause of action has to be justiciable in both jurisdictions and the relief has to be obtainable in both jurisdictions. In other words, the parties must be able to obtain complete relief in the other jurisdiction if it seeks to stay the proceedings in our jurisdiction. Since the cause of action in the present case is passing off in relation to Hong Kong, infringement of trademark in relation to Hong Kong, damages, relief and injunctions all in Hong Kong, none of the relief could be obtained in Italy, he says. The only issue where Italian Law is pleaded by the defendants is on the question of the validity of the licencing agreement. On the pleadings a determination of that issue would not determine the causes of action in Hong Kong. Therefore, he says, the Hong Kong causes of action can only be decided in Hong Kong. There is clear authority and indeed it is not disputed that the doctrine of estoppel will be decided by the lex fori which he argues will be Hong Kong if the case is tried here. The question of the Group mark, the Group reputation, the consent expressed or implied under S27(3) of the Trademarks Ordinance are all matters of Hong Kong Law. Not only could this action not be brought in Italy, but the proceedings which have been referred to in Florence and Turin are between different parties, and the plaintiffs are not prepared to give an undertaking in respect of Italian proceedings.

40. He therefore argues that the court should reject this application without even having to get to the stage where it exercises a discretion because the defendants have failed to show that there is some other available forum having competent jurisdiction which was the appropriate forum for the trial i.e. in which the case could be tried more suitably for the interests of all the parties and the ends of justice. He bases his preliminary contention under 3 headings. The first is that the action is trademark infringement and passing off in Hong Kong, a Hong Kong tort committed by Hong Kong companies and whether there has been such infringement and passing off cannot be determined in Italy and none of the relief sought by the plaintiffs could be granted in Italy, therefore there should be no stay. It must be shown that full complete relief could be obtainable in the other jurisdiction and he points to evidence in the affidavit of Mr Irvine which says that the parties could not be sued on the matters before this court in Italy and that none of the relief obtainable in this action is obtainable in Italy. He points out that there is no evidence to contradict this evidence of Mr Irvine. Furthermore, he points out that the counterclaim is in respect of acts to be done in Hong Kong for relief in respect of acts committed in Hong Kong determinable under Hong Kong Law,

41. Furthermore, he argues that it must be shown that the cause of action must be the same and since the plaintiffs are litigating in Hong Kong in respect of Hong Kong torts in respect of acts committed in Hong Kong by Hong Kong companies and businesses and seek relief in Hong Kong that cannot be obtained in Italy, this action cannot be brought against the parties in Italy.

42. The second heading under which he maintains that the defendants' application must fail in limine is that the parties have to be the same in both jurisdiction. In this case, of course, they are not.

43. His third ground is that if the matter is to be stayed to enable proceedings to continue or commence in a foreign jurisdiction to determine a particular issue, then there must be issue estoppel on those questions of Italian Law. The plaintiffs say that there would be no issue estoppel here.

44. Having considered the submissions of counsel, the pleadings and the evidence in the affidavits and affirmations, I am not satisfied that the defendants have shown that Italy is a more appropriate forum for the determination of this action i. e that the case could be more suitably tried in Italy having regard to the interests of the parties and the ends of Justice.

45. I agree with Mr Clayton that since the causes of action are passing off in Hong Kong and infringement of trade marks in Hong Kong and the relief sought is only obtainable in Hong Kong, Hong Kong is the appropriate forum. It is common ground that the question of the validity of the Licencing Agreement is determinable under Italian Law. However on the pleadings the determination of that issue will not necessarily determine the action, because it is not admitted by the plaintiffs that the goods sold by all the defendants were manufactured by Dodo Mark 1 S.R.L. Therefore the proposed undertaking of the defendants be bound by an Italian decision would not necessarily settle the matter finally. Furthermore the plaintiffs are not prepared to give such an undertaking and they are defendants to the counterclaim. The actions now pending in Italy in Florence and Turin are not between precisely the same parties as in the present action nor could all the parties to this action be joined in either of the Italian proceedings.

46. The defendants have therefore not satisfied me that there is some other available forum having competent jurisdiction which is the appropriate forum for a trial which is more suitable for the interests of all the parties and the ends of justice in this case. I would like to say however that even if the defendants had discharged that burden, I would not be satisfied that it would be just to stay the present proceedings because of the extra length of time it would take for a final decision to be arrived at in Italy. This case is now well forward and it will not take long for the matter to come to trial. There is no just reason why the plaintiffs should be made to wait for a final decision in the Italian court. There is the evidence of Mr Irvine in para. 20 of his affidavit where he swears that he has been informed by Dr Massimo Introvigne and verily believes that a decision at first instance is expected at the end of 1987 and that he has also been informed by Dr Introvigne and verily believes that even following such decision, it would be open to the parties thereto to appeal and such appeal would take two to three years to be heard and that a further appeal lies therefrom to the court of Cassation which would take a further two to three years from the decision in the first appeal. In this situation, the plaintiffs would be looking at something like 7 years before the matter would be finally settled in the Italian courts. Furthermore in view of the fact that the plaintiffs do not admit that the 'Gucci Plus' goods were manufactured by Dodo Mark 1 S.R.L., it is important to them that discovery takes place in Hong Kong.

47. Even if I were to take the view that the defendants had discharged the burden on them, I would not be prepared in the exercise of my discretion to stay these proceedings.

48. The application of the defendants is therefore dismissed with costs.

(1)   [1974] A. C. 436
(2)  [1978] A.C. 795
(3)  [1984] 1 A.C. 398
(4)  [1982] 2 H.K.L.R. 513
(5)  [1986] H.K.L.R. 487
(6)  The Times, L.R. 24th November 1986

Representation:

Mr. Charles Ching, Q.C. and Peter Garland (Robert W.H. Wang & Co.) for Applicants/Defendants

Mr. Peter Clayton (Johnson, Stokes & Master) for Respondents/Plaintiffs