LIN MING AND ANOTHER v. CHEN SHU QUAN AND OTHERS

HCMP 552/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 552 OF 2012

(ON AN INTENDED APPEAL FROM HCA NO. 1900 OF 2011)

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BETWEEN

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J U D G M E N T

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Hon Fok JA (giving the Judgment of the Court):

1.  By his Judgment handed down on 8 March 2012, Deputy High Court Judge P. Ng SC granted a stay of the 1^st plaintiff’s claims against the 27^th and 28^th defendants in this action in favour of an HKIAC arbitration (Case No. HKIAC/A11113) and dismissed a cross-application by the 1^st plaintiff for an injunction restraining the 27^th and 28^th defendants, as well as Gingero Associated SA, from proceeding with and/or taking any further step in that arbitration.

2.  The time for appealing against the refusal of the injunction expired on 22 March 2012.

3.  Although the 1^st plaintiff had been informed by his solicitors on 8 and 14 March 2012 of the time limit for appealing, he did not give instructions to do so until 4.40 pm on 22 March 2012.  As a result, the 1^st plaintiff’s solicitors’ clerk did not arrive at the High Court Registry to file a summons for leave to appeal until about 4.55 pm by which time the relevant division of the Registry was closed for the day.

4.  The 1^st plaintiff now applies to this Court by summons for (i) an extension of time to apply for leave to appeal, and (ii) leave to appeal against the Deputy Judge’s refusal of the injunction.

5.  Since the merits of the appeal are relevant to the question of whether to grant an extension of time to apply for leave to appeal, we shall first consider the merits of the application for leave to appeal.

6.  The 27^th and 28^th defendants’ application for a stay of the claims against them in this action was made under s. 20 of the new Arbitration Ordinance (Cap. 609) which came into effect in September 2011.  That section gives effect to Article 8 of the Model Law.  If the conditions of Article 8 are satisfied, a stay of the legal action in favour of arbitration is mandatory.  As the Deputy Judge noted[1], the case for a stay was straightforward.  Other than the arguments for an injunction, the 1^st plaintiff only advanced one argument against a stay which was that the 1^st plaintiff and 27^th defendant were not parties to the relevant arbitration clause.  The Deputy Judge rejected this argument[2] and this is not the subject of challenge in the intended appeal.  The Deputy Judge considered the conditions of Article 8 to be satisfied so that he was bound to grant the stay application.[3]

7.  As the Deputy Judge then put it:

“35. … if this Court accedes to the Stay Application in favour of HKIAC Arbitration, it would be self-defeating for this Court then to grant an injunction restraining the 27^th and 28^th defendants from proceeding with the HKIAC Arbitration.”

8.  The three grounds of appeal in the proposed notice of appeal repeat the three points[4] made to the Deputy Judge in support of the injunction application. The Deputy Judge duly considered those points but concluded that they did not persuade him that he should grant the injunction.[5]

9.  We do not think that the Deputy Judge wrongly exercised his discretion in relation to the risk of inconsistent findings in the concurrent proceedings (as suggested by the first proposed ground of appeal).  We agree with the reasons given by the Deputy Judge for rejecting that argument.

10.  As for the second proposed ground of appeal, the Deputy Judge did not make a finding that there was no injustice to the 1^st plaintiff by reason of the other defendants not being party to the arbitration.  Instead, he considered that the injustice to the 27^th and 28^th defendants by reason of the injunction would be greater than any injustice to the 1^st plaintiff.  We do not think the proposed appeal against that weighing process in the exercise of the Deputy Judge’s discretion is one which enjoys a reasonable prospect of success.

11.  Finally, as for the third proposed ground of appeal, we are satisfied that the Deputy Judge was entitled to find that the 1^st plaintiff created the situation of concurrent proceedings so that it lay ill in his mouth to complain of oppression arising from that situation.

12.  We do not consider that the 1^st plaintiff has demonstrated an appeal with a reasonable prospect of success and it is not suggested that there is some other reason in the interests of justice why the appeal should be heard.

13.  We therefore dismiss the summons for leave to appeal and, since we consider that the application is totally without merit, we make an order, pursuant to RHC O.59 r.2A(8), that no party may request this determination to be reconsidered at an oral hearing inter partes.

14.  In the circumstances, it is unnecessary to consider separately the application for an extension of time to apply for leave to appeal.

15.  As for costs, these will be borne by the 1^st plaintiff.  We direct that the 27^th and 28^th defendants’ costs in respect of the summons be assessed on a gross sum basis and, to this end, we therefore direct the 27^th and 28^th defendants’ solicitors to submit a bill of costs within seven days hereof and give leave to the 1^st plaintiff to submit his response within seven days thereafter.