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FACV No. 14 of 2017
[2018] HKCFA 12
IN THE COURT OF FINAL APPEAL OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
FINAL APPEAL NO.14 OF 2017 (CIVIL)
(ON APPEAL FROM CACV NO. 272 OF 2015)
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| BETWEEN |
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(1) ASTRO NUSANTARA INTERNATIONAL B.V. |
Applicants/ |
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(2) ASTRO NUSANTARA HOLDINGS B.V. |
Claimants in the Arbitration/ |
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(3) ASTRO MULTIMEDIA CORPORATION N.V. |
Judgment Creditors |
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(4) ASTRO MULTIMEDIA N.V. |
(Respondents) |
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(5) ASTRO OVERSEAS LIMITED (formerly
known as AAAN (Bermuda) Limited)
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(6) ASTRO ALL ASIA NETWORKS PLC |
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(7) MEASAT BROADCAST NETWORK SYSTEMS SDN BHD |
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(8) ALL ASIA MULTIMEDIA NETWORK FZ-LLC |
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and |
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(1) PT AYUNDA PRIMA MITRA |
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(2) PT FIRST MEDIA TBK (formerly known
as PT BROADBAND MULTIMEDIA TBK)
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(Appellant) |
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(3) PT DIRECT VISION |
Defendants/Respondents in the Arbitration/
Judgment Debtors |
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Before: Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Reed NPJ
Date of Hearing: 12 March 2018
Date of Judgment: 11 April 2018
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J U D G M E N T
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Chief Justice Ma:
1. I agree with the judgment of Mr Justice Ribeiro PJ.
Mr Justice Ribeiro PJ:
2. This appeal raises issues concerning the principles applicable where a party seeks leave to resist enforcement of a New York Convention arbitration award out of time.
3. The eight respondent companies, members of a Malaysian media group conveniently referred to as “Astro”, were the claimants in the arbitration. The 1st to 5th, 7th and 8th respondents are subsidiaries of the 6th respondent, a substantial company listed on the Kuala Lumpur Stock Exchange.
4. The appellant (“First Media”) is a substantial company listed on the Indonesian Stock Exchange and part of an Indonesian conglomerate referred to as “Lippo”. It was a respondent in the arbitration and Astro seeks to enforce an award against it in a sum exceeding US$130 million. First Media seeks leave to resist enforcement out of time on the basis that the award was made without jurisdiction.
A. The underlying dispute and the arbitration
5. By a Subscription and Shareholders’ Agreement (“the SSA”) dated 11 March 2005, Lippo companies including First Media entered into a joint venture with companies in Astro (originally consisting of the 3rd to 5th respondents and then, by novation, the 1st and 2nd respondents) for the provision of multimedia and television services in Indonesia. The joint venture vehicle was to be “Direct Vision” which was the 3rd respondent in the arbitration.
6. The arbitration agreement is contained in the SSA and provides for arbitration through the Singapore International Arbitration Centre (“SIAC”), applying Singapore law. However, the 6th, 7th and 8th respondents were never parties to the SSA. They have been referred to throughout as “the Additional Parties”.
7. The joint venture failed because certain conditions precedent were not fulfilled. However, in the meantime, Direct Vision had pressed ahead with the commercial launch of its pay satellite television service in Indonesia and between about December 2005 and October 2008, the Additional Parties had been providing Direct Vision with substantial funds and services. The breakdown of the joint venture led Lippo to commence court proceedings against Astro in Indonesia, alleging that Astro was obliged to continue the funding and support services under an oral joint venture contract. Astro’s riposte was to commence the arbitration against Lippo, including First Media, at SIAC by notice dated 6 October 2008, seeking an anti-suit injunction to restrain the Indonesian proceedings and advancing monetary claims, inter alia, by way of restitution and quantum meruit.
8. Astro applied to join the Additional Parties (who had the main monetary claims) to the arbitration relying on rule 24(b) of the 2007 SIAC Rules.[1] Such joinder was unsuccessfully resisted by Lippo before the arbitral tribunal.[2] By its Award on Preliminary Issues dated 7 May 2009, the tribunal ruled that on the true construction of rule 24(b), it had power to join persons, such as the Additional Parties, who were not already parties to the agreement to refer the dispute to arbitration.[3] Lippo could have, but did not, challenge that award in the Singapore Court which had supervisory jurisdiction.
