DP WORLD DJIBOUTI FZCO AND OTHERS v. CHINA MERCHANTS PORT HOLDINGS COMPANY LTD

HCA 1951/2018

[2025] HKCFI 6320

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1951 OF 2018

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BETWEEN

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D E C I S I O N

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Introduction

1.  This is an action brought by the three Plaintiffs against the Defendant (“CMPH/Defendant”), claiming that CMPH had procured the breach by the Djibouti Republic of the exclusive rights of the 2^nd Plaintiff (“DID”) and of the 3^rd Plaintiff (“DCT”) to operate and manage the ports in Djibouti pursuant to their concession agreements made with the Republic of Djibouti.

2.  By its summons issued on 28 February 2023, the Defendant seeks to strike out the claims made by DCT, on the ground that it no longer has the legal capacity to continue or pursue the action which had initially been commenced by lawyers instructed by DCT’s board of directors, whose powers have now been ousted and replaced by officials appointed by the Djibouti Court, and as a result of DCT having ultimately been dissolved by order of the Djibouti Court.

3.  The dispute between the parties has now centered on 3 summonses which are before the Court (“Summonses”):

(1) CMPH’s summons dated 28 February 2023 (amended on 16 April 2024) (“Authority Summons”) for:

i. an order that the name of DCT as the 3^rd Plaintiff and its claims in these proceedings be struck out, on the ground that these proceedings were brought or continued without proper authority; or

ii. alternatively, an order that there be a trial of preliminary issue on whether DCT’s action was issued and the subsequent proceedings were conducted by Deacons with the proper authority of DCT (“Authority Issue”), and a stay of these proceedings pending the trial of preliminary issue.

(2) DCT’s summons[1] dated 25 July 2023 for an anti-suit injunction against CMPH (“1^st ASI Summons”):

i. restraining CMPH from taking steps to pursue the proceedings commenced by CMPH against the Plaintiffs (“1^st Djibouti Action”) by way of the “Summons to Appear before the President of the Court of First Instance of Djibouti” dated 12 July 2023 (“Djibouti Summons”) in the Court of First Instance of Djibouti (“Djibouti CFI”);

ii. restraining CMPH from commencing any other legal proceedings in respect of the Authority Issue; and

iii. ordering CMPH to withdraw the Djibouti Summons.

(3) DCT’s summons dated 24 November 2023 (“2^nd ASI Summons”) seeking anti-suit relief against CMPH:

i. restraining CMPH from taking any steps in the proceedings commenced by CMPH in the Djibouti CFI by way of the “Writ of Summons for Proceedings on the Merits” in case no 212/23 (“2^nd Djibouti Action”) pending the final determination of these proceedings; and

ii. ordering CMPH to apply to the Djibouti CFI to withdraw (or stay pending the determination of these proceedings) the 2^nd Djibouti Action.

4.  The hearings of these summonses were adjourned several times, for reasons explained below. Eventually, substantive submissions were made by the parties and heard on 4, 6 and 7 August 2025. I reserved my judgment at the conclusion of the hearing, and this is my decision.

Background

5.  The background facts are not in dispute and have been set out in my judgment dated 20 December 2019 on CMPH’s application to stay this action on the ground of forum non conveniens (“Stay Decision”). The parties have helpfully produced an Agreed Chronology. These background facts will not be further repeated here. Those material to this decision will only be summarised below, adoping the definitions used in the Stay Decision and the Agreed Chronology.

6.  Given the numerous intertwining applications and foreign proceedings, the narrative below does not necessarily set out the events in chronological order. All definitions adopted herein are for convenience only and without prejudice to the parties’ arguments.

Articles Proceedings

7.  On 20 September 2018, the Republic commenced proceedings in the Djibouti Court seeking to: (i) invalidate certain provisions in DCT’s Articles relating to the voting rights of directors and shareholders and the constitution of the board; and (ii) annul the 18 February 2018 Resolution (pursuant to which the Termination Arbitration and this Action were commenced) (“18 February 2018 Resolution”), on the ground that they were contrary to Djibouti public policy (“Articles Proceedings”).

8.  On 23 October 2018, DPWD intervened in the Articles Proceedings and objected to the Djibouti CFI’s jurisdiction over the dispute.

9.  On 29 January 2019, the Djibouti CFI allowed DPWD’s intervention but dismissed DPWD’s jurisdiction objection, deciding that the proceedings should proceed on the merits.

10.  On 28 February 2019, DPWD appealed to the Djibouti Court of Appeal (“Djibouti CA”) in respect of its jurisdiction challenge in the Articles Proceedings. This appeal was dismissed by the Djibouti CA on 22 May 2019.

11.  On 2 October 2022, DPWD’s further appeal from the Djibouti CA Decision to the Djibouti Supreme Court was dismissed.

12.  Pending decision by the Djibouti Supreme Court on DPWD’s jurisdictional challenge, the hearing on the merits of the Articles Proceedings proceeded.

13.  On 31 December 2019, the Djibouti CFI held, inter alia, that Article 42A of DCT’s Articles was null and void on the ground of public policy, and that the 18 February 2018 Resolution was also null, since they amount to performance of an unlawful agreement, being the invalidated articles (“Djibouti CFI Articles Judgment”). In the Djibouti CFI Articles Judgment, it was held, inter alia, that:

(1) The articles concerning the composition of DCT’s board should be invalidated;

(2) The articles concerning the removal of directors, the appointment / removal of the chairman, the appointment of the CEO and directors, and provisions governing the directors’ and shareholders’ voting rights (ie Articles 21.5, 42A[2]) were contrary to the mandatory provisions of the Djibouti Commercial Code, and should be “deemed unwritten”; and

(3) The 18 February 2018 Resolution, which authorized the commencement of the Articles Arbitration and the present Action, was declared null and void since the passing of this resolution amounted to performance of an unlawful agreement (ie the invalidated articles).

14.  On 11 October 2023, the Djibouti CA upheld the Djibouti CFI’s decision on the merits in the Articles Proceedings (“Djibouti CA Articles Judgment”). The Djibouti CA declared that DPDW’s appeal was lodged “out of time”, upheld the Djibouti CFI Articles Judgment, and dismissed the “unfounded grounds” of appeal raised by DPDW. The Plaintiffs contend that there was no reasoning, in this 2-page judgment, as to why or how DPDW’s grounds of appeal were “unfounded”.

15.  On 20 December 2023, DPWD lodged an appeal to the Djibouti Supreme Court against Djibouti CA’s decision dated 11 October 2023. As at the date of the hearing before this Court in August 2025, the Djibouti Supreme Court had not handed down its decision on the appeal.

Administrator Proceedings

16.  On 26 September 2018, the Republic applied under an “emergency procedure” to the Djibouti CFI for the appointment of a provisional administrator for DCT. This application was made without notice to DCT or DPWD, its shareholder (“Administrator Proceedings”). On the next day, the Djibouti CFI granted an ex parte order appointing Ms Chantal Tadoral as the provisional administrator of DCT (“Administrator”), on the ground that there were conflicts between the shareholders (ie PDSA and DPWD) that would hinder DCT’s effective operation (“Appointment Order”). The Administrator was to replace DCT’s board until the “crisis” between the shareholders was resolved.

17.  On 4 October 2018, DCT’s board lodged a challenge to the appointment of the Administrator before the Djibouti CFI. This challenge was dismissed by the Djibouti CFI on 15 November 2018.

18.  DCT’s board appealed against the Djibouti CFI’s decision on 21 November 2018. The appeal was heard by the Djibouti CA on 17 December 2018, and dismissed on 3 January 2019,

19.  On the same day, DCT further appealed to the Djibouti Supreme Court. Also on the same day, the Administrator’s Stay Application[3] in the Rescission Arbitration was dismissed on the grounds that (i) the arbitration had proceeded without challenge from the Republic or the Administrator, and (ii) no further participation by either side was required before the tribunal delivers its award.

20.  On 8 September 2019, DCT’s appeal to the Djibouti Supreme Court was dismissed by the Preliminary Examination Division, on the basis that the pleadings therein were filed out of time. There was no consideration of the merits of the appeal.

21.  On 14 October 2019, DCT’s board applied to reopen the proceedings before the Plenary Assembly of the Djibouti Supreme Court, for the Assembly to review the decision of 8 September 2019. Such application was dismissed on 27 February 2020.

22.  On 3 June 2020, DPWD commenced fresh proceedings in the Djibouti CFI to challenge the appointment of the Administrator on the merits (“New Administrator Proceedings”).

23.  In the meantime, the Administrator indicated her opposition to the DPWD-nominated Directors’ representation of DCT in the pursuit of these proceedings. By letter dated 26 August 2020 (“26 Aug 2020 Letter”), the Administrator wrote to CMPH’s former solicitors, Baker & McKenzie, stating that none of the directors of DCT’s board (including Albanna) and the purported legal representatives of DCT (including Deacons) was authorized to represent or to give instructions on behalf of DCT in this Action, nor had any approval been sought from the Administrator. The Administrator stated, however, that since it was not her task to make any decisions which might give rise to considerable costs being incurred by DCT and which might be assimilated to a “disposal”, she was of the opinion that her intervention in the ongoing proceedings in Hong Kong was not desirable.

24.  On 23 February 2022, the Djibouti CFI dismissed DPWD’s challenge in the New Administrator Proceedings. DPWD appealed, and the Republic cross-appealed, to the Djibouti CA.

25.  On 19 March 2025, more than 3 years later, the Djibouti CA handed down its judgment dismissing DPWD’s appeal in the New Administrator Proceedings. The reasoned decision was handed down on 3 April 2025. On 2 April 2025, DPWD filed an appeal to the Djibouti Supreme Court against the Djibouti CA’s decision of 19 March 2025.

Authority Summons

26.  On 28 February 2023, CMPH took out the Authority Summons. In essence, CMPH challenges the authority of Deacons to act for DCT in the present Action, on the basis that DCT had been placed in provisional administration by the Djibouti Court, and that accordingly, the board of DCT (who instructed Deacons in this Action) had been displaced by the Administrator.

1^st Djibouti Action and 1^st ASI Summons

27.  The procedural history in the paragraphs below are relevant to the 1^st and 2^nd ASI.

28.  On 31 May 2023, Albanna (on behalf of DPWD) gave notice (“1^st EGM Notice”) to PDSA (as shareholder) of an EGM of DCT scheduled for 22 June 2023 (“Initial EGM”). The stated purposes of the EGM was to pass a shareholders’ resolution to confirm the appointment and continuation of Deacons as DCT’s legal representative in this Action (“Proposed Resolution”).

