Hong Kong courts can aid outside arbitrations

0
1865
LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link

Hong Kong courts can issue interim orders in aid of arbitrations seated outside Hong Kong, which can be useful in preserving assets and evidence held in Hong Kong, usually by the respondent company.

Such interim measures are helpful because many companies, including PRC companies, often have assets in Hong Kong. These interim orders can cover relief that may not otherwise be available from the arbitral tribunal or the courts in the foreign seat of the arbitration.

One such example was recently seen in the Hong Kong case of Chen Hong Qing v Mi Jingtian & Others (judgment handed down on 27 June 2017). In this case, the court issued a receivership order on the shares of a Hong Kong company, which the plaintiff had alleged were at risk of being transferred to a third party in breach of a share pledge the plaintiff had entered into with the defendants.

CASE FACTS

In Chen Hong Qing v Mi Jingtian & Others, under the share pledge, the defendants pledged their Hong Kong shares as security for a RMB690 million (US$105.8 million) loan made to various borrowers. The share pledge prohibited the defendants from transferring the Hong Kong shares and exercising any voting rights without the plaintiff’s consent. The share pledge was governed by PRC law and provided for all disputes to be referred to CIETAC arbitration, which was seated in Beijing.

A dispute arose after the plaintiff alleged that the defendants had exercised their voting rights without the plaintiff’s consent. The plaintiff commenced a CIETAC arbitration in Beijing against the defendants, and after the arbitration had been commenced the defendants attempted to sell the Hong Kong shares to a third party without the plaintiff’s consent.

In response, the plaintiff commenced court proceedings in Hong Kong and sought an interim measure in the form of a receivership order to restrain the defendants from dealing with the Hong Kong shares, pending determination of the CIETAC arbitration in Beijing.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com

LinkedIn
Facebook
Twitter
Whatsapp
Telegram
Copy link