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Compania Sud Americana De Vapores S.a v Hin-pro International Logistics Ltd

Judgment Cited authorities 16 Cited in Precedent Map Related
Vincent
Judgment Date14 November 2016
Year2016
Citation(2016) 19 HKCFAR 586
Judgement NumberFACV1/2016
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV1/2016 COMPANIA SUD AMERICANA DE VAPORES S.A v. HIN-PRO INTERNATIONAL LOGISTICS LTD

FACV No. 1 of 2016

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 1 OF 2016 (CIVIL)

(ON APPEAL FROM CACV NO. 243 OF 2014)

____________________

BETWEEN
COMPANIA SUD AMERICANA DE VAPORES S.A. Plaintiff/
Appellant
and
HIN-PRO INTERNATIONAL LOGISTICS LIMITED Defendant/
Respondent

____________________

Before: Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Phillips of Worth Matravers NPJ

Date of Hearing: 12 October 2016

Date of Judgment: 14 November 2016

________________________

J U D G M E N T

________________________


Chief Justice Ma:

1. I agree with the judgment of Lord Phillips of Worth Matravers NPJ.

Mr Justice Ribeiro PJ:

2. I agree with the judgment of Lord Phillips of Worth Matravers NPJ.

Mr Justice Tang PJ:

3. I agree with the judgment of Lord Phillips of Worth Matravers NPJ.

Mr Justice Fok PJ:

4. I agree with the judgment of Lord Phillips of Worth Matravers NPJ.

Lord Phillips of Worth Matravers NPJ:

Introduction

5. The Appellant (“CSAV”) is a Chilean shipping corporation. The Respondent (“Hin-Pro”) is a company incorporated in Hong Kong that carries on business as a freight forwarder. Hin-Pro has brought proceedings against CSAV in various courts in the People’s Republic of China (“PRC”) under bills of lading issued by CSAV that contain exclusive English jurisdiction clauses. Hin-Pro has done so in disregard of anti-suit injunctions issued by the Commercial Court in England restraining Hin-Pro from suing CSAV in any jurisdiction other than the High Court of England and Wales.

6. In the English actions CSAV has sought damages for Hin-Pro’s breaches of contract in disregarding the exclusive jurisdiction clauses. In support of this claim for damages CSAV has sought, in the present proceedings, a Mareva injunction over Hin-Pro’s assets in Hong Kong and the appointment of a receiver, pursuant to the Court’s powers under section 21M of the High Court Ordinance (“section 21M”). The Court of Appeal, upholding a decision of the judge below, has ruled that this relief should not be granted as to grant it would be to intervene in a conflict between the English Court and the Courts of the PRC. CSAV appeals against this ruling. This appeal requires consideration of the correct approach to an application for relief under section 21M, which provides:

Interim relief in the absence of substantive proceedings

(1) Without prejudice to section 21L(1)[1], the Court of First Instance may by order appoint a receiver or grant other interim relief in relation to proceedings which-

(a) have been or are to be commenced in a place outside Hong Kong; and

(b) are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or at common law.

(2) An order under subsection (1) may be made either unconditionally or on such terms and conditions as the Court of First Instance thinks just.

(3) Subsection (1) applies notwithstanding that-

(a) the subject matter of these proceedings would not, apart from this section, give rise to a cause of action over which the Court of First Instance would have jurisdiction; or

(b) the appointment of the receiver or the interim relief sought is not ancillary or incidental to any proceedings in Hong Kong;

(4) The Court of First Instance may refuse an application for appointment of a receiver or interim relief under subsection (1) if, in the opinion of the Court, the fact that the court has no jurisdiction apart from this section in relation to the subject matter of the proceedings concerned makes it unjust or inconvenient for the court to grant the application.

(5) The power to make rules of court under section 54 includes power to make rules of court for-

(a) the making of an application for appointment of a receiver or interim relief under subsection (1); and

(b) the service out of the jurisdiction of an application or order for the appointment of a receiver or for interim relief.

...

(7) In this section “interim relief” includes an interlocutory injunction referred to in section 21L(3)

The procedural history

7. In the first half of 2012 Hin-Pro shipped at various ports in the PRC under bills of lading issued by CSAV goods for carriage to Venezuela. All the bills of lading had the following clause:

“23 Law and jurisdiction

This Bill of Lading and any claim arising hereunder shall be subject to English law and the jurisdiction of the English High Court of Justice in London. If, notwithstanding the foregoing, any proceedings are commenced in another jurisdiction, such proceedings shall be referred to ordinary courts of law. In the case of Chile, arbitrators shall not be competent to deal with any such disputes and proceedings shall be referred to the Chilean Ordinary Courts”.

