INTERNATIONAL MARITIME CARRIERS LTD AND ANOTHER v. TRILAND CO LTD AND OTHERS

INTERNATIONAL MARITIME CARRIERS LTD AND ANOTHER v. TRILAND CO LTD AND OTHERS

The court held that no serious question to be tried arose on Triland's contention that Article 108 impliedly suspends directors' powers to deal with company assets and that the pleaded allegations of fraud on the minority were insufficiently particularised; accordingly the interim injunction obtained in H.C.A. 6310/82 must be discharged. However the interim injunction in H.C.A. 6886/82 restraining Triland from bidding under Article 108 was ordered to continue pending the accounting action; on balance of convenience continued restraint in H.C.A. 6310/82 would have prejudiced the company and its creditors and so favoured discharge of that injunction.

Citation
INTERNATIONAL MARITIME CARRIERS LTD AND ANOTHER v. TRILAND CO LTD AND OTHERS
Parties
Plaintiff: Triland Company Limited; Defendant: Prat Development Limited; Defendant: International Maritime Carriers Ltd.; Defendant: Red Lake Investment Co. Limited; Defendant: Chou Wen Hsien; Defendant: Tsao Wen King; Defendant: Chow Chung Kai; Defendant: Samuel Tak Lee
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
24 September 1982
Case Number
HCA6886/1982
Procedural Posture
Company Law; Interim Injunction; Derivative Action / Interim Injunction Hearing (application to Continue or Discharge)
Outcome
Interim injunction in H.C.A. 6310/82 discharged; interim injunction in H.C.A. 6886/82 continued
Legal Topics
Directors' Powers, Articles of Association, Derivative Action, Fraud on the Minority, Implied Terms, Balance of Convenience, Shareholder Buy Out Procedure
Source Language
EN
Company Law Equity Injunctions Directors' Powers Articles of Association Derivative Action Fraud on the Minority Implied Terms +2 more

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Parties

Triland Company Limited

Plaintiff

Prat Development Limited

Defendant

International Maritime Carriers Ltd.

Defendant

Red Lake Investment Co. Limited

Defendant

Chou Wen Hsien

Defendant

Tsao Wen King

Defendant

Chow Chung Kai

Defendant

Samuel Tak Lee

Defendant

Procedural Posture

Company Law; Interim Injunction; Derivative Action / Interim Injunction Hearing (application to Continue or Discharge)

Legal Issues

  1. 1 Whether Article 108 implies a restriction preventing directors dealing with company assets pending an internal auction
  2. 2 Whether allegations sustain a derivative action for fraud on the minority requiring an injunction
  3. 3 Whether the interim injunction should be continued based on the American Cyanamid/American Cyanamid-type balance of convenience test

Ratio Decidendi

The court held that no serious question to be tried arose on Triland's contention that Article 108 impliedly suspends directors' powers to deal with company assets and that the pleaded allegations of fraud on the minority were insufficiently particularised; accordingly the interim injunction obtained in H.C.A. 6310/82 must be discharged. However the interim injunction in H.C.A. 6886/82 restraining Triland from bidding under Article 108 was ordered to continue pending the accounting action; on balance of convenience continued restraint in H.C.A. 6310/82 would have prejudiced the company and its creditors and so favoured discharge of that injunction.

Court Disposition

Interim injunction in H.C.A. 6310/82 discharged; interim injunction in H.C.A. 6886/82 continued

Orders

  • Interim injunction in H.C.A. 6886/82 continued in terms prayed by the inter partes summons