CHINA MEDICAL TECHNOLOGIES INC (In Liquidation) v. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP (a firm) AND ANOTHER

CHINA MEDICAL TECHNOLOGIES INC (In Liquidation) v. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP (a firm) AND ANOTHER

On the interlocutory materials the plaintiffs established a good arguable case that PW LLP carried on business in Hong Kong (so Order 81 applied), that the alleged negligent misstatements/advice were in substance committed and relied upon in Hong Kong and governed by Hong Kong law, and that defendants failed to show New York was clearly or distinctly the more appropriate forum; accordingly the defendants' applications to set aside service and for a stay were dismissed and the plaintiffs' curative applications were unnecessary (though would have been granted if required).

Citation
[2019] HKCFI 2631
Parties
Plaintiff (in Liquidation): China Medical Technologies Inc; Plaintiff: CMED Technologies Ltd; 1st Defendant: Paul, Weiss, Rifkind, Wharton & Garrison LLP; 2nd Defendant: Paul, Weiss, Rifkind, Wharton & Garrison
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 October 2019
Case Number
HCA577/2015
Procedural Posture
Civil Tort Claims and Interlocutory Applications (service, Jurisdiction and Forum) / Interlocutory Hearing and Decision on Jurisdiction, Stay and Curative Applications
Outcome
Defendants' summonses to set aside service and to stay the actions dismissed; plaintiffs' curative applications unnecessary (would have been granted if needed); no order made on defendants' application to set aside the 17 March 2016 extension order; costs order nisi in favour of plaintiffs with specified carve-out.
Legal Topics
Negligent Misstatement, Service Out of Jurisdiction, Forum Non Conveniens, Carrying on Business in Jurisdiction, Partnership Service (order 81), Choice of Law, In Pari Delicto, Leave to Serve Out, Curative Orders, Limitation
Source Language
EN
Tort Conflict of Laws / Private International Law Civil Procedure Insolvency Professional Negligence Negligent Misstatement Service Out of Jurisdiction Forum Non Conveniens +7 more

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Parties

China Medical Technologies Inc

Plaintiff (in Liquidation)

CMED Technologies Ltd

Plaintiff

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1st Defendant

Paul, Weiss, Rifkind, Wharton & Garrison

2nd Defendant

Procedural Posture

Civil Tort Claims and Interlocutory Applications (service, Jurisdiction and Forum) / Interlocutory Hearing and Decision on Jurisdiction, Stay and Curative Applications

Legal Issues

  1. 1 Whether PW LLP was carrying on business in Hong Kong so it could be sued/served as a firm under RHC Order 81
  2. 2 Whether plaintiffs validly limited their claims to tort and the consequences of that election
  3. 3 What law governs the tort claims (place of tort)

Ratio Decidendi

On the interlocutory materials the plaintiffs established a good arguable case that PW LLP carried on business in Hong Kong (so Order 81 applied), that the alleged negligent misstatements/advice were in substance committed and relied upon in Hong Kong and governed by Hong Kong law, and that defendants failed to show New York was clearly or distinctly the more appropriate forum; accordingly the defendants' applications to set aside service and for a stay were dismissed and the plaintiffs' curative applications were unnecessary (though would have been granted if required).

Court Disposition

Defendants' summonses to set aside service and to stay the actions dismissed; plaintiffs' curative applications unnecessary (would have been granted if needed); no order made on defendants' application to set aside the 17 March 2016 extension order; costs order nisi in favour of plaintiffs with specified carve-out.

Orders

  • PW LLP’s application to set aside service of the writs on it dismissed
  • Defendants’ application for a stay on forum non conveniens grounds dismissed