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Agritrade Resources Ltd Through The Joint Provisional Liquidators Ng Kian Kiat, Oon Su Sun And E. Alexander Whittaker And Another v Ashok Kumar Sahoo

Judgment Cited authorities 16 Cited in Precedent Map Related
Vincent
Judgment Date23 March 2021
Neutral Citation[2021] HKCFI 685
Year2021
Judgement NumberHCA1660/2020
Subject MatterCivil Action
CourtCourt of First Instance (Hong Kong)
HCA1660A/2020 AGRITRADE RESOURCES LTD THROUGH THE JOINT PROVISIONAL LIQUIDATORS NG KIAN KIAT, OON SU SUN AND E. ALEXANDER WHITTAKER AND ANOTHER v. ASHOK KUMAR SAHOO

HCA 1660/2020

[2021] HKCFI 685

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1660 OF 2020

________________________

BETWEEN

AGRITRADE RESOURCES LIMITED THROUGH THE JOINT PROVISIONAL LIQUIDATORS NG KIAN KIAT, OON SU SUN AND E. ALEXANDER WHITTAKER 1st Plaintiff
FAIR THERMAL POWER LIMITED 2nd Plaintiff
and
ASHOK KUMAR SAHOO Defendant

________________________

Before: Deputy High Court Judge To in Chambers
Date of Hearing: 23 December 2020
Date of Decision: 23 March 2021

________________________

D E C I S I O N

________________________

INTRODUCTION

The applications

1. On 25 September 2020, the Plaintiffs made an urgent application by way of letter before Lam J for an ex parte worldwide Mareva injunction against the Defendant. After a number of enquiries by Godfrey Lam J and the filing of a supplemental affirmation, Lam J granted an injunction at the second ex parte hearing on 28 September 2020 (the “Injunction”) with a remark that “on balance, it probably just passes the threshold”. Lam J left the issue of disclosure for resolution inter partes on the return date.

2. On 29 September 2020, the Plaintiff applied by way of an inter parte summons to continue the Injunction (the “Plaintiffs’ Summons”). On the return date the Defendant opposed the Plaintiffs’ Summons. Deputy High Court Judge Patrick Fung SC ordered the Injunction to continue until the substantive hearing of the Plaintiffs’ Summons including the issue of disclosure.

3. By summons dated 19 October 2020, the Plaintiffs applied to be released from Undertaking 8 of the Injunction, as they wished to take legal action in Singapore to prevent the dissipation of the Defendant’s assets located there. The application was adjourned for hearing before Yeung J on 8 January 2021.

4. On 27 October 2020, the Plaintiff took out another summons seeking to vary Undertaking 7 and Undertaking 8. On 30 October 2020, Lam J granted leave to the Plaintiff to withdraw the summons dated 27 October 2020 and leave to amend the summons dated 19 October 2020 by carving out Singapore from any restriction on overseas proceedings or enforcement in Undertaking 7 and Undertaking 8; vacated the hearing before Yeung J on 8 January 2021; and adjourned the application to this hearing.

5. In addition, on 21 December 2020, the Plaintiffs sought leave to file and serve the 2nd Affirmation of Manish Sangani (in draft form) for the purpose of this hearing.

6. At this hearing, Mr Brown, counsel for the Plaintiffs, confirmed that the amount sought to be restrained is reduced from US$12,675,000 to US$5,252,000 and that the 2nd Plaintiff shall not proceed with this claim in Hong Kong. This is therefore the substantive hearing of the following applications of the 1st Plaintiff in relation to a worldwide Mareva injunction against the Defendant:

(1) the Plaintiffs’ Leave Application to file and serve the draft 2nd Affirmation of Manish Sangani (the “Leave Application”);

(2) paragraph 1 of the Plaintiffs’ Summons for the continuation of the Injunction until trial or further order (the “Continuation Application”);

(3) paragraphs 2 and 3 of the Plaintiffs’ Summons and paragraph 2 of the Order of DHCJ Patrick Fung SC dated 9 October 2020 for ancillary disclosure (the “Disclosure Application”); and

(4) the Plaintiffs’ summons dated 19 October 2020 for variation of the Injunction with leave to amend granted by Lam J on 30 October 2020 (the “Variation Application”).

The parties and dramatis personae

7. Agritrade International Pte Limited is the indirect controlling shareholder of Agritrade Resources Limited.

8. Agritrade Resources Limited (“ARL”) is a company incorporated in Bermuda with shares listed on the Main Board of The Stock Exchange of Hong Kong (stock code: 1131). It is the 1st Plaintiff herein, which is now in liquidation.

9. Fair Thermal Power Limited (“Fair Thermal”) is a company incorporated in the British Virgin Islands. It is a wholly-owned subsidiary of ARL and the 2nd Plaintiff herein.