29.  On 22 June 2023, the Initial EGM took place. PDSA was absent. It is CMPH’s contention that the Initial EGM was inquorate. In any event, no resolution was passed at the Initial EGM.

30.  On 23 June 2023, DPWD sent to PDSA a further notice (“2^nd EGM Notice”) of an EGM of DCT scheduled for 17 July 2023 (“Reconvened EGM”), for the purposes of passing the Proposed Resolution.

31.  It is CMPH’s case that it only became aware of the 1^st EGM Notice in early June 2023, and of the 2^nd EGM notice in late June 2023.

32.  On 12 July 2023, CMPH applied without notice to the Djibouti Court for interim relief against DPWD, the DPWD-nominated Directors, and DCT in the 1^st Djibouti Action. This was by way of the Djibouti Summons. It is CMPH’s case that the attempt to convene the Initial EGM and the Reconvened EGM and to pass the Purported Resolution constituted the tort of manifestly unlawful disturbance under Djibouti law. By the Djibouti Summons, CMPH sought interim measures requiring the DPWD-nominated Directors to, inter alia, immediately cease representing DCT and giving further instructions to Deacons. CMPH further sought measures restraining DPWD from relying upon any resolution purportedly passed to confirm or ratify Deacons’ authority to sue in this Action. The Djibouti Summons was returnable the next day, on 13 July 2023 at 10am, which required the respondents therein (ie DPWD and the DPWD-nominated Directors) to appear before the Djibouti CFI.

33.  According to CMPH, service on a respondent outside jurisdiction is effected through the Public Prosecutor’s office (“Office”) under Djibouti law. On CMPH’s case, due service was effected on 12 July 2023, once the writ had been served on the Office. However, the Plaintiffs dispute that there was due service of the Djibouti Summons.

34.  On 13 July 2023, the Djibouti CFI held its first hearing of the Djibouti Summons. DPWD and the DPWD-nominated Directors did not attend the hearing.

35.  On 16 July 2023 (ie 1 day before the Reconvened EGM), Albanna received an email from a Ms Mariam Burton of a Djibouti law firm representing CMPH Cabinet Avocats & Associes ABAYAZID et ABDOURAHMAN (“CAA”), which was stated to be only “for information purposes”, and which attached the Djibouti Summons. The sending and receipt of this email is undisputed.

36.  On 17 July 2023, the Reconvened EGM took place in the absence of PDSA, at which the Proposed Resolution was passed.

37.  On 25 July 2023, the Plaintiffs took out the 1^st ASI Summons in this action, to restrain the continuation of the Djibouti Summons.

38.  On 28 July 2023, DHCJ MK Liu granted an interim-interim injunction in these proceedings, restraining CMPH from (i) taking any steps to pursue and/or prosecute the proceedings commenced by the Djibouti Summons and (ii) commencing any other legal proceedings (in Djibouti or elsewhere), in respect of the issue of whether the proceedings herein were instituted without the authority of DCT (“28 July HK Order”).

39.  In the interim, the Djibouti Summons had been adjourned to 27 July 2023. On 31 July 2023, the Djibouti CFI granted an order in the absence of any of the Defendants, allowing the claims in the Djibouti Summons. These included an order that the DPWD-nominated Directors should cease to represent DCT in this Action, and should cease to give further instructions to Deacons and other law firms on behalf of DCT (“Djibouti Interim Decision”).

40.  It is common ground between the parties that the 1^st ASI Summons has been rendered academic as a result of the Djibouti Interim Decision. Paragraphs 1(1)(i) and 1(2) of the 1^st ASI Summons are rendered unnecessary as the 1^st Djibouti Action had come to an end. Paragraph 1(1)(iii) had been subsumed and overtaken by the 2^nd ASI Summons as a result of the commencement of the 2^nd Djibouti Action. The only outstanding issue concerning the 1^st ASI Summons is on costs.

2^nd Djibouti Action and 2^nd ASI Summons

41.  On 19 July 2023, CMPH instructed its Djibouti lawyer, Mr Mohamed Abayazid (“Abayazid”) of CAA, to prepare for the commencement of the 2^nd Djibouti Action. According to CMPH, the 2^nd Djibouti Action was a protective writ to preserve the claim for damages which did not form part of the interim measures sought in the Djibouti Summons, and which might otherwise have become time-barred under Djibouti law. On CMPH’s case, the Djibouti Summons could not encompass a request for compensation against DCT, DPWD, and the DPWD-nominated Directors.

42.  On 27 July 2023, CMPH instructed a bailiff (“Bailiff”) to commence the 2^nd Djibouti Action. On CMPH”s case (which is disputed by the Plaintiffs), this was done by arranging for service of the proceedings on the defendants (ie DCT, DPWD, and the DPWD-nominated Directors) and for filing of the papers with the Court Registry thereafter. The commencement date of the 2^nd Djibouti Action is disputed.

43.  According to CMPH, the 28 July HK Order was only brought to CAA’s attention on 29 July 2023, and CAA had refrained from taking any further steps in the 2^nd Djibouti Action.

44.  On 1 August 2023, the Writ of Summons for the 2^nd Djibouti Action was filed by the Bailiff with the Djibouti Court’s Registry. The Plaintiffs contend that the 2^nd Djibouti Action commenced on this date was in breach of the 28 July HK Order.

45.  On 4 August 2023, DHCJ MK Liu ordered continuation of the 28 July HK Order until the final determination of the 1^st ASI Summons or until further order of the Court.

46.  On 19 September 2023, the first hearing of the 2^nd Djibouti Action took place. CMPH did not attend the hearing. According to DPWD, its attorney discovered the 2^nd Djibouti Action from the docket of the Djibouti CFI.

47.  On 21 September 2023, Deacons wrote to Reed Smith Richards Butler LLP (“RSRB”) with reference to the 2^nd Djibouti Action, stating that they had reason to believe that CMPH had acted in breach of the 28 July HK Order and requested more information relating to the 2^nd Djibouti Action. On 28 September 2023, RSRB wrote to Deacons in reply, denying that CMPH was in breach of the 28 July HK Order.

48.  On 24 October 2023, Deacons wrote to RSRB reiterating that CMPH was in breach of the 28 July HK Order and stating that their clients intend to apply for leave to amend the 1^st ASI Summons in light of the developments (such that the injunction captures both 1^st and 2^nd Djibouti Actions). On 20 November 2023, RSRB provided a substantive response to Deacons’ letter dated 24 October 2023, denying breach of 28 July HK Order or that it had provided false or misleading evidence.

49.  On 24 November 2023, DPWD and DCT applied for the 2^nd ASI Summons, a further anti-suit injunction against CMPH, inter alia, restraining it from pursuing the 2^nd Djibouti Action and compelling it to withdraw or apply for a stay of the same.

50.  On 1 December 2023, at the first hearing of the 2^nd ASI Summons before Recorder Eugene Fung SC, CMPH gave an undertaking to the effect that it shall forthwith apply to the Djibouti CFI for a stay of the 2^nd Djibouti Action and, should the stay be refused, it shall not rely on or refer to any judgment of the Djibouti Court arising from the 2^nd Djibouti Action for the purpose of the hearing on 16 and 17 April 2024 before this Court (“Undertaking”). Accordingly, no interim-interim injunction was granted.

51.  On 5 December 2023, CAA orally applied to the Djibouti CFI for a stay of the 2^nd Djibouti Action.

52.  On 30 April 2024, the President of the Civil Chamber of the Djibouti CFI orally requested CMPH’s application for stay of the 2^nd Djibouti Action to be made in writing. Such a written request was made by CMPH on 7 May 2024, through its counsel in Djibouti.

53.  Eventually on 16 May 2024, CAA received a copy of the decision from the Djibouti CFI dated 14 May 2024 granting the stay application made on 5 December 2023. It is not clear why it took almost half a year for the Djibouti Court to indicate its request for stay to be made in writing and for the stay to be granted, while the Djibouti Dissolution Proceedings (defined below) was underway.

Djibouti Dissolution Proceedings

54.  The history set out below is relevant to the Authority Summons.

55.  On 16 October 2023, the Administrator (on behalf of DCT) issued a summons against DPWD and the Republic, returnable before the Djibouti CFI on 20 December 2023, seeking a declaration that DCT be dissolved and a liquidator be appointed (“Dissolution Proceedings”). The Plaintiffs disagree that the Administrator was acting on behalf of DCT. They also claim that neither DCT's directors nor controlling shareholder (DPWD) were served with or notified of the hearing of the summons for the Dissolution.

56.  On 20 December 2023, at the hearing of the Djibouti Dissolution Proceedings, the Djibouti CFI delivered an oral judgment declaring the dissolution of DCT and appointing Mr Youssouf Omar Youssouf (“Liquidator”) as the liquidator of DCT (“Djibouti Dissolution Judgment”). The Plaintiffs claim that they were not represented at the hearing.

57.  On CMPH’s case, the Djibouti Dissolution Judgment was served on and transmitted to DPWD via transmission from the Djibouti Ministry of Justice to Mr Sajid of the Ministry of Foreign Affairs of UAE via the Djibouti Ministry of Foreign Affairs and the Djibouti Embassy in Abu Dhabi, UAE (“Djibouti Embassy”) between 27 December 2023 to 30 January 2024. The parties dispute the effective date of service of the Djibouti Dissolution Judgment on DPWD, and whether Mr Sajid (who signed to acknowledge service of the Judgment) was indeed a representative of the Ministry of Foreign Affairs of UAE.

58.  On 28 March 2024, the Registry of Court of Appeal issued a Certificate of Non-Appeal (“Certificate of Non-Appeal”) confirming that the Djibouti Dissolution Judgment was served on DPWD on 27 December 2023, and certifying that no appeal was lodged by DPWD within time pursuant to the Djibouti Civil Procedure Code. On the same day, the Djibouti Dissolution Judgment was re-issued in an enforceable form (grosse exécutoire).

59.  On 5 April 2024 and 14 April 2024, notice of DCT’s dissolution and the appointment of the Liquidator was published in La Nation, Djibouti’s legal gazette, and in DCT’s records maintained with the Djiboutian Registry of Commerce respectively.

