Hong Kong Case Law: Decisions & Judgments

Topic

Bank guarantees

Legal area

Court

18 Feb 2014

SHINEWING SPECIALIST ADVISORY SERVICES LTD v. CHEN YUNG NGAI KENNETH (as the Liquidator of De Rodeo Catering Limited (in Compulsory Liquidation))

Citation

SHINEWING SPECIALIST ADVISORY SERVICES LTD v. CHEN YUNG NGAI KENNETH (as the Liquidator of De Rodeo Catering Limited (in Compulsory Liquidation))
Court

Court of First Instance
Case number

HCCW346/2010

The court exercised its discretion to order interim payments despite the absence of bank guarantees, fixing specific interim amounts based on the provenance and timing of the bills and past taxation reductions, and imposed procedural steps for supplying narratives and prosecuting taxation.
25 Sept 2013

HYUNDAI ENGINEERING & CONSTRUCTION CO.,LTD v.UBAF (HONG KONG) LTD

Citation

HYUNDAI ENGINEERING & CONSTRUCTION CO.,LTD v.UBAF (HONG KONG) LTD
Court

Court of First Instance
Case number

HCA175/2012

The court granted the stay because the parties expressly agreed the back-to-back counter-guarantees were governed by the Uniform Rules which include Article 35 providing exclusive jurisdiction to the Mainland court; foreseeable inconveniences and risk of fragmentation did not constitute the very strong reasons required to displace the contractual forum choice; the independence of guarantees under URDG meant parallel proceedings were contemplated and therefore the stay in favour of the Luoyang Intermediate People\'s Court was appropriate.
27 Oct 2010

WANG RUIYUN v. GEM GLOBAL YIELD FUND LTD

Citation

WANG RUIYUN v. GEM GLOBAL YIELD FUND LTD
Court

Court of First Instance
Case number

HCCL16/2006

Although the defendant's failure to comply with orders was advertent and serious, the court exercised its discretion to set aside the interlocutory default judgment and the consequential damages assessment because default judgments are disfavoured and the plaintiff's late re-amendment to add a substantial claim weighed in favour of allowing a trial on merits; relief was conditional on stringent security — payment into court of HK$60,000,000 or an acceptable first class bank guarantee within 28 days — and other procedural conditions, failing which the judgments would stand.
5 Feb 2007

KIN SHING ENGINEERING (HK) CO LTD v. VINSON ENGINEERING LTD

Citation

KIN SHING ENGINEERING (HK) CO LTD v. VINSON ENGINEERING LTD
Court

Court of Appeal
Case number

CACV138/2005

Given the Defendant's demonstrated financial difficulties, winding-up proceedings and taxed costs exposure, the court exercised its discretion to order security for costs of HKD 250,000 in each appeal, payable by lodgement or approved bank guarantee by the specified date, with failure to comply resulting in dismissal of the appeal(s).
10 Jan 2006

WING FAI CONSTRUCTION CO LTD v. FITZROYA FINANCE CO LTD

Citation

WING FAI CONSTRUCTION CO LTD v. FITZROYA FINANCE CO LTD
Court

Court of First Instance
Case number

HCA2570/2003

The court held that it had jurisdiction to permit a variation in the mode of providing security for costs under a consent order because the substance of the order (that security be provided) remained unchanged; a bank guarantee from HSBC, approved by the Registrar, provided equivalent protection to cash in court and therefore the variation was allowed.
19 Dec 2005

西安民生集團股份有限公司 AND ANOTHER v. LO KAM WING AND OTHERS

Citation

西安民生集團股份有限公司 AND ANOTHER v. LO KAM WING AND OTHERS
Court

Court of First Instance
Case number

HCA2183/2001

The court exercised its discretion to grant security for costs against the plaintiffs (and, in the counterclaim context, against the foreign plaintiff) because the unexpected extension of the trial, plus the plaintiffs' impecuniosity/foreign status, created a real risk that costs orders could not be enforced; however the quantum was significantly reduced for fairness given lateness, composition of fees and other factors, and security was ordered in the form of bank guarantees with costs awarded on a nisi basis.
31 Oct 2003

RE CHIME CORPORATION LTD

Citation

RE CHIME CORPORATION LTD
Court

Court of First Instance
Case number

HCMP4146/2001

The court accepted substitution of the BOC HK$520m guarantee with a multi-currency cash deposit equal to 105% of HK$520m held in jointly operated interest bearing accounts because (a) the purpose of the security was to secure dividends payable by Chime which would be returned if the allotment were set aside, (b) existing protective undertakings made it improbable the funds originated from Chime or CAL so a personal undertaking was unnecessary, and (c) the proposed 105% buffer and a replenishment/drawdown regime adequately address exchange rate risk, making payment into court unnecessary.
29 Jan 1999

WUI FU DEVELOPMENT CO LTD. v. TAK YUENCONSTRUCTION CO LTD.

Citation

WUI FU DEVELOPMENT CO LTD. v. TAK YUENCONSTRUCTION CO LTD.
Court

Court of First Instance
Case number

HCCT40/1998

Given the plaintiff's deteriorated financial position and the insufficiency of the proposed alternative securities to provide equivalent protection to the defendant, the court refused to release or vary the undertaking to provide bank guarantees and dismissed the plaintiff's application, ordering the plaintiff to pay the defendant's costs of the application.
16 Oct 1998

KAROCHEM INTERNATIONAL LTD. v. RICHARD LIU & CO. LTD. t/a KAYO PACIFIC INC.

Citation

KAROCHEM INTERNATIONAL LTD. v. RICHARD LIU & CO. LTD. t/a KAYO PACIFIC INC.
Court

Court of Appeal
Case number

CACV206/1998

Plaintiff demonstrated the appellant company was impecunious (failed garnishee, withdrawn banking facilities, inability to afford representation) and therefore the appeal must be stayed until security for costs of $130,000 is provided; failure to give security within the time ordered will result in dismissal of the appeal.
12 Jan 1989

THE QUEEN v. NAVARATNAM VIJAYARATNAM AND ANOTHER

Citation

THE QUEEN v. NAVARATNAM VIJAYARATNAM AND ANOTHER
Court

Court of Appeal
Case number

CACC238/1988

The Court found the convictions safe because the evidence established that D1 was the main mover and the guarantees were forged and, in the absence of any satisfactory explanation, adverse inferences drawn by the trial judge were justified; leave to appeal against D1's conviction was refused. On sentencing, the Court found D2's role materially lesser and reduced his sentence from two years to eighteen months to correct unjustified disparity.