LUCKY SUN DEVELOPMENT LTD AND ANOTHER v. GAINSMATE INTERNATIONAL LTD AND OTHERS

LUCKY SUN DEVELOPMENT LTD AND ANOTHER v. GAINSMATE INTERNATIONAL LTD AND OTHERS

The court discharged the ex parte injunction because the plaintiffs materially failed to disclose a live, central issue (potential Mainland tax liability and their relationship with Hebei Sunco) and failed to justify ex parte mandatory and anti-suit relief; however, on balance the court re-granted a limited order requiring the 1st and 2nd defendants to secure release of the Huigu shares as security because there is a serious question to be tried, potential inadequacy of damages, and the defendants retained sufficient other security so that the limited regrant was proportionate and just pending arbitration.

Citation
LUCKY SUN DEVELOPMENT LTD AND ANOTHER v. GAINSMATE INTERNATIONAL LTD AND OTHERS
Parties
1st Plaintiff: Lucky Sun Development Limited; 2nd Plaintiff: Perfect Vision Management Limited; 1st Defendant: Gainsmate International Limited; 2nd Defendant: Full Mart Group Holdings Limited; 3rd Defendant: Pep Fund Asia-Pacific District Management Office (Hong Kong) Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
2 October 2007
Case Number
HCCT12/2007
Procedural Posture
Construction and Arbitration Proceedings (share Transfer Dispute; Freezing Order; Arbitration) / Application by Defendants to Discharge Ex Parte Injunction; Regrant Application by Plaintiffs (interim Injunction Issues)
Outcome
Ex parte injunction discharged in full; limited regrant ordering 1st and 2nd defendants to secure release of Huigu shares used as security; costs nisi in favour of defendants.
Legal Topics
Ex Parte Injunction, Anti Suit Injunction, Freezing Order (security), Material Non Disclosure, Tax Indemnity Clause, Share Transfer Disputes, Mandatory Injunction, Comity and Forum
Source Language
EN
Arbitration Civil Procedure Injunctions Private International Law Tax Law Company Law Commercial Law Ex Parte Injunction +7 more

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Parties

Lucky Sun Development Limited

1st Plaintiff

Perfect Vision Management Limited

2nd Plaintiff

Gainsmate International Limited

1st Defendant

Full Mart Group Holdings Limited

2nd Defendant

Pep Fund Asia-Pacific District Management Office (Hong Kong) Limited

3rd Defendant

Procedural Posture

Construction and Arbitration Proceedings (share Transfer Dispute; Freezing Order; Arbitration) / Application by Defendants to Discharge Ex Parte Injunction; Regrant Application by Plaintiffs (interim Injunction Issues)

Legal Issues

  1. 1 Whether plaintiffs committed material non-disclosure in ex parte application (failure to disclose potential Mainland tax liability and relationship with Hebei Sunco)
  2. 2 Whether ex parte relief was justified given lack of urgency and risk of nullification
  3. 3 Whether mandatory and anti-suit injunction principles were correctly applied

Ratio Decidendi

The court discharged the ex parte injunction because the plaintiffs materially failed to disclose a live, central issue (potential Mainland tax liability and their relationship with Hebei Sunco) and failed to justify ex parte mandatory and anti-suit relief; however, on balance the court re-granted a limited order requiring the 1st and 2nd defendants to secure release of the Huigu shares as security because there is a serious question to be tried, potential inadequacy of damages, and the defendants retained sufficient other security so that the limited regrant was proportionate and just pending arbitration.

Court Disposition

Ex parte injunction discharged in full; limited regrant ordering 1st and 2nd defendants to secure release of Huigu shares used as security; costs nisi in favour of defendants.

Orders

  • Ex parte injunction discharged.
  • Costs order nisi that the plaintiffs pay the defendants' costs of the ex parte application and of the application for discharge (excluding costs covered by earlier orders).