60.  On 24 April 2024, DPWD brought an appeal against the dissolution before the Djibouti CA (“Djibouti Dissolution Appeal”).

61.  Hearings of the Djibouti Dissolution Appeal took place on 22 May 2024, 16 June 2024, 18 September 2024, 16 October 2024, 20 November 2024, 22 January 2025, 5 February 2025 and 26 February 2025.

(1) At the hearing on 16 June 2024, the Dissolution Appeal was adjourned to 18 September 2024 for “contradictoire” (to allow time for parties and their local counsel to be properly constituted).

(2) DCT and the Republic filed submissions on 18 September 2024 and 13 October 2024 respectively.

(3) On 15 October 2024, Lamisse Mohamed Saïd was appointed as the Public Prosecutor (“Public Prosecutor”) in office before the Djibouti CA.

(4) On 16 October 2024, the hearing was adjourned for submissions from DPWD.

(5) On 20 November 2024, DCT (acting through the Administrator) filed additional submissions. The hearing was adjourned to 11 December 2024 for reply submissions.

(6) On 11 December 2024, DPWD filed written submissions. The Republic and DCT stated that they did not intend to file additional submissions and Djibouti CA decided to “close” the proceedings and to deliver its judgment on 15 January 2025.

(7) On 18 December 2024, DPWD sent a letter to the Djibouti CA objecting to the procedural order made on 11 December 2024 and seeking an oral hearing.

(8) On 15 January 2025, Me Camille Kamil (DPWD’s Djibouti lawyer) (“Kamil”) did not file any submission for DPWD but requested an adjournment, referring to the letter dated 18 December 2024. The Djibouti CA reopened the proceedings under the Djibouti Dissolution Appeal and adjourned the case to a hearing on 22 January 2025.

(9) On 22 January 2025, the Djibouti CA reconvened and ordered oral submissions to be made by Kamil for DPWD. He objected and stated that he had no instructions to deliver oral arguments. The Djibouti CA “closed” the proceedings and stated it would deliver its judgment on 5 February 2025.

(10) On 5 February 2025, the Djibouti CA reconvened and reopened the case to allow the Public Prosecutor to intervene and make submissions.

(11) On 12 February 2025, the Public Prosecutor filed submissions. The Public Prosecutor’s submissions included submissions on service and adopted 27 December 2023 as the date of service of the Djibouti Dissolution Judgment. Kamil of DPWD asked for an adjournment to file reply submissions for DPWD which was granted.

(12) On 19 February 2025, DPWD filed submissions in reply to the Public Prosecutor’s submissions and requested an adjournment for one month. The Djibouti CA adjourned the case to 26 February 2025.

(13) On 24 February 2025, the Public Prosecutor submitted an “Exhibits List” to the Djibouti CA (without accompanying submissions). The “Exhibits List” constitute further evidence submitted by the Public Prosecutor containing, inter alia, letters from the Djibouti Embassy to the UAE Ministry of Foreign Affairs and from the Djibouti Embassy to the Djibouti Ministry of Foreign Affairs.

(14) According to the Plaintiffs, on 25 February 2025, Kamil received the docket which showed that the hearing of the Djibouti Dissolution Appeal scheduled for the next day was for written and possibly oral submissions, and not for decision.

62.  The parties disagree as to what happened at the hearing on 26 February 2025. CMPH's case is based on what it had been informed by third parties in Djibouti, and the Plaintiffs maintain that only they had first hand information on the events of the Djibouti proceedings, as DPWD was the actual party involved.

(1) CMPH’s case is that Kamil presented oral arguments before the Djibouti CA. The Public Prosecutor only referred to his oral submissions. Kamil did not request for any further adjournment to deal with the “Exhibits List” and the alleged new evidence filed by the Public Prosecutor. The Djibouti CA then withdrew for deliberation and thereafter, handed down its decision, dismissing DPWD”s appeal against the Djibouti Dissolution Judgment.

(2) The Plaintiffs’ case is that Kamil opposed the way the Djibouti CA had managed the proceedings since 11 December 2024. No adversarial debate took place on the “Exhibits List” submitted by the Public Prosecutor. The Republic and DCT (acting through the Administrator) did not attend the hearing. The Public Prosecutor only referred to his written submissions which pre-dated the “Exhibits List”.

63.  On 27 February 2025, the full judgment of the Djibouti Dissolution Appeal (“Djibouti CA Dissolution Judgment”) was made available. The Djibouti CA declared the appeal to be inadmissible for being out of time. It considered that the Djibouti Dissolution Judgment was served on 23 January 2024, and that the Djibouti Dissolution Appeal filed on 24 April 2024 was more than 3 months from such service.

Hearing of the Amended Authority Summons, 1^st ASI Summons and 2^nd ASI Summons

64.  On 11 March 2024, following the Djibouti Dissolution Judgment dated 20 December 2023, CMPH applied to amend the Authority Summons to include the further ground that DCT’s board had been displaced by the Liquidator (“Amended Authority Summons”). At the hearing of the Amended Authority Summons, 1^st ASI Summons and 2^nd ASI Summons (“Summonses”) on 16 April 2024, I allowed the amendment application and directed that parties may adduce evidence concerning the new ground. I also adjourned the hearing of the Summonses to a date to be fixed. The adjourned hearing was subsequently rescheduled for 3 March 2025.

65.  Given that the Djibouti CA Dissolution Judgment was only handed down shortly before the adjourned hearing on 3 March 2025, and the parties considered that the outcome and the manner of handling of the Djibouti Dissolution Appeal was relevant to the Summonses before this Court, both parties sought leave to adduce additional evidence. In the end, this Court further adjourned the hearing of the Summonses, and granted leave for the following affidavits to be filed:

(1) the 8^th Affidavit of Isabelle Michou (“Michou 8”), for DPWD and DCT;

(2) the affidavit of Aurelie Lopez (“Lopez 1”) and the 7^th affirmation of Mohamed Abayazid (“Abayazid 7”), for CMPH;

(3) the 9^th affidavit of Isabelle Michou (“Michou 9”), for DPWD and DCT;

(4) the 2^nd affidavit of Aurelie Lopez (“Lopez 2”), the 8^th affirmation of Mohamed Abayazid (“Abayazid 8”) and the 9^th expert opinion of Mrs Fatouma Mahamoud (“Fatouma 9”), for CMPH.

Submissions

66.  Both parties agree that the Amended Authority Summons should be heard first, before the ASI Summonses. If the Court decides in favour of CMPH on the Amended Authority Summons, the ASI Summonses might become academic.

67.  On the Amended Authority Summons, it is CMPH’s case that any one of the following 3 grounds would be sufficient to strike out the Plaintiffs’ claims on the ground of want of authority:

(1) The 18 February 2018 Resolution has been declared null and void by the judgment of the Djibouti Court in the Articles Proceedings (“Resolution Nullity Ground”). The Djibouti CA Articles Judgment is effective and enforceable. There is no dispute by the Plaintiffs that there is no stay of the Djibouti CA Articles Judgment, notwithstanding the further appeal to the Djibouti Supreme Court;

(2) Upon the appointment of the Administrator over DCT by the Appointment Order dated 27 September 2018, the authority of the DPWD-nominated Directors to act on behalf of DCT in the present Action has been divested, and therefore Deacons’ authority to act on behalf of DCT was automatically terminated (“Administrator Ground”); and/or

(3) By the Dissolution Judgment dated 20 December 2023, DCT was dissolved and the Liquidator was appointed. This confirmed that the DPWD-nominated Directors (and Deacons who act on the instructions of the DPWD-nominated Directors) have no authority to act on behalf of DCT (“Dissolution Ground”).

68.  The Plaintiffs’ response is as follows:

(1) On the Resolution Nullity Ground: The Djibouti CFI Articles Judgment and the Djibouti CA Articles Judgment are not binding on this Court and do not preclude this Court from finding that the 18 February 2018 Resolution was valid. The Djibouti CFI Articles Judgment and the Djibouti CA Articles Judgment are plainly wrong.

(2) On the Administrator Ground: The Appointment Order should not be recognized on the grounds that it is contrary to the public policy of Hong Kong and against principles of natural justice. Even if recognition is given to the Appointment Order, the appointment of the Administrator in and of itself does not put an end to Deacons’ authority to represent DCT, given that the Administrator has taken no action to intervene in these proceedings. In any event, the authority of Deacons was confirmed by the Proposed Resolution passed on 17 July 2023 at the Reconvened EGM (“July 2023 Resolution”).

(3) On the Dissolution Ground: The Djibouti Dissolution Judgment was suspended pending appeal,[4] and in any event, should not be recognized on the grounds that it is contrary to the public policy of Hong Kong and against principles of natural justice. Further, even if recognition of the Djibouti Dissolution Judgment is given by this Court, the dissolution of DCT does not in and of itself put an end to Deacons’ authority to represent DCT given that no liquidator appears to be actively attempting to exercise control over DCT and/or to intervene in these proceedings.

69.  As a result of the adjournment caused by the Djibouti CA Dissolution Judgment, the parties have filed further submissions, which supplemented their respective positions on the Dissolution Ground.

(1) The Plaintiffs’ primary argument is that, the Djibouti CA Dissolution Judgment was based on the new evidence filed by the Public Prosecutor just two days prior to the hearing before the Djibouti CA, the Plaintiffs did not have the opportunity to address the new evidence, and the Djibouti CA Dissolution Judgment was rendered in highly irregular and unusual circumstances, such that the decision made by the Djibouti CA, that the Djibouti Dissolution Appeal was “inadmissible” for being out of time, was wholly without basis and was perverse. Therefore, this Court should not give recognition to the Djibouti CA Dissolution Judgment, as it involved breaches of the principles of natural justice and there is evidence of bias and/or lack of good faith on the part of the Djibouti CA.

(2) On CMPH’s part, it was submitted that there is no ground to impeach the Djibouti CA Dissolution Judgment. DPWD had been given sufficient opportunity to present its case, including on whether the appeal was out of time. The significance of the new “Exhibits List” was overplayed and DPWD did not seek any adjournment to deal with it. DPWD also failed to exhaust the available remedy of appealing to the Djibouti Supreme Court, and therefore cannot complain about breach of natural justice.

