EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS

Leave to serve the Re‑Amended Writ outside Hong Kong was properly given as to Silver Point and Oaktree but set aside as to the three external New Cotai directors (Moross, Baker, Vora) because there was no good arguable case: personal claims against directors inducing their own company to breach were untenable absent pleaded bad faith; multiple derivative claims were not sustainable because neither Macao nor BVI law provided a clear basis for multiple derivative actions and EAST had not established exceptions; many derivative claims asserted amounted to impermissible reflective loss and were struck out; material non‑disclosure in the ex parte application was also material and would have...

Citation
EAST ASIA SATELLITE TELEVISION (HOLDINGS) LTD v. NEW COTAI, LLC AND OTHERS
Parties
Plaintiff / Petitioner: EAST ASIA SATELLITE TELEVISION (HOLDINGS) LIMITED; 1st Defendant / 1st Respondent: NEW COTAI, LLC; 2nd Defendant / 2nd Respondent: CYBER ONE AGENTS LIMITED; 3rd Defendant: CYBER NEIGHBOUR LIMITED; 4th Defendant: EAST ASIA-TELEVIS O POR SAT LITE LIMITADA; 5th Defendant / 3rd Respondent: VITALY UMANSKY; 6th Defendant: GARY EVAN MOROSS; 7th Defendant: DAVID FRIEDMAN; 8th Defendant: SKARDON FRANCIS BAKER; 9th Defendant: ROBERT BARRY GOLDBERG; 10th Defendant: PARAG MAHESH VORA; 11th Defendant: SILVER POINT CAPITAL, L.P.; 12th Defendant: OAKTREE CAPITAL MANAGEMENT, L.P.; Related Party (shareholder of New Cotai): NEW COTAI HOLDINGS LLC
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
16 July 2010
Case Number
HCMP2218/2009
Procedural Posture
Civil Action (contract, Tort, Derivative Claims) and Section 168 a Companies Ordinance Petition / Interlocutory Judgment on Applications to Set Aside Service Out, Strike Out Parts of Pleadings and to Amend Writ; Costs and Directions Given
Outcome
Interlocutory orders: service out set aside as to 6th, 8th and 10th Defendants; service out upheld as to 11th and 12th Defendants; numerous derivative and reflective loss claims struck out; certain prayers in s.168A petition struck or narrowed; leave to file Re‑Re‑Amended Writ refused; costs Nisi orders and liberty...
Legal Topics
Derivative Action, Multiple Derivative Action, Reflective Loss, Service Out of Jurisdiction (order 11), Setting Aside Service (order 12), Strike Out, Section 168 a Companies Ordinance, Leave to Amend Pleadings, Dishonest Assistance, Conspiracy, Fiduciary Duty
Source Language
EN
Company Law Civil Procedure Private International Law Contract Law Equity and Trusts/fiduciary Law Derivative Action Multiple Derivative Action Reflective Loss +8 more

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Parties

EAST ASIA SATELLITE TELEVISION (HOLDINGS) LIMITED

Plaintiff / Petitioner

NEW COTAI, LLC

1st Defendant / 1st Respondent

CYBER ONE AGENTS LIMITED

2nd Defendant / 2nd Respondent

CYBER NEIGHBOUR LIMITED

3rd Defendant

EAST ASIA-TELEVIS O POR SAT LITE LIMITADA

4th Defendant

VITALY UMANSKY

5th Defendant / 3rd Respondent

GARY EVAN MOROSS

6th Defendant

DAVID FRIEDMAN

7th Defendant

SKARDON FRANCIS BAKER

8th Defendant

ROBERT BARRY GOLDBERG

9th Defendant

PARAG MAHESH VORA

10th Defendant

SILVER POINT CAPITAL, L.P.

11th Defendant

OAKTREE CAPITAL MANAGEMENT, L.P.

12th Defendant

NEW COTAI HOLDINGS LLC

Related Party (shareholder of New Cotai)

Procedural Posture

Civil Action (contract, Tort, Derivative Claims) and Section 168 a Companies Ordinance Petition / Interlocutory Judgment on Applications to Set Aside Service Out, Strike Out Parts of Pleadings and to Amend Writ; Costs and Directions Given

Legal Issues

  1. 1 Whether leave to serve the Re‑Amended Writ outside jurisdiction was valid and should be set aside
  2. 2 Whether claims advanced amount to impermissible reflective loss
  3. 3 Whether multiple derivative actions are available under Macao and BVI law

Ratio Decidendi

Leave to serve the Re‑Amended Writ outside Hong Kong was properly given as to Silver Point and Oaktree but set aside as to the three external New Cotai directors (Moross, Baker, Vora) because there was no good arguable case: personal claims against directors inducing their own company to breach were untenable absent pleaded bad faith; multiple derivative claims were not sustainable because neither Macao nor BVI law provided a clear basis for multiple derivative actions and EAST had not established exceptions; many derivative claims asserted amounted to impermissible reflective loss and were struck out; material non‑disclosure in the ex parte application was also material and would have...

Court Disposition

Interlocutory orders: service out set aside as to 6th, 8th and 10th Defendants; service out upheld as to 11th and 12th Defendants; numerous derivative and reflective loss claims struck out; certain prayers in s.168A petition struck or narrowed; leave to file Re‑Re‑Amended Writ refused; costs Nisi orders and liberty...

Orders

  • Set aside leave for service outside jurisdiction and discharge service of Re‑Amended Writ on 6th, 8th and 10th Defendants (Moross, Baker, Vora)
  • Refuse to set aside service on 11th and 12th Defendants (Silver Point Capital L.P. and Oaktree Capital Management L.P.)