ARMADA (SINGAPORE) PTE LTD (UNDER JUDICIAL MANAGEMENT) v. GRAND CHINA LOGISTICS HOLDING (GROUP) CO., LTD

HCCW 130/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 130 OF 2013

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D E C I S I O N

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1.  On 14 May 2013, Armada (Singapore) Pte Limited, which is a Singaporean company under judicial management, issued a petition to wind up Grand China Logistics Holdings (Group) Co., Ltd (“the company”). The company is incorporated under the laws of the People’s Republic of China. The petition states in paragraph 1 that the company is an unregistered company within the meaning of section 326 of the Companies Ordinance, Cap 32.

2.  The petition is to wind up the company on the grounds of insolvency.  A statutory demand is relied upon which was, it is alleged in paragraph 5 of the petition, served on the company at its registered office in Shanghai.  The debt allegedly arises from an arbitration award for US$5,106,083.75 plus interest.  The petition makes no reference to there being any connection between the company and Hong Kong.

3.  An application for leave to serve the petition out of the jurisdiction was made to Master H Au-Yeung.  The application was made under Order 11, Rule 1(1)(n), namely the claim is brought to enforce a judgment or an arbitral award.  Mr Kwong, who appeared for the petitioner on the first hearing of an application to strike out the petition, accepts that that ground was not applicable.  A winding-up petition is not a means of enforcing a judgment or an arbitral award.  In the case of a petition based on the grounds of insolvency, it is an application by a creditor of a company to commence the winding-up process provided for by the Companies Ordinance, and the creditor is effectively exercising a class right when issuing such a petition.

4.  It follows that leave should not have been granted on that basis for service of the petition in Shanghai.  I assume that the Master’s attention was not brought to my various relevant judgment, including Re Gottinghen Trading Limited [2012] 3 HKLRD 453, where I deal with the question of applications for leave to serve petitions out of the jurisdiction.  Neither, I assume, was it explained to the Master that decisions such as Re Yung Kee Holdings Limited [2012] 6 HKC 246.  October 2012 or Pioneer Iron and Steel Group Company Limited HCCW 322 of 2010 6 March 2013 explained comprehensively that the jurisdiction to wind up a foreign company is an exorbitant one and is only exercised where it is clearly demonstrated that there is sufficient connection between the company and Hong Kong.  It is not necessary for me to discuss those authorities and the principles set out in them in detail in this judgment.

5.  As I have already mentioned, the petition itself does not make any reference to a connection between the company and Hong Kong.  As is clearly established by authorities such as Re Fildes Bros Ltd [1970] 1 ALL ER 923 in determining an application to strike out a petition or determining a petition itself, regard should only be had by the court to the averments contained in the petition itself.  As there is no averment at all purporting to demonstrate a connection between the company and Hong Kong, it necessarily follows that the petition is demurrable and is liable to be struck out.

6.  Mr Kwong sought leave to remedy these problems by amending the petition and making a new application for leave to serve the amended petition out of the jurisdiction.

7.  In my view, the mistakes that have been made in relation to the drafting of the petition itself and the application for leave to serve out of the jurisdiction are so fundamental and so inexcusable, given the current state of the authorities, that it is not appropriate to proceed on this basis, and I make an order striking out the petition.  I hope that in future solicitors making applications for leave to serve petitions of this sort out of the jurisdiction will make sure that their applications are properly thought through and properly formulated, and that the Master is provided with all relevant authorities.

8.  It follows that I will also order that the costs of the strike‑out application and the petition proceedings are paid by the petitioner to the company.