An Feng International Trading Ltd. v. Honour Link International Development Ltd.

CACV 52/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 52 OF 1999

(On appeal from HCMP 571/1999)

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D E C I S I O N

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Rogers, J.A. :

1. This is an application by the Plaintiff by summons that the Defendant should be restrained, whether by itself, its servants or agents or otherwise from presenting a petition to wind-up the Plaintiff based on the sum of US$693,824.33 it claimed in a statutory demand dated 8th January 1999 which was served on the Plaintiff on the same day.

2. It comes to this Court by way of an application in the appeal. There was a hearing before Mrs. Justice Le Pichon on 4th February 1999 where the substantive application was made.

3. On 11th February which was yesterday at 2:30 p.m., Mrs. Justice Le Pichon handed down her judgment. Such are the Laws' delays that between then and now an application has been made before the Judge for a stay pending the appeal and this application now comes before me.

4. The background facts are to be found in the judgment of the Judge below, I do not propose to repeat but gratefully adopt them. Reference to that judgment should be made in reading this. The substance of the judgment below was, first of all, that the Plaintiff had not established an arguable defence to the claim on merits. From the reading of the papers which I have had, that appears to be correct. It does not seem to be substantially challenged here.

5. The Judge then went on to consider the question of arbitration and the Judge came to the conclusion :-

"Whilst it is not for this court to deal substantively with the question of whether the arbitration provisions apply, nonetheless, the strength of An Feng's case is a consideration in the exercise of the court's discretion. It is so fraught with difficulty that, in all the circumstances, I would not consider granting the injunction sought unless the entire amount of the debt is paid into court pending the determination of An Feng's stay application."

6. On the application yesterday, the order that was arrived at was that if the Plaintiff would pay the amount claimed into court by 3 p.m. on 22nd February this year, the Defendant would give an undertaking until the determination of the appeal not to present a winding-up petition.

7. Having given the matter as much consideration as I could and indeed having spent a great deal of time this morning and this afternoon reading the papers in the matter, I have come to the conclusion that the Judge by no means under-estimated the strength of the case of the Plaintiff in relation to the existence of the arbitration agreement. In my view, the argument that there was an arbitration agreement was tenuous in the extreme.

8. In those circumstances, I consider that the exercise by the Judge of her discretion was on the correct footing, which cannot be faulted. I for one would not interfere with the exercise of that discretion. The Plaintiff has clearly been given an opportunity to provide the security pending this appeal, it is not security pending any arbitration proceedings, it is simply pending this appeal.

9. In those circumstances, I would not accede to this application.