Applicable legal principles

70.  All the 3 grounds relied upon by CMPH in support of its Amended Authority Summons involve the question of whether the Hong Kong Court should recognize the judgments of the Djibouti Courts issued in the Articles Proceedings, the Administrator Proceedings and the Dissolution Proceedings. In summary, CMPH contends that if the Hong Kong Court gives recognition to any of these judgments, it would mean that DCT and Deacons can no longer pursue DCT’s claims in the action for want of authority.

71.  The applicable legal principles in this regard are not in serious dispute between the parties. As summarized by Counsel for the Plaintiffs, they are:

(1) While a foreign judgment may not be impeached in Hong Kong on merits, it may be impeached if:

(i) it offends against the Hong Kong Court’s views of “substantial justice”, such as where the proceedings in which the judgment was obtained were opposed to “natural justice” (Qu Jian Qin v Hu Jing [2020] HKCFI 2788 at para 21; Dicey, Morris & Collins on the Conflict of Laws (16^th Edition), para 14-R-158, 14-159); or

(ii) it is “so wrong as to be evidence of bias, or [is] such that no court acting in good faith could have arrived at it”: Maximov v Open Joint Stock Co ‘Novolipetsky Metallurgichesky Kombinat’ [2017] 2 CLC 121, at para 15.

(2) These principles apply to judgments in personam as much as they apply to judgments in rem. It is important to appreciate that “choice of law” is a separate question from “recognition of foreign judgments”. Thus, even where a person’s status is derived from a foreign judgment (applying foreign law), the English Court applies its rule on recognition of foreign judgments to determine whether that status should be recognized, and does not simply accept without more the position under the relevant foreign law: see Koza Ltd v Koza Altin Isletmeleri AS [2022] EWCA Civ 1284 at para 59,139, 140, 144.

(3) While considerations of international comity will militate against any finding that a foreign court or foreign court system is corrupt or lacking in independence in the absence of cogent evidence, the true position is that there is no rule that the English Court will not examine questions of this nature: see Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Limited [2012] 1 WLR 1804 at para 101.

72.  The Plaintiffs have further made reference to various authorities to illustrate the meaning of “natural justice” (or “substantial justice”). These are:

(1) As explained by Atkins LJ in Jacobson v Frachon (1927) 138 LT 386, at 392, natural justice encompasses two key requirements, namely (i) notice is given to the litigant that the court is about to proceed to determine the rights between him and the other litigant and (ii) having given him that notice, the litigant is afforded an opportunity of substantially presenting his case before the court.

(2) In Adams v Cape Industries Plc [1990] 1 Ch 433 the English Court of Appeal clarified that the defence of breach of natural justice is not restricted to the two situations identified by Atkins LJ. The Court referred to the test stated by Lindley MR in Pemberton v Hughes [1899] 1 Ch 781, 790, and explained the key question as being “whether the procedural defect alleged by [the party resisting enforcement of the foreign judgment] was such as to constitute a breach of an English court’s views of substantial justice”.

(3) Where there is evidence of a “perverse” refusal by the foreign court to apply the law in a judicial manner, it may be possible to oppose recognition on the ground that the behavior of the court infringed natural justice: see OJSC Bank of Moscow v Chernyakov [2016] EWHC 2583 (Comm) at para 7.

73.  In the context of the present case which involves an application to strike out for want of authority to sue, relevant principles are also set out in Kammy Town Limited v Super Glory Corporation Limited HCA 3524/2003, 14 January 2005 (at paras 9 to 22). They are summarized by Counsel for CMPH as follows:

(1) A point on lack of authority must be taken out by a defendant at the earliest opportunity.

(2) The burden lies with those suing in the name of the plaintiff to prove authorization.

(3) The authority issue cannot be raised by way of defence at trial. It must be definitively determined at the outset. The matter should not be left to be determined at trial together with the substantive issues between the parties, since the determination of the latter would become a total waste of time and resources if the point on lack of authority is upheld.

(4) The “plain and obvious” requirement does not apply to striking out on the basis of lack of authority to sue.

(5) A court faced with an application for striking out on the ground of want of authority to sue can either (a) decide the issue summarily on affidavit; or (b) particularly where there are serious factual disputes, adjourn the application to a trial of preliminary issue.

74.  On behalf of CMPH, Counsel has further highlighted the relevant principles concerning the constitution and internal management of a company. Of pertinence, all matters concerning the constitution of a corporation are governed by the law of the place of incorporation: Dicey, Morris & Collins on The Conflict of Laws (16^th edition) para 30R-020. As pointed out in the Stay Decision (at paras 102-103) the English courts have been reluctant to intervene in domestic issues between members of a foreign corporation: Dicey para 30-029; Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] AC 853, 919G, 939A, 972E; Re China Properties Group Limited (HCCW 67/2022, 29.2.2024) para 28.

75.  The arguments made by Counsel for the Plaintiffs in this case against the judgments of the Djibouti Courts are premised also on the fact that the prior judgments of another court are not admissible as evidence of facts or conclusions found between different parties (Secretary of State for Trade & Industry v Bairstow [2004] Ch 1 (at paras 26-27); Capital Century v Li Dianxiao [2018] HKCFI 729 at para 23). For res judicata to apply, any prior judicial decision relied on must: (1) be pronounced by a tribunal which has jurisdiction over the parties and the subject matter; (2) be final and on the merits; (3) determine a question raised in the later litigation; and (4) involve the same parties or their privies, or is a decision in rem (Re Yip Lim Po [2022] 3 HKLRD 356).

76.  Counsel for the Plaintiffs further rely on the rule originated from Hollington v F Hewthorn Co Ltd [1943] KB 587, that the finding of a previous court is only a form of opinion, and that such opinion evidence is irrelevant for any other decision of another court. Counsel referred to the observations made by Christopher Clarke LJ in Roger v Hoyle [2015] QB 265 (at paras 39-40):

“39. As the judge rightly recognized the foundation on which the rule must now rest is that findings of fact made by another decision-maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (“the trial judge”), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision-maker nor an expert in any relevant discipline, of which decision-making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard.

40. In essence, as the judge rightly said, the foundation of the rule must now be the preservation of the fairness of the trial in which the decision is entrusted to the trial judge alone.”

77.  In China Medical Technologies Inc v Bi Xiao Qiong [2020] HKCA 541, the Court of Appeal also held the Hong Kong court is duty bound to assess and evaluate the evidence before it, independently of the judgment of any other court. The judgment of the other court is “at most a record of how another court viewed the evidence”, “an expression of opinion” by the other court, and is not relevant for the disposal of the matter before the Hong Kong court. The Court of Appeal explained that the foreign judgment in question added nothing to the evidence and was irrelevant to the determination of the appeal in terms of factual evaluation.

78.  The Plaintiffs accept that decisions of foreign courts may be relied upon as evidence of foreign law, as opposed to any findings of facts and conclusions made in the judgment. However, Counsel for the Plaintiffs highlighted that the court is still not bound to apply a foreign decision if it is satisfied, as a result of all the evidence, that the decision does not accurately represent the foreign law (Dicey, Morris and Collins, The Conflict of Laws (16^th edition) Vol 1, para 3-019). Citing Shenzhen Development Bank Company Ltd v New Century Int’l (Holdings) Limited HCA 2976/2001, unreported, 31 July 2002, Counsel for the Plaintiffs pointed out that where there is conflicting expert evidence on foreign law before the court, the judge is entitled and obliged to use his legal training and to form his own view on the meaning of foreign law, even if the expert’s opinion as to its meaning is different from his/her own.

79.  On behalf of CMPH, Counsel submitted that it is an abuse for a party to initiate legal proceedings which constitute a collateral attack upon a final decision made against that party by another court of competent jurisdiction, where the party had full opportunity to contest the decision, if the pursuit of the same issue in the new proceedings would result in manifest injustice, or bring the administration of justice into disrepute amongst right-thinking people (China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1). It was highlighted that abuse can be found even where the parties to the subsequent proceedings are not the same, and cannot be described as privies of the original party. Counsel highlighted that the same principle applies when it comes to a collateral attack against a foreign judgment.

80.  Counsel for CMPH also contended that the Hollington rule does not exclude reliance on the evidence referred to in earlier judgments (such as the contents of documents or the evidence of witnesses), or statements of fact made in earlier judgments (Capital Century). The rule in Hollington is also not engaged when foreign court decisions are relied on as evidence of foreign law, because foreign law, treated as a question of fact, is always an issue on which opinion evidence is admissible. Counsel contended that, a fortiori, the earlier judgments are admissible to show that these judgments and the findings therein had been made, as opposed to their being admitted as evidence of the facts found (Wei Xing v Willwin Development (Asia) Co Ltd HCMP 1922/2016, 13 April 2017).

81.  At this initial stage, it may be useful to point out that according to Counsel for the Plaintiffs, none of the judgments of the Djibouti Courts sought to be relied upon by the Defendant in this case contain any proposition of Djibouti law as expressed, particularly when they do not contain any analysis or reasons.

Dissolution Ground

82.  In terms of finality and being the most recent in the chronology of events affecting the Summonses for determination, I will first deal with the Dissolution Ground.

83.  The first argument made for the Plaintiffs against the Dissolution Ground was that the Dissolution Judgment of 20 December 2023, whereby DCT was dissolved and a liquidator was appointed for DCT, had been suspended pending the appeal to the Djibouti CA. Such argument was superceded by subsequent events, as the Dissolution CA Judgment was made on 26 February 2023, whereby the appeal was dismissed as being out of time. There is no further question of the Dissolution Judgment being in suspension.

84.  After the issue of the Dissolution CA Judgment, the Plaintiffs’ further submission on the evidence filed is that (as per Michou 8) DPWD did not have a fair opportunity to be heard in the appeal process. According to the Plaintiffs, the appeal process was “farcical”, as the Djibouti CA had initially closed the case, after taking allegedly unusual steps to speed up the process in order to procure a ruling from the Djibouti CA prior to the hearing of the Authority Summons in Hong Kong, and then the Djibouti CA reopened the case on its own accord to permit the Public Prosecutor to make submissions. The Plaintiffs complain that the Public Prosecutor had submitted new evidence just 2 days before the hearing at which the Dissolution CA Judgment was rendered, relying on new evidence on which they did not have the opportunity to make their submissions.

85.  The Plaintiffs further maintain that the date of service of the Dissolution Judgment, as accepted by the Djibouti CA, was manifestly wrong, perverse and unjustifiable. It was by virtue of its finding on the date of service that the appeal was adjudged out of time, and dismissed on that ground.

