BAOSTEEL ENGINEERING & TECHNOLOGY GROUP CO LTD v. CHINA ZENITH CHEMICAL GROUP LTD

BAOSTEEL ENGINEERING & TECHNOLOGY GROUP CO LTD v. CHINA ZENITH CHEMICAL GROUP LTD

A temporary stay of enforcement was granted only on the condition that CZ provide full security in Hong Kong (payment into court of RMB 19,818,046 or an acceptable bank guarantee within 14 days); ongoing and unliquidated Mainland proceedings, and a third party's alleged cross‑claim, do not by themselves justify delaying enforcement where the judgment creditor would be unfairly prejudiced and adequate security can be provided.

Citation
[2018] HKCFI 1678
Parties
Applicant: Baosteel Engineering & Technology Group Company Limited; 1st Respondent: Heihe Longjiang Chemical Company Limited; 2nd Respondent: China Zenith Chemical Group Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
18 July 2018
Case Number
HCCT7/2018
Procedural Posture
Enforcement of Arbitral Award (application Under Arbitration Ordinance Cap 609) / Application for Stay of Execution Following Leave to Enforce Arbitral Award and Prior Enforcement Order
Outcome
Temporary stay of execution granted for 6 months from 11 July 2018, conditional on provision of security; costs awarded to Baosteel
Legal Topics
Stay of Execution, Security for Stay, Set Off, Recognition and Enforcement, Jurisdiction Challenge
Source Language
EN
Arbitration Civil Procedure Enforcement of Foreign Awards Cross Border Litigation Contract Stay of Execution Security for Stay Set Off +2 more

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Parties

Baosteel Engineering & Technology Group Company Limited

Applicant

Heihe Longjiang Chemical Company Limited

1st Respondent

China Zenith Chemical Group Limited

2nd Respondent

Procedural Posture

Enforcement of Arbitral Award (application Under Arbitration Ordinance Cap 609) / Application for Stay of Execution Following Leave to Enforce Arbitral Award and Prior Enforcement Order

Legal Issues

  1. 1 Whether a stay of enforcement of an arbitral-award enforcement order should be granted pending separate Mainland court proceedings
  2. 2 Whether an alleged third‑party cross‑claim and potential Mainland judgment can operate as set‑off to defeat or suspend enforcement of the Award in Hong Kong
  3. 3 What security is required to justify a stay to prevent prejudice to the judgment creditor

Ratio Decidendi

A temporary stay of enforcement was granted only on the condition that CZ provide full security in Hong Kong (payment into court of RMB 19,818,046 or an acceptable bank guarantee within 14 days); ongoing and unliquidated Mainland proceedings, and a third party's alleged cross‑claim, do not by themselves justify delaying enforcement where the judgment creditor would be unfairly prejudiced and adequate security can be provided.

Court Disposition

Temporary stay of execution granted for 6 months from 11 July 2018, conditional on provision of security; costs awarded to Baosteel

Orders

  • Temporary stay of enforcement granted for 6 months from 11 July 2018 conditional on payment into court of RMB 19,818,046 within 14 days or provision of a bank guarantee acceptable to Baosteel for that sum
  • If security is not provided within 14 days, the application for stay of execution is dismissed (stay discharged)