ZS CAPITAL FUND SPC AND OTHERS v. ASTOR ASSET MANAGEMENT 3 LTD AND ANOTHER

ZS CAPITAL FUND SPC AND OTHERS v. ASTOR ASSET MANAGEMENT 3 LTD AND ANOTHER

Plaintiffs established a strong prima facie right to redeem the deposited shares and defendant had no arguable defence to defeat the equity of redemption; although defendant has an arguable case that the Proviso might be applied, that does not negate plaintiffs' entitlement to interim relief; after deducting loan proceeds, interest and agreed costs the court ordered interim payment of HK$115,300,000 and release of the proceeds in court to plaintiffs.

Citation
[2024] HKCFI 1535
Parties
1st Plaintiff: ZS CAPITAL FUND SPC; 2nd Plaintiff: ZHANG NINGNING; 3rd Plaintiff: ZHOU YIHUI; 4th Plaintiff: MA DANYU; 1st Defendant: ASTOR ASSET MANAGEMENT 3 LIMITED; 2nd Defendant: ZUNDIAO SECURITIES LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 August 2024
Case Number
HCA1157/2020
Procedural Posture
Interim Payment Application in Civil Action Concerning Share Pledge/loan Security / Decision on Summons for Interim Payment (interlocutory/chambers)
Outcome
Interim payment granted in favour of plaintiffs
Legal Topics
Interim Payment, Equity of Redemption, Clog on Redemption, Unenforceability Under Money Lenders Ordinance S.23, Res Judicata/issue Estoppel, Enforcement of Security, Arbitration Awards
Source Language
EN
Contract Equity Civil Procedure Financial Regulation Arbitration Enforcement Interim Payment Equity of Redemption Clog on Redemption +4 more

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Parties

ZS CAPITAL FUND SPC

1st Plaintiff

ZHANG NINGNING

2nd Plaintiff

ZHOU YIHUI

3rd Plaintiff

MA DANYU

4th Plaintiff

ASTOR ASSET MANAGEMENT 3 LIMITED

1st Defendant

ZUNDIAO SECURITIES LIMITED

2nd Defendant

Procedural Posture

Interim Payment Application in Civil Action Concerning Share Pledge/loan Security / Decision on Summons for Interim Payment (interlocutory/chambers)

Legal Issues

  1. 1 Whether plaintiffs retain equity of redemption in deposited shares despite alleged events of default
  2. 2 Whether Stock Loan Agreements are unenforceable under Money Lenders Ordinance s.23 and whether the court should invoke the Proviso to relieve defendant
  3. 3 Whether defendant has an arguable defence such that interim payment should be refused

Ratio Decidendi

Plaintiffs established a strong prima facie right to redeem the deposited shares and defendant had no arguable defence to defeat the equity of redemption; although defendant has an arguable case that the Proviso might be applied, that does not negate plaintiffs' entitlement to interim relief; after deducting loan proceeds, interest and agreed costs the court ordered interim payment of HK$115,300,000 and release of the proceeds in court to plaintiffs.

Court Disposition

Interim payment granted in favour of plaintiffs

Orders

  • Interim payment of HK$115,300,000 to plaintiffs
  • The proceeds in court are to be released and paid to plaintiffs in satisfaction of the interim payment