Re: COMPANIA SUD AMERICANA DE VAPORES S.A. v HIN-PRO INTERNATIONAL LOGISTICS LIMITED (2016) 19 HKCFAR 586
Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Phillips of Worth Matravers NPJ
In a recent decision in the Hong Kong Court of Final Appeal, COMPANIA SUD AMERICANA DE VAPORES S.A. v HIN-PRO INTERNATIONAL LOGISTICS LIMITED (2016) 19 HKCFAR 586, the highest court in Hong Kong interpreted s21M and s21N of High Court Ordinance (cap. 4, laws of Hong Kong) which is the equivalent to s25 of Civil Jurisdiction and Judgments Act 1982 in United Kingdom which empowers the Court to grant pre-emptive injunction and appoint receiver in aid of foreign proceedings (by legislation reversed the Siskina principle [1979] AC 210 adopted in the House of Lords), whereby the cause of action or substantive legal issue do not vest in Hong Kong. In short, parties now no longer needs to wait for a final foreign judgment which in only enforceable under the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap. 319, laws of Hong Kong). The Court is equipped with the statutory power to grant Mareva Injunction in any foreign proceedings which have not yet reached judgment stage.
The Applicant in this case is a shipping company based in Chile but has a listing status in UK. The Respondent is a Hong Kong company with its main operation and shipping activities to various parts of South America. The main dispute concerns the complaints of loss of cargo by the Respondent. The Respondent sues the Applicant in several jurisdictions in China. The Applicant relies on by the exclusive jurisdiction clause and alleged that UK is the chosen forum according to the contract. Thereby the Applicant claims the Respondent in breach of this clause and accordingly sought an anti-suit injunction and stay of foreign proceedings in UK.
In adopting the 3 stage test, the CFA opined that under limb 1 in so far as "good arguable case" is concerned, the Court should rely on the relevant foreign court decision (and without challenging the applicable foreign law) on plaintiff's underlying merits of the substantive law issue. In simple term, plaintiff only needs to demonstrate to the Hong Kong Court it has a good arguable case in any foreign court under the relevant foreign law. Secondly, the Hong Kong Court then should move on to consider the likelihood of dissipation of assets in Hong Kong under the ordinary domestic Mareva injunction principle. Finally, the Court should consider whether it is "unjust or inconvenient" to grant a Mareva Injunction under s21M, whereby the wording of s25 in UK is "inexpedient".
One peculiar feature of this case was that parallel substantive proceedings concerning an exclusive jurisdiction clause and forum non convenien took place in UK and China prior to parties commencing s21M action in Hong Kong, leaving the assisting court (Hong Kong) in an invidious position in view of the competing decisions in those jurisdictions. The Court of Final Appeal did not expressly address that issue and it remains to be untouched.
One point is clear that the 2009 amendment in Hong Kong whereby the legislative intent under s21M and s21N HCO to expand the scope of the role of Hong Kong Court in granting judicial assistance in interlocutory stage was confirmed.
It remains to be seen if the Hong Kong Court would refuse judicial assistance if a party relies on a foreign court interlocutory decision (which is short of the respect of the UK Court) pray in aid of s21M and s21N in Hong Kong.
Mr George Chu of our chambers appeared at all levels of Court in these proceedings including in the Court of Final Appeal.
The full case can be seen here: Here
30th June 2017