GE TRANSPORTATION (SHENYANG) CO, LTD v. A-POWER ENERGY GENERATION SYSTEMS,LTD AND OTHERS

GE TRANSPORTATION (SHENYANG) CO, LTD v. A-POWER ENERGY GENERATION SYSTEMS,LTD AND OTHERS

On the pleadings the court was satisfied Head Dragon and ANE had notice of A-Power's indebtedness and, by transferring Liaoning shares at a significant undervalue after an interim/arbitral order, intended to render A-Power judgment‑proof; that disposition was voidable under s.60 CPO and also supported liability for inducing breach; accordingly default judgment was entered setting aside the transfer and ordering consequential relief and assessment of damages.

Citation
GE TRANSPORTATION (SHENYANG) CO, LTD v. A-POWER ENERGY GENERATION SYSTEMS,LTD AND OTHERS
Parties
Plaintiff: GE Transportation (Shenyang) Co, Ltd; 1st Defendant: A-Power Energy Generation Systems, Ltd; 2nd Defendant: Head Dragon Holdings Limited; 3rd Defendant: Asia New Energy Group Limited; 4th Defendant: Lu Jinxiang; 5th Defendant: Zhang Yuqiang; 6th Defendant: Liaoning Hi-Tech Energy Group Co, Ltd
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 February 2014
Case Number
HCA1720/2013
Procedural Posture
Commercial Civil Action (contract, Conspiracy, Proprietary Relief) / Application for Default Judgment Under Order 19 Rule 7; Judgment in Default Granted
Outcome
Default judgment granted against the 2nd and 3rd defendants; Share Transfer Agreement dated 3 May 2012 set aside; consequential relief granted; damages to be assessed by a Master.
Legal Topics
Default Judgment, Voidable Transactions, Fraudulent Conveyance, Inducing Breach of Contract, Damages, Disclosure Orders, Enforcement of Arbitral Award
Source Language
EN
Contract Insolvency Property Law Equity Civil Procedure Fraud Default Judgment Voidable Transactions +5 more

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Parties

GE Transportation (Shenyang) Co, Ltd

Plaintiff

A-Power Energy Generation Systems, Ltd

1st Defendant

Head Dragon Holdings Limited

2nd Defendant

Asia New Energy Group Limited

3rd Defendant

Lu Jinxiang

4th Defendant

Zhang Yuqiang

5th Defendant

Liaoning Hi-Tech Energy Group Co, Ltd

6th Defendant

Procedural Posture

Commercial Civil Action (contract, Conspiracy, Proprietary Relief) / Application for Default Judgment Under Order 19 Rule 7; Judgment in Default Granted

Legal Issues

  1. 1 Whether the Share Transfer Agreement was voidable as a disposition made with intent to defraud under s.60 Conveyancing and Property Ordinance
  2. 2 Whether Head Dragon and ANE had knowledge and intention to render A-Power judgment‑proof by transferring the Liaoning shares at undervalue
  3. 3 Whether Head Dragon and ANE induced a breach of A-Power's obligations under the guarantee attracting damages

Ratio Decidendi

On the pleadings the court was satisfied Head Dragon and ANE had notice of A-Power's indebtedness and, by transferring Liaoning shares at a significant undervalue after an interim/arbitral order, intended to render A-Power judgment‑proof; that disposition was voidable under s.60 CPO and also supported liability for inducing breach; accordingly default judgment was entered setting aside the transfer and ordering consequential relief and assessment of damages.

Court Disposition

Default judgment granted against the 2nd and 3rd defendants; Share Transfer Agreement dated 3 May 2012 set aside; consequential relief granted; damages to be assessed by a Master.

Orders

  • Share Transfer Agreement dated 3 May 2012 between Head Dragon and ANE set aside
  • ANE to disclose by affirmation within 14 days whether it is legal and/or beneficial owner of the Liaoning shares and, if part only, identify which part