COMPANY A AND OTHERS v. COMPANY D AND OTHERS

COMPANY A AND OTHERS v. COMPANY D AND OTHERS

Although s45 can in appropriate cases support interim measures ancillary to arbitration and may extend to third parties, the plaintiffs failed to demonstrate clear and compelling evidence of a real risk of dissipation or that less intrusive remedies were inadequate; the contested transfers predated the tribunal extension, the assets are held by separate legal entities, credible restraining orders already exist (including the 3rd Defendant injunction and tribunal orders) and key expert evidence was inadmissible; accordingly the court refused to appoint receivers.

Citation
[2018] HKCFI 2240
Parties
1st Plaintiff: COMPANY A; 2nd Plaintiff: COMPANY B; 3rd Plaintiff: COMPANY C; 1st Defendant: COMPANY D; 2nd Defendant: COMPANY E; 3rd Defendant: COMPANY F
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
3 October 2018
Case Number
HCCT31/2018
Procedural Posture
Construction and Arbitration Proceedings; Application for Interim Receivership in Aid of Arbitration / Inter Partes Hearing on Application for Appointment of Receivers (application Dismissed)
Outcome
Application for appointment of receivers refused
Legal Topics
Section 45 Arbitration Ordinance Jurisdiction, Chabra Third‑party Mareva Principles, Mareva Freezing Injunctions, Interim Relief in Aid of Arbitration, Enforcement of Arbitral Awards, Service Out of Jurisdiction
Source Language
EN
Arbitration Law Civil Procedure Injunctions Receivership Cross Border Enforcement Section 45 Arbitration Ordinance Jurisdiction Chabra Third‑party Mareva Principles Mareva Freezing Injunctions +3 more

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Parties

COMPANY A

1st Plaintiff

COMPANY B

2nd Plaintiff

COMPANY C

3rd Plaintiff

COMPANY D

1st Defendant

COMPANY E

2nd Defendant

COMPANY F

3rd Defendant

Procedural Posture

Construction and Arbitration Proceedings; Application for Interim Receivership in Aid of Arbitration / Inter Partes Hearing on Application for Appointment of Receivers (application Dismissed)

Legal Issues

  1. 1 Whether the Court has jurisdiction under s45 of the Arbitration Ordinance to grant interim measures (receivership) against a non‑party to the arbitration agreement
  2. 2 Whether plaintiffs established clear evidence of risk of dissipation of the Thai Co shares to justify the draconian remedy of receivership
  3. 3 Whether the tribunal’s prior emergency orders covered R Co’s sale of Thai Co shares and whether those orders were breached

Ratio Decidendi

Although s45 can in appropriate cases support interim measures ancillary to arbitration and may extend to third parties, the plaintiffs failed to demonstrate clear and compelling evidence of a real risk of dissipation or that less intrusive remedies were inadequate; the contested transfers predated the tribunal extension, the assets are held by separate legal entities, credible restraining orders already exist (including the 3rd Defendant injunction and tribunal orders) and key expert evidence was inadmissible; accordingly the court refused to appoint receivers.

Court Disposition

Application for appointment of receivers refused

Orders

  • Application dismissed
  • Costs to be paid by the Plaintiffs to the Defendants and to the 3rd Defendant with certificate for two counsel