86.  In the premises, the Plaintiffs submit that the Dissolution CA Judgment (1) involved breaches of principles of natural justice and/or procedural defects which constitute a denial of substantive justice; and (2) that the error made in the Djibouti CA Judgment as to service was so wrong as to be evidence of bias and/or lack of good faith on the part of the Djibouti CA in arriving at the conclusion reached by it, that the appeal should be dismissed as it was one day out of time.

87.  These questions raise the issues of whether the Dissolution Judgment and the Dissolution CA Judgment were rendered in breach of principles of natural justice and/or substantial justice as recognized by the Hong Kong Courts; and whether the Plaintiffs had to exhaust all local remedies available under Djibouti law in respect of the defects in the Djibouti process of which they now complain, before they can claim before the Hong Kong Court that recognition of the judgments of the Djibouti Courts should be refused. If they were so required, the further question is whether the Plaintiffs had in fact exhausted its local remedies.

88.  From the authorities cited by the parties, the judgment in Koza Ltd v Koza Altin Isletmeleri AS [2022] EWCA Civ 1284 is helpful in its references to the cases which explain the operation of the principles involved in the recognition of foreign judgments. At paragraph 58 of the judgment of Sir Julian Flaux, it was explained that the deferential approach adopted by English courts under the foreign act of state doctrine to foreign legislation or executive acts has no application to foreign judgments, which attract a different principle. The case of Deutsche Bank AG London Branch v Receivers; Central Bank of Venezuela v Governor and Company of the Bank of England [2021] UKSC 57, and the judgment of Lord Lloyd-Jones JSC was then cited:

“157. Although judicial rulings of a foreign state are manifestations of state sovereignty, it is now clear that they do not themselves attract the operation of any rule of foreign act of state applicable in this jurisdiction and, as a result, are not entitled to the deference which may be shown to legislative and executive acts of a foreign state. So much was established by Lord Collins delivering the judgment of the Judicial Committee of the Privy Council in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7; [2012] 1 WLR 1804, para 101:

“The true position is that there is no rule that the English court (or Manx court) will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence. That, and not the act of state doctrine or the principle of judicial restraint in Buttes Gas & Oil Co v Hammer (No 3) …, is the basis of Lord Diplock’s dictum in The Abidin Daver … and the decisions which follow it. Otherwise the paradoxical result would follow that, the worse the system of justice in the foreign country, the less it would be permissible to make adverse findings on it.

158. Rix LJ was able to build on this foundation when delivering the judgment of the Court of Appeal in Yukos Capital (No 2) [2014] QB 458, which held justiciable the issue whether judicial acts had been part of a “campaign waged by the Russian state for political reasons against the Yukos group and its former CEO” (paras 29(ii), 90). This difference of approach does not reflect any hierarchical inferiority of judicial acts but rather reflects a shared understanding of how courts should behave under the rule of law. As Lord Mance put it in Belhaj v Straw [2017] AC 964, para 73(ii):

“If one believes in justice, it is on the basis that all courts will or should subscribe to and exhibit similar standards of independence, objectivity and due process to those with which English courts identify.”

159. As a result, courts in this jurisdiction are more willing to investigate whether a foreign court is acting in a way that meets the standards expected of a court and whether there has occurred or is likely to occur a failure of substantial justice. For this reason, foreign judgments fall to be assessed under different rules from those applicable to legislative and executive acts and are simply less impervious to review. The matter is admirably expressed by Rix LJ in Yukos [2014] QB 458, para 87:

“So the position is, to put the matter broadly, that whereas in a proper case comity would seem to require (at any rate as a principle of restraint rather than abstention) that the validity or lawfulness of the legislative or executive acts of a foreign friendly state acting within its territory should not be the subject of adjudication in our courts, comity only cautions that the judicial acts of a foreign state acting within its territory should not be challenged without cogent evidence. If then the question is asked – Well, why should acts of a foreign judiciary be treated differently from other acts of state, and what is the basis of that difference? – the answer, in our judgment, is that judicial acts are not acts of state for the purposes of the act of state doctrine. The doctrine in its classic statements has never referred to judicial acts of state, it has referred to legislative or executive (or governmental or official) acts of a foreign sovereign. … It is not hard to understand why there should be a distinction. Sovereigns act on their own plane: they are responsible to their own peoples, but internationally they are responsible only in accordance with international law and internationally recognised norms. Courts, however, are always responsible for their acts, both domestically and internationally. Domestically they are responsible up to the level of their supreme court, and internationally they are responsible in the sense that their judgments are recognisable and enforceable in other nations only to the extent that they have observed what we would call substantive or natural justice, what in the United States is called due process, and what internationally is more and more being referred to as the rule of law. In other words the judicial acts of a foreign state are judged by judicial standards, including international standards regarding jurisdiction, in accordance with doctrines separate from the act of state doctrine, even if the dictates of comity still have an important role to play. As Lindley MR said in Pemberton v Hughes [1899] 1 Ch 781, 790: ‘If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice’.” (Emphasis added)

In the result, the Court of Appeal therefore agreed with the holding of Hamblen J at first instance, [2011] EWHC 1461 (Comm); [2012] 1 All ER (Comm) 479, para 201, that “there is no rule against passing judgment on the judiciary of a foreign country”.”

89.  Counsel for the Plaintiffs highlighted the fact that the principle of non-recognition of judgments obtained in breach of natural justice applies equally to judgments in rem, as demonstrated by the case of Koza Ltd itself, and by Altimo Holdingsand Investment Ltd v Kyrgyz Mobil Tel Limited [2012] 1 WLR 1804.

90.  Adams v Cape Industries PLC [1990] 1 Ch 433 has been cited in many of authorities on the issue, and the judgment of the Court of Appeal sets out guidance on the legal principles. Slade LJ first referred to the judgment of Lindley MR in Pemberton v Hughes [1899] 1 Ch 781, where he said:

“If a judgment is pronounced by a foreign court over persons within its jurisdiction and in the manner with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice. Where no substantial justice, according to English notions, is offended, all that English courts look to is the finality of the judgment and the jurisdiction of the court, in this sense and to this extent -namely, its competence to entertain the sort of case which it did deal with, and its competence to require the defendant to appear before it. If the court had jurisdiction in this sense and to this extent, the courts of this country never inquire whether the jurisdiction has been properly or improperly exercised, provided always that no substantial justice, according to English notions, has been committed.”

91.  On the question of natural justice, Slade LJ explained this by reference to the judgment of Atkin LJ in Jacobson v Frachon, 138 LT 386, where it was observed:

““The Master of the Rolls seems to prefer, and I can quite understand the use of the expression, ‘contrary to the principles of natural justice;’ the principles it is not always easy to define or to invite everybody to agree about, whereas with our own principles of justice we are familiar. Those principles seem to me to involve this, first of all that the court being a court of competent jurisdiction, has given notice to the litigant that they are about to proceed to determine the rights between him and the other litigant; the other is that having given him that notice, it does afford him an opportunity of substantially presenting his case before the court. Both those considerations appear to be essential if they are to be in accordance with natural justice.” (Emphasis added.)

We have had the benefit of very careful and detailed analyses in argument of the judgment in Jacobson v. Frachon. We intend no disrespect to such arguments if we do not prolong an already very long judgment (in which we have already decided that the defendants succeed on the presence issue) by recapitulating these analyses. We will summarise our conclusions in relation to Jacobson v. Frachon, 138 L.T. 386, as follows:

(1) Atkin L.J. in his judgment was not attempting to make an exclusive or comprehensive statement of the circumstances in which our courts will treat the procedure adopted by a foreign court in reaching its decision as offending against the principles of natural justice.

(2) Lord Hanworth M.R. was clearly of the view, at p. 390, which we share, that the requirements of due notice and proper opportunity to be heard will, in the majority of cases which can be expected to arise, sufficiently comprise the concept of natural justice in a procedural context, but he prudently qualified his statement by saying that they “almost, if not entirely” comprise it.

(3) We therefore reject the contention that the decision of this court in Jacobson v. Frachon restricted the defence of breach of procedural natural justice to the requirements of due notice and opportunity to put a case. Scott J. was entitled, in our view, to direct himself by reference to the test stated by Lord Lindley M.R. in Pemberton v Hughes [1899] 1 Ch. 781, 790, and to consider whether the procedural defect alleged by Cape was such as to constitute a breach of an English court's views of substantial justice. The point was not concluded against the defendants merely because they had been given proper notice of the application for default judgment and would, if they had attended, have been allowed full opportunity to put their case. …”

92.  Slade LJ then considered the requirement of using remedies which are available in the foreign court, and whether and how this would affect the English Court’s assessment of its view of the overall justice of the foreign judgment. His summary as set out in the judgment is as follows:

“It is at least clear that our law does not oblige a defendant who can show that a foreign judgment has been obtained by fraud to have used any available remedy in the foreign court with reference to that fraud if he is successfully to impeach that judgment in our courts: see Abouloff v. Oppenheimer & Co. (1882) 10 Q.B.D. 295 and Jet Holdings Inc. v. Patel [1990] 1 Q.B. 335. The position may well be the same in cases where there has been a breach of natural justice of the two primary kinds considered by Atkin L.J. in Jacobson v. Frachon,138 L.T. 386, 392, namely, absence of notice of the proceedings or failure to afford the defendant an opportunity of substantially presenting his case.

In this judgment, however, we are dealing with a case where, although there was in our view a departure from the basic principles of natural justice in the assessment of the amount of a default judgment, nevertheless (a) the error which led to this departure was an honest error on the part of all concerned; (b) the defendants had proper notice of the proceedings and could have presented their case on its merits if they had chosen to do so, but chose not to do so; (c) the procedural rules applicable in the Tyler Court were themselves fair and just; (d) the defendants had the right to apply to set aside the judgment on the grounds that the procedure for the assessment of damages was irregular under the relevant rules and such application would presumably have been allowed if made in due time.

Against this background, we are not persuaded that possession of and failure to exercise this right by the defendants can be disregarded as being wholly irrelevant in determining whether the proceedings in the Tyler Court, which we think must be viewed as a whole, offend against English views of substantial justice, within the principles stated by Lord Lindley M.R. in Pemberton v Hughes [1899] 1 Ch. 781, 790, as the plaintiffs would submit.

