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[C] v [D]

Judgment Cited authorities 5 Cited in Precedent Map Related
Vincent
Judgment Date10 July 2020
Neutral Citation[2020] HKCFI 1596
Year2020
Judgement NumberHCCT29/2020
Subject MatterConstruction and Arbitration Proceedings
CourtCourt of First Instance (Hong Kong)
HCCT29/2020 [C] v. [D]

HCCT 29/2020

[2020] HKCFI 1596

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 29 OF 2020

____________

IN THE MATTER of an Arbitration
and
IN THE MATTER of an application for injunctive relief under Section 21L of the High court Ordinance, Cap 4 and Order 73 of the Rules of the High Court, Cap 4A
and
IN THE MATTER of Section 45 of the Arbitration Ordinance, Cap 609

_____________

BETWEEN
[C] Plaintiff

and
[D] Defendant

_____________

Before: Hon G Lam J in Chambers (Not Open to the Public)

Date of Hearing: 10 July 2020

Date of Decision: 10 July 2020

________________________

D E C I S I O N

________________________

1. This is an application by [C] for an interim anti‑suit injunction in respect of a set of proceedings brought by [D] for the winding up of [C] in the High Court of the British Virgin Islands (“BVI”).

2. [C] is a BVI company, whereas [D] is a Cayman Islands company.

3. The matter has arisen from a Share Sale and Purchase Agreement dated 28 December 2017 entered into by, among others, [C] and [D], which has been amended successively by two supplemental agreements. By that agreement as amended, in very broad terms, [C] agreed to sell and [D] agreed to purchase 3,494 shares in a Cayman Islands company called [H] for a total consideration of approximately US$40 million. There is a clause in the agreement giving [D] the right to require [C] to buy back the shares if, inter alia, [H] had not completed an IPO by the end of 2018. There is also a clause in the agreement providing that

“ [a]ny disputes or claims arising out of or in connection with this Agreement …, including any question regarding its existence, validity, termination, shall be referred to and finally resolved by arbitration in Hong Kong administered by the Hong Kong International Arbitration Centre … in accordance with the HKIAC Procedures for the Administration of International Arbitration in force as of the date of this Agreement … The seat of the arbitration shall be Hong Kong. …”

4. What has happened — and this is not disputed — is that there was no completed IPO in 2018 and, as a result, [D] decided to exercise its right to require [C] to buy back the shares and served a notice on [C] accordingly in September 2019. When [C] did not do so, [D] instituted proceedings in the BVI on 4 March 2020 for an order to wind up [C] and to appoint liquidators.

5. The first hearing of those proceedings was scheduled to take place on 11 May 2020. On that date, [C] through its BVI lawyers filed a witness statement in the BVI court stating [C] had a bona fide and substantial defence to the claim for the buyback price on the ground that [D] no longer held the shares that were the subject matter of the buyback, having sold them in December 2019. The statement said, however, that the negotiations for the buyback of the shares were still active and ongoing. The statement concluded by saying that if the (BVI) court considered that the nature of the buyback obligation needed to be clarified, that was a matter that should be referred to arbitration in Hong Kong pursuant to the arbitration clause in the Share Sale and Purchase Agreement.

6. The next hearing of the BVI proceedings was scheduled for 22 June 2020.

7. On 16 June 2020, [C] issued a notice of arbitration to the HKIAC and to [D], claiming that the effectiveness of the buyback clause was subject to the condition that the shares must be held by [D] and that, in late 2019, [D] had transferred the shares in their entirety to another company or other companies. [C], therefore, sought an arbitral award for a...

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