Compania Sud Americana De Vapores S.A. v. Hin-pro International Logistics Ltd

HCMP 1449/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO1449 OF 2014

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D E C I S I O N

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1.This is the application of the defendant and Soar to strike out the originating summons on the ground it is an abuse of court process and/or otherwise unarguable in view of 2 Court of Appeal’s decisions (“the CA decisions”).

Background

2.The originating summons seeks only one head of relief – Mareva injunction in aid of the plaintiff’s English proceedings, wherein the plaintiff seeks to enforce an alleged exclusive jurisdiction clause by anti-suit injunction and ancillary orders.

3.The plaintiff obtained interlocutory injunction and receivership orders but they were discharged by DHCJ Wilson Chan. 

4.The first CA decision dated 18 December 2014 refused to grant a stay to the plaintiff of the order of discharge. 

5.The second CA decision dated 11 March 2015 dismissed the appeal against the order of discharge primarily on the ground of judicial conflict. It was held, amongst others, that an English anti-suit injunction in respect of legal proceedings in another jurisdiction cannot be enforced in Hong Kong.  The plaintiff sought a Mareva injunction (and receivership order based on it) to protect its claim for reflective damages based upon the exclusive jurisdiction clause in the bills of lading in favour of English court.  Damages were sought to reverse the effect of whatever judgments which might be issued by the courts in the PRC instead of an investigation of the underlying claims on the bills of lading (which the English proceedings were not concerned with).  Given the rationale behind the principle of international comity, there was no justification for the court to proceed on the basis that, as between PRC law and English law, whichever regime yielding a result closer to one prescribed by the application of Hong Kong law should prevail.  (§§49-51, 57, 61 of the second CA decision)

6.Effectively, the defendant and Soar are now suggesting that since the originating summons asks for the same relief as the interlocutory injunction/receivership orders, upon dismissal of the interlocutory orders, the originating summons should also be dismissed. 

7.The plaintiff opposes the application. It brings to this court's attention the fact that there is a pending application for leave to appeal against the second CA decision (“the leave application”).  As directed by the Court of Appeal, the last day for filing written submission for the leave application shall expire today.  The plaintiff suggested adjourning the present summons until after disposal of the leave application, otherwise this court will be pre-empting the Court of Appeal’s determination in the leave application.

8.Mr Barlow SC, counsel for the defendant and Soar, objects.  He submits that this court has no power to grant what was in effect a stay of proceedings in favour of the plaintiff when the stay had been refused.

Decision

9.I remind myself that this is not an application to dispose of the originating summons substantively or the plaintiff’s application for a stay. It is a summons for striking it out.  It is a serious application.

10.Although the Court of Appeal set aside the interlocutory injunction and receivership order, it did not deal with the merits of the originating summons. 

11.The defendant suggested that this court should make the strike-out order now, sealing the order only after determination of the plaintiff’s leave application.  This is unorthodox.  An order takes effect on the date of its pronouncement unless there is good reason to postpone its sealing.  No good reason has been shown.

12.Nor has it been shown what urgency there is in making an order for striking out now, if that be appropriate.  It will cause unnecessary procedural complications, as it may bar the leave application from being further considered in the next few days.  If an appeal goes to the Court of Final Appeal, there may be consequential reversal of decisions. 

13.I see no reason why the plaintiff should be shut out from that opportunity of defending its claim when facing the potentially serious consequence of a strike-out and dismissal of the action.  In my view, there is no prejudice to anyone if this summons were to wait till after disposal of the leave application of the Court of Appeal in the near future.

14.I therefore adjourn the summons for argument and direct the filing of affidavits in opposition within 7 days after the CA shall hand down its reasons for the leave application.  The defendant will have 7 days thereafter to respond by affidavit.  Costs are reserved.

15.I thank counsel for their assistance.

Mr John Scott SC leading Ms Frances Lok, instructed by Stephenson Harwood, for the plaintiff

Mr Barrie Barlow SC leading Mr George Chu, instructed by Damien Shea & Co., for the defendant and third party