It is well established that a defendant, shown to have been subject to the jurisdiction of a foreign court, cannot seek to persuade our court to examine the correctness of the judgment whether on the facts, or as to the application by the foreign court of its own law or, when relevant, of the law of this country. A foreign judgment is not impeachable merely because it is “manifestly wrong”: Godard v. Gray, L.R. 6 Q.B. 139; Castrique v. Imrie (1870) L.R. 4 H.L. 414 and Robinson v Fenner [1913] 3 K.B. 835, 842. In any such case it could be said that there has been a breach of natural justice, but it is not a type of breach which our courts will consider relevant. In effect, their attitude is that the only way in which the defendant can seek to correct an error of substance made by the foreign court is by using such means for correction of error as may be provided under the foreign system.

This being the position where there has been an error of substance, it would, in our judgment, be anomalous if our courts were obliged wholly to disregard the existence of a perfectly good remedy under a foreign system of procedure in considering whether the defective operation of that procedure has led to a breach of natural justice.

…

Since the ultimate question is whether there has been proof of substantial injustice caused by the proceedings, it would, in our opinion, be unrealistic in fact and incorrect in principle to ignore entirely the possibility of the correction of error within the procedure of a foreign court which itself provides fair procedural rules and a fair opportunity for remedy. The court must, in our judgment, have regard to the availability of a remedy in deciding whether in the circumstances of any particular case substantial injustice has been proved. However, the relevance of the existence of the remedy and the weight to be attached to it must depend on factors which include the nature of the procedural defect itself, the point in the proceedings at which it occurred and the knowledge and means of knowledge of the defendants of the defect and the reasonableness in the circumstances of requiring or expecting that they made use of the remedy in all the particular circumstances.”

93.  On behalf of the Plaintiffs in this case, Counsel places reliance on Agbara v The Shell Petroleum Development Company of Nigeria Limited [2019] EWHC 3340 (QB), to emphasize that there is no absolute rule that a litigant resisting recognition of a foreign judgment must exhaust all remedies available in the foreign court to correct the irregularity or injustice complained of.

94.  Agbara concerned whether it would be “just and convenient” for a foreign judgment to be enforced in the UK under section 9 of the Administration of Justice Act. At paragraphs 32 and 33 of the judgment of Jason Coppel QC, it was observed that breach of natural justice is a well-established defence to a common law action to enforce a judgment, and whether or not there has been a breach of natural justice, and whether such a breach should justify the exercise of a discretion against registering the judgment, must be determined with due regard to international comity and respect for the foreign legal system. In the judgment, the learned deputy judge examined the procedures in the foreign jurisdiction, and concluded that there was a serious breach of natural justice on the facts, as Shell was not given the opportunity to be heard in the trial which took place and the judgment was obtained in substantial breach of natural justice.

95.  The court then proceeded to consider the next question, of whether the force of that substantial breach is lessened or removed by Shell’s unsuccessful appeal against the judgment. At paragraph 40, the learned judge explained:

“40. Shell has had the opportunity to appeal and the reasons for why no such appeal has succeeded have been procedural rather than substantive. Shell failed to file an Appellant’s brief before the Court of Appeal and then failed to apply for permission to appeal to the Supreme Court when permission was required. Further, Shell withdrew its appeal from the decisions of the Judge made on 25 February 2008, ostensibly because it had become unnecessary in circumstances where a new judge was to be allocated to the claim and would hear it afresh.

41. I do not consider that Shell’s failure to pursue an appeal in accordance with Nigerian procedural rules should lessen to any significant extent the force in the analysis under s. 9(1) AJA of the serious breach of natural justice which occurred on 25 February 2008. First, there is authority that a party complaining of a breach of natural justice in the obtaining of a foreign judgment which is of the most serious kind is not required to demonstrate that it has exhausted its remedies by way of appeal against that judgment in the jurisdiction in which it was obtained.

…

42. It was not necessary for the Court of Appeal in Adams to reach a definitive conclusion on that point, because the alleged breach of natural justice in that case was not of the most serious kind. The breach in the present case does fall into the most serious category but, strictly, the point raised in Adams does not arise for determination here either, as I am only considering whether it would be “just and convenient” to register the judgment not whether there is an absolute bar to registration at common law. Nevertheless, it does seem to me that there is a material analogy between a judgment obtained by fraud and one which has been obtained following the other party being unjustly prevented from presenting its case, such that it ought not to be necessary for domestic remedies to be exhausted in the latter situation. In weighing up whether it is just and convenient for the judgment to be enforced in the UK, I should therefore be cautious in any criticism of Shell regarding its attempts to appeal the judgment.”

96.  For the Plaintiffs, Counsel submitted that where there is a breach of natural justice of the two primary kinds, involving lack of due notice of the proceedings and a party being prevented from presenting its case, it ought not be necessary for the domestic remedies to be exhausted.

97.  Counsel for the Plaintiffs did point out that in Cancrie Investments Ltd v Mr Zulfiqur Al Tanveer Haider [2024] EWHC 1876, the court referred to the judgment in Agbara cited above, but interpreted it as not laying down any definitive rule that exhaustion of local remedies is not necessary even for the most serious breach of natural justice. At paragraph 101 of the judgment in Cancrie, the learned deputy judge observed as follows:

“Although the judge in the Agbara case urged caution when dealing with cases of the most serious breach of natural justice including where one party is unjustly prevented from preventing their case, I do not understand him to be suggesting that one should not still adopt the factual approach described in Cape v Adams but only that in such a case the availability of a domestic remedy will be of much less significance.”

98.  I turn to the application of the above relevant principles to the facts of the present case.

Lack of notice of the Dissolution Proceedings

99.  The Plaintiffs have maintained throughout that they had never been served with the papers initiating the Dissolution Proceedings, nor ever notified of the relevant summons (Michou 7, paragraphs 12-18; Lucas 1, paragraphs 30-33). This was notwithstanding the serious nature of the proceedings, affecting the dissolution of DCT. According to the evidence of the Plaintiffs’ experts on French law and Djibouti law, DPWD as the controlling shareholder of DCT obviously had an interest in the Dissolution Proceedings and in the relief sought, but as neither DCT nor any of the directors appointed by DPWD to DCT had been notified of the proceedings, they were not present at the hearing and did not have the opportunity to present their case and objections to the dissolution.

100.  There is no evidence as to how the summons initiating the Dissolution Proceedings were served. The only reference was made in the Dissolution Judgment itself, when it stated that “the Defendant (DPWD) was “summoned via the Public Prosecutor” but did not appear at the hearing on 20 December 2023 when the Dissolution Judgment was made (“20/12 Hearing”). On the part of the CMPH, it was not in a position to adduce any evidence in this regard since it was not a party to the Dissolution Proceedings. The fact remains that there was no evidence at all to contradict the evidence of the Plaintiffs, that they had not been notified of nor served with the documents initiating the Dissolution Proceedings.

101.  CMPH’s Djibouti law expert sought to draw the distinction between being properly served with the Dissolution Proceedings, and being notified and having notice of the proceedings. The emphasis made for CMPH was that irrespective of how and whether the Dissolution Proceedings were served on DPWD, Kamil, who was the local agent appointed by the Plaintiffs’ lawyers, was in court at the 20/12 Hearing, when the Dissolution Judgment was pronounced. The Defendant also claims that Kamil was given a copy of the “Role”, which is akin to our Court List, on the same day. The Role listed, as one of the “New Matters” to be dealt with by the Djibouti Commercial Court on the day, the Dissolution Proceedings concerning DCT and DPWD. There is no dispute that Kamil did not in any event make any submissions on behalf of any of the Plaintiffs when he was in court at the 20/12 Hearing.

102.  The Role is similar to the Court List of the Hong Kong courts, and is issued shortly before the day of a hearing, listing matters to be put before the Djibouti Court on the day. It sets out matters “set down for decision”, matters which had been adjourned before, and “new matters”.

103.  The fact of Kamil’s presence in court was explained as follows, and there does not appear to be substantial difference in the separate accounts given.

104.  According to Abayazid 7 filed for CMPH, there are about 30 practising advocates in Djibouti, and they all typically meet at the Court House in the morning on Wednesdays, which is when the main hearings before the Djibouti CFI and the Djibouti CA take place. The list of the matters to be heard (ie the Role) is made available by the Djibouti Court registry to all advocates. At the hearing, the Court typically follows the order of the matters as they appear in the Role. The Court first deals with the matters which have been set down for decision at the hearing and issues the Court’s decision orally. The dispositive part of the decision is reproduced in the form of an Extrait de plumitif prepared by the Court clerk and made available at the Court registry after the hearing. Matters which had been adjourned at previous hearings are then dealt with, followed by new matters.

105.  Abayazid was present at the 20/12 Hearing when the dissolution of DCT was ordered. I read his evidence (paragraph 16 of Abayazid 7) to mean that he was in court as advocate because his name appeared in 3 matters listed in the Role, for adjourned matters. According to Abayazid, he observed that Kamil was also present. The Republic of Djibouti and DCT were also represented at the 20/12 Hearing.

106.  Kamil’s role was explained in Michou 9 (at paragraph 7). The Plaintiffs claim that Kamil is a “corresponding lawyer” who was appointed by the Djibouti Bar Association to represent DPWD, after its former attorney passed away in 2021, and there were difficulties in finding new representation for the Plaintiffs in Djibouti. According to Michou, Kamil’s role was “to facilitate procedural steps in the various Djibouti proceedings”. Typically, Michou and his team would draft and prepare written submissions and court filings, obtain instructions from DPWD, and then Kamil would facilitate the filing of the documents and appear on behalf of DPWD in the Djibouti court. On the basis of this explanation, it can be argued that service of any documents relating to proceedings in Djibouti on Kamil can constitute at least notice on DPWD as an agent in Djibouti for the filing of documents in Djibouti.

107.  However, I find it difficult to accept that Kamil’s fortuitous presence in court on 20 December 2023, when the Dissolution Proceedings were listed to be heard by the Djibouti court, according to the Role - which was only sent to Kamil on or just before the 20/12 Hearing - can constitute valid and proper service or even proper and adequate notice of the relevant documents on DPWD. There is no evidence that Kamil was in court because of any prior service of the documents in the Dissolution Proceedings on him, on behalf of DPWD, in accordance with Djibouti law. On my reading of the evidence, he was in court simply on the routine Wednesday morning when all the business of the Djibouti Court would take place. Without having been properly served or notified of the Dissolution Proceedings before the receipt of the Role, Kamil could not have been in a position to seek and obtain instructions from DPWD on the matter listed for hearing.