10. Agritrade Power Venture Pvt Ltd (“Agritrade India”) is a company incorporated in India. According to the Plaintiffs, it is a wholly-owned subsidiary of ARL. According to the Defendant, its shareholders are ARL, Fair Thermal, Agritrade Power Holding Mauritius Limited (“Agritrade Mauritius”) and Agritrade Power Holding Pte. Ltd (“Agritrade Singapore”). Effectively, it is a wholly-owned subsidiary of ARL.

11. Newtone Management Limited (“Newtone”) is a company incorporated in Hong Kong and wholly-owned by ARL. The Defendant was employed by Newtone as chief strategy and investment officer under a written employment contract subject to Hong Kong law with a non-exclusive Hong Kong jurisdiction clause. His employment was intended to cover his role as chief financial officer of ARL. That was in fact regularized as reflected in ARL’s announcement to The Stock Exchange dated 1 August 2013.

12. Agritrade Resources Asia Pte Ltd (“Agritrade Asia”) is a company incorporated in Singapore. The Defendant was also employed by Agritrade Asia as chief financial officer of ARL under a written employment contract subject to Singaporean law with a Singapore jurisdiction clause. No claim is made under this contract.

13. Agritrade Singapore is a company incorporated in Singapore. It is a wholly-owned subsidiary of Fair Thermal.

14. Agritrade Mauritius is a company incorporated in Mauritius. It is a wholly-owned subsidiary of Fair Thermal.

15. Entwickeln India Energy Private Limited (“Entwickeln”) is a company incorporated in India. It is jointly-owned by Agritrade Singapore as to 99.8% and Agritrade Mauritius as to the remaining 0.2%. Effectively, it is an indirect wholly-owned subsidiary of Fair Thermal and of ARL.

16. SKS Power Generation (Chhattisgarh) Limited (“SKS”) is a company incorporated in India holding a coal-based thermal power plant in India. It was indebted to a number of lenders. Entwickeln settled SKS’s debts with the lenders and took an assignment of the debts owed to the lenders by SKS. It was wholly-owned by Entwickeln until 31 January 2020 when it was amalgamated with Entwickeln pursuant to an order of an Indian court. The amalgamated entity continues to be known as Entwickeln and remains owned by Agritrade Singapore and Agritrade Mauritius.

17. Berrio Global Limited (“Berrio Global”) is a company incorporated in the British Virgin Islands and wholly-owned by the Defendant and his wife.

18. Berrio Mauritius Global Limited (“Berrio Mauritius”) is a company incorporated in Mauritius, wholly-owned by Berrio Global and beneficially owned by the Defendant and his wife.

19. Ng Xinwei (“Ng”), Ng Say Pek and Ong Jia Sheng Jeffrey were former directors of ARL group of companies.

20. Manish Sangani (“Sangani”) is the former company secretary of SKS from 22 March 2020 to 13 July 2013 and again from 6 February 2014 to 2 November 2020, according to the Plaintiffs.

21. Ashok Kumar Sahoo (“Sahoo”) is the Defendant herein. He was formerly an Indian national and is now a citizen and resident of Singapore. At the material time, he was the chief financial officer of ARL and an executive director of part of ARL’s Executive Board Committee, a director of more than 25 companies within the ARL group, including Fair Thermal, Entwickeln, SKS and Agritrade India; and a trusted member of the ARL group’s senior management.

22. Nisha Sahu (“Nisha”) is the wife of the Defendant.

23. Abhaya Kumar Sahoo (“Abhaya”) is the Defendant’s brother. At the material time Abhaya and the Defendant were the two directors of Agritrade India. Ng was the only other director.

24. Abhijeet Kar (“Abhijeet”) was a director of Entwickeln and director and chief financial officer of SKS. He was a childhood friend of the Defendant and Abhaya.

Vikrant Anand’s Affirmation

25. One of the affirmations filed by the Plaintiffs was made by Vikrant Anand (“Anand”), a senior associate at Clasis Law, the solicitors representing the Plaintiffs in India. In his affirmation, he set out the position under Indian law in relation to issuance of sweat equity in a non-listed public company in India. He does not purport to be giving expert evidence. While not objecting to the filing of his affirmation as such, the Defendant argued that Anand cannot be an independent legal expert on Indian law as he is representing the Plaintiffs in India. He invited the court to disregard Anand’s evidence on the ground that it is inadmissible opinion evidence.

26. In interlocutory matters, evidence of foreign law is most properly given by way of an affidavit of the expert. In practice, the Hong Kong courts are more relaxed because of the interlocutory nature and urgency. The courts often rely for interlocutory purposes upon unsworn letter or opinion exhibited to an affidavit of the adducing party’s solicitor. However, evidence in that form may, in the court’s discretion, be given somewhat lesser weight in cases of doubt: The Conflict of Laws in Hong Kong[1].

27. Sweat equity under Indian law was raised by the Defendant. There was no direction for filing expert evidence. In any event, it is a narrow issue. If the Defendant is of the view that the opinion of Anand is incorrect, he could have sought leave to file evidence in reply, but he did not. There is no dispute that Anand is a lawyer qualified to practice in...

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