9. The arbitration then proceeded on the merits, with the tribunal rendering four additional awards, including an Interim Final Award dated 16 February 2010 in favour of Astro in a sum exceeding US$130 million. Lippo again did not seek to challenge the validity of those awards in the Singapore Court.
B. Astro’s enforcement of the awards
10. Astro then proceeded to seek enforcement of the awards, principally against First Media, in various jurisdictions including Singapore and Hong Kong.
11. In Singapore, Astro was initially granted leave to enforce the awards but First Media succeeded on its appeal to the Singapore Court of Appeal which held, by a judgment dated 31 October 2013 (“the SCA Judgment”),[4] that rule 24(b) did not empower the tribunal to order joinder of the Additional Parties since they were not parties to the SSA. The tribunal therefore lacked jurisdiction to make the awards in favour of the Additional Parties and the Singapore enforcement orders in their favour were set aside.
12. On 3 August and 9 September 2010, at about the same time as the enforcement proceedings were commenced in Singapore, Astro obtained orders from Saunders J granting them leave to enforce the tribunal’s awards in Hong Kong against the Lippo parties pursuant to section 2GG[5] of the Arbitration Ordinance.[6]
13. In accordance with Order 73 r 10(6),[7] Lippo had 14 days after service of those orders to apply to set them aside. Believing that they did not have any assets in Hong Kong, Lippo made no such application and, on 9 December 2010, Saunders J entered judgment against them in terms of the awards.
14. However, on 22 July 2011, Astro obtained a garnishee order nisi attaching a debt of US$44 million due from AcrossAsia Limited (“AAL”) to First Media. AAL is a Cayman Islands company listed on the Growth Enterprise Market of the Stock Exchange of Hong Kong and holds 55.1% of the issued shares, and thus a controlling interest, in First Media. The debt arose out of an agreement dated 30 June 2011 whereby First Media granted a loan facility of US$44 million to AAL. When, on 5 August 2011, the garnishee order nisi was served on First Media, AAL filed an affirmation opposing the grant of an order absolute and, on 18 January 2012, First Media took out the summons applying for an extension of time to apply to set aside the Hong Kong enforcement orders and judgment. That summons is at the centre of the present appeal.
15. The SCA Judgment was then pending and, at Astro’s instigation, First Media’s application was stayed to await the Singapore Court of Appeal’s decision. Astro also obtained judgment, dated 31 October 2013,[8] from Deputy High Court Judge Mayo (who took a dim view of what he found to be collusive conduct between First Media and AAL) directing that the garnishee order be made absolute.
16. The SCA Judgment was coincidentally also published on 31 October 2013 and appeals were lodged against Deputy High Court Judge Mayo’s decision by both AAL and First Media. In the light of the SCA Judgment, Mimmie Chan J[9] unconditionally stayed execution of the garnishee order absolute pending determination of First Media’s setting aside application. The Court of Appeal refused Astro leave to appeal against Her Ladyship’s unconditional order[10] and Chow J therefore proceeded to deal substantively with First Media’s summons for leave to make a setting aside application.
C. Chow J’s judgment[11]
17. It is common ground that the awards in question are Convention awards.[12] The law’s policy is to aid enforcement of such awards, section 42 making them enforceable, with leave, in the same way as a judgment of the Court. Grounds for refusing (and hence for setting aside) enforcement[13] are strictly limited. Section 44(1) provides that enforcement of a Convention award “shall not be refused except in the cases mentioned in this section”. Accordingly, to succeed in its setting aside application, First Media has to bring itself within one of the cases listed in section 44(2)[14] or section 44(3)[15] (and also persuade the Court that its application should be allowed to proceed although well out of time).
18. Since First Media contends that the awards were made without jurisdiction, the exception which is principally relevant is contained in section 44(2)(b):
“Enforcement of a Convention award may be refused if the person against whom it is invoked proves ...
(b) that the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made ...”[16]
19. Chow J upheld the enforcement orders and judgment, rejecting First Media’s application for leave to apply out of time to set them aside on the section 44(2)(b) ground.
C.1 The effect of the SCA Judgment
20. His Lordship so decided even though he held that the SCA Judgment had conclusively established that the arbitral tribunal did not have power to join the Additional Parties to the arbitration, that being a matter governed by Singapore law.[17] It follows, so the Singapore Court of Appeal held,[18] that there was no arbitration agreement in existence and thus no valid agreement on which to found the awards. That conclusion, as Lord Collins of...
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