108.  I do not find useful or adequate the justification given by the Defendant’s expert, that the judge hearing and deciding on the matter can and has the power to determine, on the facts of a case, whether to adjourn a hearing, or to proceed in the absence of a party. Even if the court has the power to make a decision or to proceed with the hearing in a case where the judgment is “deemed adversarial” and can be reviewed on appeal, that does not by itself mean that there is no denial or breach of the principles of natural justice if the facts so establish the breach. On appeal, the court reviewing the judgment deemed adversarial may well consider that on the facts, the order made in the absence of the party who had not been properly served constitutes a breach of the rules of natural justice and a denial of a party’s right to be heard.

109.  I accept the submissions made for the Plaintiffs, that even if the papers initiating the Dissolution Proceedings had been served on (or notified) through the Public Prosecutor, the evidence cannot show that those papers had been duly forwarded by the Public Prosecutor to DPWD before the 20/12 Hearing, in accordance with Djibouti law (as distinct from the evidence on how the Dissolution Judgment had been served via the Public Prosecutor, and thereafter on DPWD through the diplomatic service). As will be illustrated below, it is apparent from the Dissolution CA Judgment that the Djibouti CA accepts that mere delivery of documents to the Public Prosecutor does not amount to valid service under Djibouti law.

110.  In my judgment, documents for the commencement of the Dissolution Proceedings are important as they constitute the initiation of the proceedings seeking, and in this case resulting in, the order for dissolving DCT and the appointment of a liquidator for DCT. I accept the expert evidence of the Plaintiffs, that it is essential and necessary for the shareholders, in this case DPWD as the majority shareholder, of the company to be notified of the commencement of the Dissolution Proceedings and the relief sought, and be given the opportunity to make submissions to oppose the dissolution sought by the Administrator, who acted for and in the name of DCT when initiating the Dissolution Proceedings. In the absence of satisfactory evidence as to how the documents for the initiation of the Dissolution Proceedings had been served either on DPWD, or on the directors appointed by DPWD to the board of DCT who may be present in Djibouti, I am not satisfied that DPWD had due notice of the Dissolution Proceedings, and without such notice, DWPD did not have the opportunity to present its case in the Dissolution Proceedings, before the Dissolution Judgment was issued.

111.  On behalf of CMPH, it was highlighted that if there was any breach of natural or substantial justice in the process of the Djibouti Proceedings as the Plaintiffs claim, they still ought, but had failed, to exhaust the local remedies available to them under Djibouti law. Counsel contended that the Plaintiffs should have appealed or applied to set aside the Dissolution Judgment, but they had delayed the matter despite having knowledge of the Dissolution Judgment from the time it was made, until more than 2 months thereafter, which rendered their appeal being dismissed for being filed out of time. It was argued that the Plaintiffs cannot complain about the alleged breach of natural justice, or their having been deprived of notice of the Dissolution Proceedings, or of the chance to present their case, if they by their own default failed to comply with the applicable Djibouti rules and filed their appeal late.

112.  In my judgment, the failure to effect due service of the papers initiating the Dissolution Proceedings, and the lack of due notice to the Plaintiffs of the 20/12 Hearing, constituted a breach of natural justice of the two primary kinds considered in Jacobson v Frachon. Having considered the nature of the defect/breach in the process, the significance of the 20/12 Hearing and of the Dissolution Judgment on DPWD, I do not consider that it was necessary for the Plaintiffs to exhaust any available local remedy open to them. Even if it were necessary, I do not regard the Plaintiffs’ failure or alleged delay in pursuing the local remedies in Djibouti to have such serious effect to the extent of lessening the impact of the significant breach of natural justice.

113.  On the evidence, the Dissolution Appeal was not dismissed on the merits, after the Djibouti CA had considered the facts including the manner of service of the documents relating to the Dissolution Proceedings, and the complaint made by the Plaintiffs that DPWD had not received proper notice of the Dissolution Proceedings. After dismissing the appeal on the time limitation point, there was no further opportunity for the Djibouti CA to consider and rectify the alleged breach of natural justice. In all the circumstances of this case, the availability of an appeal as a local remedy is not of sufficiently great significance.

Dissolution CA Judgment

114.  The parties devoted much time, argument and evidence on the Dissolution CA Judgment. On CMPH’s case, the Djibouti CA had dismissed the Dissolution Appeal, and the Dissolution Judgment should be recognised by the Hong Kong Court, by finding that upon dissolution of DCT and the appointment of a liquidator for DCT, these proceedings commenced by Deacons in Hong Kong on the instructions of the former directors of DCT should be dismissed on the ground of lack of authority from the liquidator.

115.  On the Plaintiffs’ part, the conduct of the Dissolution Appeal and the dismissal of the appeal was itself a breach of natural justice. The complaints have been summarized in the earlier paragraphs of this action.

116.  I have found that the Dissolution Judgment should not be recognized by the Hong Kong Court, as being in breach of the rules of natural justice. The Dissolution CA Judgment simply dismissed the Dissolution Appeal made by the Plaintiffs for having been filed out of time, without dealing with or dismissing the merits of the issue of the proper service of the Dissolution Proceedings on DPWD. Having considered the complaints made by the Plaintiffs and reviewed the Dissolution CA Judgment itself, I cannot find that the CA Judgment can itself be rejected as being so wrong as to be evidence of bias, or be such that no court acting in good faith could have arrived at it, which is the relevant test identified in Maximov v Open Joint Stock Co ‘Novolipetsky Metallurgichesky Kombinat’ [2017] 2 CLC 121 (at para 15).

117.  The reasons for my conclusion on the Dissolution CA Judgment are summarized below. However, this finding of mine does not affect my conclusion on the Dissolution Judgment, as having being made without due service of the Dissolution Proceedings on DPWD, and in breach of the rights of DPWD to be heard. The Dissolution CA Judgment made no order on the merits of, or substantive issues, as to the dissolution of DCT, to be given effect by this Court.

118.  With regard to the Plaintiffs’ allegation that the Republic had colluded with the Defendant in this case, or that the Djibouti CA had somehow expedited the Dissolution Appeal to procure the Dissolution CA Judgment for the purpose of frustrating the proceedings in Hong Kong, I can find no evidence to substantiate such claim. Nor can I read any hostility or mala fide into any attempt by the Dijibouti courts to manage or expedite the Dissolution Proceedings or the Dissolution Appeal in any way. It is only natural, and to be expected, that a court would not wish any proceedings to be delayed and to take active case management steps in the public interest.

119.  Nor is it the proper function of this Court, bearing in mind the concerns as to comity and the caution for restraint expressed in the authorities, to question either the Djibouti rules of procedure, or the merits of any case management or other decision of the Djibouti court, in applying the law of Djibouti governing the proceedings before it – unless it is demonstrably clear, on cogent evidence, that there is some egregious breach and disregard of the rules of natural justice.

120.  The Plaintiffs’ complaint, that they were not given the necessary time to prepare their case and to give the necessary instructions to their lawyers, has to be read in the entire context of the case. On the facts, the Djibouti CA had already granted several adjournments on the application of DPWD (albeit for periods shorter than the extension sought). Submissions in writing had in fact been filed on behalf of DPWD. These already made the claims that DPWD as a shareholder of DCT had not been served with and had not received the documents commencing the Dissolution Proceedings, that the Administrator had no locus to initiate those proceedings, and that there was an arbitration agreement in the Articles of DCT and in the relevant JVA. Whether adjournments should be granted, and the length of the adjournments granted, are all case management decisions within the discretion of the Djibouti Court.

121.  As to the involvement of the Public Prosecutor, this Court is not surprised by the Djibouti CA’s decision to involve and to seek submissions from the Public Prosecutor. According to the Defendant’s expert, submissions from the Public Prosecutor are compulsory in dissolution matters under the Djibouti Civil Procedure Code (“Code”) because these concern either the “personal status” of DCT, or concern the Republic which is a shareholder of DCT. The dissolution sought affected the status and existence of DCT (a company incorporated under the laws of Djibouti), of which the Republic was a shareholder. It was pointed out that even in the initial Dissolution Proceedings before the Djibouti CFI, the Public Prosecutor had been invited to file requisitions. According to the Dissolution Judgment, the Dissolution Proceedings had been communicated to the Public Prosecutor, who had requested that DCT’s request for dissolution be granted and that a liquidator be appointed. DPWD should not have been surprised by the Djibouti CA’s decision to seek submissions from the Public Prosecutor in the Dissolution Appeal, before issuing judgment.

122.  As for the claim that they had been taken by surprise by the new documentary evidence produced by the Public Prosecutor 2 days before the Dissolution CA Judgment was handed down, I am not persuaded that this is so.

123.  In the submissions filed by the Public Prosecutor on 11/12 February 2025, it was argued that the Dissolution Appeal was inadmissible on the ground of delay. Submissions were made on the manner of service, relying on the fact that the Dissolution Judgment was served on the Public Prosecutor’s office on 27 December 2003. According to the Public Prosecutor’s submissions, the Public Prosecutor’s Office had sent the Dissolution Judgment to the Minister of Justice on 2 January 2024, and that according to Article L 377-2 of the Code, the Dissolution Judgment was effectively served on 4 January 2024, by diplomatic channels through the intermediary of the Djibouti Minister of Justice on the Djibouti Minister of Foreign Affairs. The Dissolution Appeal was on that basis claimed to be filed more than 2 months after the effective service of the Dissolution Judgment.

124.  DPWD filed its written submissions in reply on 19 February 2025. It sought a hearing for oral arguments and for an adjournment of one month. The Court only agreed to adjourn the hearing to 26 February 2025, for any further written submissions and for “possible oral argument”. According to the Plaintiffs, it was on 24 February 2025 that the Public Prosecutor filed and sent to the Plaintiffs’ new documents on the service of the Dissolution Judgment (“New Evidence”), but without any further written submissions as to the contents of the new documents, or how they were sought to be relied upon.

