Read the full judgment text of HCCT 12/2007 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 2 October 2007 before Deputy High Court Judge L. Chan.
In this construction and arbitration proceeding, the plaintiffs and defendants disputed the payment currency and completion of a share transfer in a Hong Kong company owning a Mainland enterprise. The defendants obtained a Mainland freezing order using the shares as security, which the plaintiffs sought to restrain by ex parte injunction in Hong Kong. The court found material non-disclosure by plaintiffs regarding potential tax liability which justified the defendants’ refusal to transfer shares and initiation of Mainland proceedings. The ex parte injunction was improperly granted without disclosure of mandatory and anti-suit injunction principles or urgency. The injunction was discharged except for an order securing release of shares from use as security. The tax liability and ownership issues were serious questions to be tried, likely for arbitration resolution. Costs were awarded to defendants. The case illustrates principles governing ex parte disclosure, anti-suit injunctions, and interplay between Hong Kong and Mainland legal actions in share transactions.
Legal issues: Material non-disclosure affecting ex parte injunction · Nature and justification of the ex parte injunction · Whether plaintiffs’ potential tax liability was a live issue at the time of the ex parte application · Disclosure of relationship between plaintiffs and Hebei Sunco · Disclosure of Hebei Sunco’s defense in Mainland Proceedings · Propriety of interlocutory injunction against 3rd defendant without claim
Outcome: Ex parte injunction discharged except order requiring release of Huigu shares which was re-granted.
Cited by 1 case · Cites 5 cases