8. In June 2012 Hin-Pro commenced proceedings against CSAV in the Wuhan Maritime Court claiming that cargoes shipped under 5 bills of lading for carriage from Nanjing to Puerto Caballo in Venezuela had been wrongly delivered without production of the bills of lading.

9. In response to these proceedings, in November 2012, CSAV commenced an action in the Commercial Court in London[2] (“the First English Action”) claiming that Clause 23 was an exclusive jurisdiction clause. CSAV sought and obtained ex parte from Burton J an injunction restraining Hin-Pro from further pursuing the Wuhan proceedings. Hin-Pro ignored this injunction and continued to pursue the Wuhan proceedings. This led to Andrew Smith J making an order on 21 March 2013 holding Hin-Pro, and its director and sole shareholder, Su Wei, in contempt. Ms Su, in her absence, was sentenced to 3 months’ imprisonment and an order was made for the sequestration of Hin-Pro’s property.

10. Meanwhile, Hin-Pro was busy commencing further similar proceedings in respect of other shipments in the Ningbo, Qingdao, Tianjin, Guangzhou and Shanghai Maritime Courts. CSAV took part in all the PRC proceedings and invoked the exclusive jurisdiction clauses in the bills of lading. The PRC courts held that these clauses were void. We have been provided with a translation of the judgment in the first action that was brought in Ningbo, which dealt with the issue of jurisdiction as follows:

“the place where the Defendant has its domicile, the place where the contract is performed or signed, the place where the subject matter is located, all do not fall within the UK, therefore, the place where the competent court is located agreed in the said jurisdiction clause has no actual connection with the subject dispute and the jurisdiction thus agreed shall be determined as null and void. Since the loading port of the cargo concerned was Ningbo Port, China, Ningbo was the place where the carriage commenced; and as it fell within the jurisdiction of this Court and, therefore, this Court shall have jurisdiction over the subject case”.

Thus the Court did not address the question of whether or not the jurisdiction clause was exclusive.

11. CSAV did not merely challenge the jurisdiction of the PRC courts, it joined issue on the merits of the claims brought by Hin-Pro. It is CSAV’s case that the claims made by Hin-Pro are fraudulent and that documents relied upon by Hin-Pro in support of its claims are forgeries.

12. In November 2013 CSAV commenced a second action against Hin-Pro in the English Commercial Court[3] (“the Second English Action”) in relation to the further breaches of the exclusive jurisdiction clause that had occurred. A further anti-suit injunction was obtained in relation to these proceedings. Once again Hin-Pro ignored this and continued to prosecute the actions commenced in the PRC.

13. On 26 May 2014, after a contested trial, the Ningbo Maritime Court gave judgment against CSAV in the sum of US$360,000 together with costs in the sum of RMB¥100,000.

14. On 13 June 2014 CSAV obtained ex parte in the English Commercial Court a worldwide freezing order against Hin-Pro in support of the two English Actions in the sum of US$27,835,000. This represented the total of the sums claimed by Hin-Pro in the various PRC proceedings. That order also required Hin-Pro to disclose its assets.

15. Three days later, on 16 June 2014, an application was made ex parte in the present proceedings, pursuant to section 21M, for a Mareva injunction freezing Hin-Pro’s assets in Hong Kong. This was in aid of the two English Actions and to give effect to the worldwide freezing order made by the English Court. DHCJ Saunders granted the injunction and made an ancillary disclosure order, requiring the defendant to disclose its assets in Hong Kong in so far as these exceeded HK$78,000.

16. On 17 July 2014, on the application of CSAV, DHCJ Saunders made a Receivership Order in respect of Hin-Pro’s assets. While the object of this was the preservation of those assets, the terms of the Order went wider inasmuch as it authorized the receivers to:

“intervene and take any necessary steps on behalf of the Defendants in the PRC legal actions ... and if thought fit, withdraw and discontinue the said legal actions”.

17. It does not seem to me that this part of the Order was one that could properly be made under section 21M. Mr Scott SC, who has appeared on behalf of CSAV, has not sought to justify it. Indeed he has made it plain that he does not seek an order reinstating the Receivership Order. This Court has not been told what steps the Receivers took, or sought to take, in respect of the PRC proceedings, but those proceedings appear to have run their course.

18. On 18 July 2014 DHCJ Saunders, on the application of CSAV, amended the Mareva injunction so that it extended to the assets of...

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