125.  The New Evidence complained of by the Plaintiffs comprised:

(1) A purported undated letter sent by Djibouti’s Embassy to the Ministry of Foreign Affairs of the United Arab Emirates (“UAE Ministry”) enclosing the Dissolution Judgment (“Undated Letter”); and

(2) A purported letter dated 30 January 2024 from Djibouti’s Embassy to Djibouti’s own Ministry of Foreign Affairs (“30 Jan Cover Letter”) referring to:

(i) the purported transmission of another letter (No 26-2024) dated 23 January 2024 sent to the UAE Ministry concerning service of the Dissolution Judgment (“23 Jan Letter”); and

(ii) a purported “acknowledgment” of the said service (“Purported Acknowledgment”).

The Plaintiffs highlighted the fact that the references to the 23 Jan Letter and the Purported Acknowledgement were not readily identifiable on the face of the actual documents included in the Exhibit List submitted by the Public Prosecutor.

126.  The 26 February 2025 hearing was attended by Kamil and a representative from the Public Prosecutor’s Office. The Public Prosecutor did not make any oral submission, did not address the Court on the New Evidence, and only asked the Court to consider his earlier submissions filed on 11 February 2025.

127.  According to Kamil, the submissions he made to the Court at the 26 February hearing were to oppose the manner in which the Dissolution Proceedings had been managed since December 2024 and he pointed out that DWPD required more time as a foreign company. He claimed that there was no adversarial debate on the New Evidence which he had only received 2 days before the hearing. After a short break, the Dijibouti CA then pronounced simply that the Appeal was out of time, and the Dissolution CA Judgment was made available the next day (which Kamil claimed was unusual).

128.  According to Counsel for the Plaintiffs, they were taken by surprise by the New Evidence on the service of the Dissolution Judgment, and had been deprived of the opportunity to present their case when the Djibouti CA adopted the New Evidence as establishing that the Dissolution Judgment was effectively served on DPWD, when the relevant documents were sent by the Djibouti Embassy in Dubai, UAE (after the Djibouti Ministry of Foreign Affairs had received the documents from the Djibouti Ministry of Justice) to the Ministry of Foreign Affairs in the UAE, and receipt of same was acknowledged and evidenced by a chop imprinted there, on 23 January 2024.

129.  On behalf of the Plaintiffs, it was contended that the conclusion made by the Djibouti CA, as to service having been effected on 23 January 2024 on the basis of the New Evidence submitted, was never part of any submission or argument made before the 26 February 2025 hearing. The Republic, the Administrator and the Public Prosecutor had argued that the Dissolution Appeal was out of time on the basis that service on DPWD had been completed on 27 December 2023, when the documents were served on the Public Prosecutor.

130.  Having reviewed the evidence and the submissions, it cannot fairly be said that DPWD had been deprived of the opportunity to present its case on the service of the Dissolution Judgment. Although the Public Prosecutor produced the entire set of documents by the New Evidence on 24 February 2025, without making any further submissions on the purported effect of those documents, the issue in dispute had always been how and when the Dissolution Judgment had been served on or sent to DPWD: what was the date of effective service of the Dissolution Judgment on DPWD, and whether the Dissolution Appeal was filed within the requisite period of 3 months from the effective date of service of the Dissolution Judgment. As the Plaintiffs accepted, the Public Prosecutor had stated its case as to service, by relying on the date when the Dissolution Judgment was served on the Public Prosecutor, on 27 December 2023. The Plaintiffs were also aware of the submissions and case relied upon by the Republic. I cannot see how the “Certificate of Non-Appeal” issued by the Chief Clerk on 28 March 2924, referring to service on 27 December 2024, can bar the Djibouti CA from adopting another date as effective and valid service, but in any event, the Plaintiffs were aware of this Certificate and its contents.

131.  The New Evidence produced on 24 February 2025 were the official documents which show and demonstrate the dates when the Dissolution Judgment were transmitted, from the Public Prosecutor to the respective ministries within Djibouti, and then by the Djibouti Embassy in Dubai to the respective ministries within the UAE. The issues of the effective date of service of the Dissolution Judgment and how it should be served on DPWD had all along been “in the arena”. I agree with Counsel for CMPH that DPWD had been given adequate notice of the case relied upon by the Public Prosecutor and the Republic, that service was completed upon delivery to the Public Prosecutor in Djibouti, which was 27 February 2023. If DPWD had wanted to make submissions on whether this was correct under Djibouti law, and if not, what in DPWD’s case was the required mode of service and when such service was effected, they could have done so. Mr Yu for CMPH pointed out that from the time when the Dissolution Judgment was issued and when Kamil learnt of it (in December 2023), until the filing of the Dissolution Appeal on 24 May 2024, and up to the hearing before the Djibouti CA on 26 February 2025, DPWD had more than adequate time to ascertain the relevant evidence and to prepare its case on service, if it had wanted to do so.

132.  In fact, DPWD did use the opportunity to make submissions to the Djibouti CA, that service on the Public Prosecutor was inadequate. On the timing of the Appeal, DPWD had already pointed out in its Submissions of 11 December 2024 that it had not been served with the Dissolution Judgment in accordance with the Code, and that the necessary documents had to be dispatched directly to the court of the district in which the person to be notified resides (in accordance with the Riyadh Arab Agreement for Judicial Cooperation), with the necessary proof of service.

133.  The New Evidence only establishes, from the official sources, the relevant dates of the deliveries to the respective entities within Djibouti and the UAE, which evidence could have been used by either the Public Prosecutor or DPWD to support their arguments, if they so wished, at the 26 February 2025 hearing. They did not raise any new points regarding the mode of service adopted, and in any event, Kamil for DPWD could have sought an adjournment to address the New Evidence if that was really necessary, but he chose not to do so.

134.  In all the circumstances, CMPH contends and I agree that the Djibouti CA was entitled not to seek further submissions from the parties, and on the basis of the evidence presented, to reject the Public Prosecutor’s case on the effective date of service, and to adopt the date of 23 January 2024 as the effective date, for the purposes of calculating whether the filing of the Dissolution Appeal was within time. As Lord Diplock observed at p 369C-E of the judgment in Hoffman-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295:

“My Lords, upon the only evidence that is before your Lordships the appellants were given every opportunity to put their case before the commission both orally and in writing. Their case was that it was in the public interest that they should go on fixing prices on the same basis as they had done before, but any other basis would be unfair to them and that they were not going to help the commission to find one. The commission for reasons that are set out in its report rejected the appellants’ arguments. Even in judicial proceedings in a court of law, once a fair hearing has been given to the rival cases presented by the parties the rules of natural justice do not require the decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticizing his mental processes before he reaches a final decision.” (Emphasis added)

135.  Whether the Djibouti CA was correct, in finding the effective date of service to be 23 January 2024 under the relevant and applicable provisions of the Djibouti law, is not for review by this Court. It suffices to say that it does not appear to me to be an error which is so manifestly wrong or fundamentally unfair to be evidence of bias or lack of bona fide on the part of the Djibouti Court.

136.  I also accept the submissions made for CMPH, that the Plaintiffs have not established that they had suffered any prejudice, by identifying any evidence which they could have filed, which could have materially affected the outcome of the Dissolution Appeal. They had already made their case, that DPWD had not actually received the Dissolution Judgment, and even upon the New Evidence, they would have continued to argue that the date of service should be the actual date of DPWD’s receipt, and this would still have been rejected by the Djibouti CA.

137.  As for the point that the 26 February 2025 hearing had been listed for “written submissions … possible oral submissions”, and that somehow the Plaintiffs had been surprised when the Djibouti CA pronounced its judgment at the end of the hearing, the Djibouti CA had (on the evidence) already indicated as early as at the hearing on 22 January 2025 that the matter was reserved for decision, at the next hearing then scheduled on 5 February 2025. If the complaint is that Kamil had not anticipated the need for oral submissions on 26 February, that is also misconceived, when the Role for the 26 February 2025 hearing stated that it was for “possible oral submissions”.

138.  Having found that the Dissolution Judgment should not be recognized, the other points raised by the Plaintiffs against the Dissolution Judgment do not have to be dealt with, but I will do so briefly.

Locus of Administrator/absence of grounds to seek dissolution

139.  The Plaintiffs claim that the Dissolution Proceedings were initiated by the Administrator, purportedly on behalf of DCT, but DCT and the Administrator had no locus to seek the dissolution of the company itself under Article 301-27 of the Djibouti Commercial Code (“Commercial Code”). It was also contended that in the Dissolution Judgment, the Djibouti CFI did not refer to either the Administrator or DCT as “an interested party”, which was the rationale put forward by CMPH’s expert to justify the Dissolution Judgment.

140.  In the Dissolution Judgment, the Djibouti CFI referred to Article 301-27 of the Commercial Code, which provides (inter alia) for early dissolution of a company “ordered by the court upon a member’s application for good cause, notably for breach of his obligations by a member, or for disagreement between the members which paralyzes the functioning of the company”. The Court also referred to Article 315-138 of the Commercial Court, which provide that the court may, on an application filed by an interested party, order the dissolution of a company, where the number of its shareholders is reduced to less than 7 for more than a year.

141.  The Djibouti CFI then observed as follows:

“In the absence of a meeting of the general meeting, such as in the case where this general meeting was not able to validly deliberate upon the last convening, any interested party may apply for the dissolution of the company in court….

In this case, it is clear from the documents in the file that Doraleh Container Terminal has been effected by a paralysis in the functioning of its management bodies for five (05) years now. In this case, three proceedings involving DCT are currently pending before the Djibouti courts, two of which concern the appointment of the provisional administrator.

Similarly, it is established that since her appointment as provisional administrator, she has never been able to fully perform her duties, since the shareholder DPWD has systematically refused to remit the accounting documents she requested and challenged her appointment.

It follows that the shareholders of the said company do not live in harmony and that this situation seriously undermines the affectio societatis, an essential element of the social contract.

In these circumstances, it is appropriate to dissolve Doraleh Container Terminal S.A. in accordance with the provisions of the above-mentioned article 301-27.5 for good cause.” (Emphases added)

142.  CMPH’s expert pointed out that Article 301-27(5) is not the only ground to seek the dissolution of a company, and that the Djibouti CFI had correctly referred to Article 315-139 as a ground for a dissolution order to be made, upon the application of any interested party.

143.  The Djibouti CFI referred in its judgment to the unsatisfactory state of DCL being dormant and in paralysis for 5 years due to the dispute amongst the shareholders and DPWD’s refusal to accept the appointment of the Administrator over DCT. It considered that to be a “good cause” to exercise the court’s power to order an early dissolution of DCL under Article 301-27 of the Code. Whether this is permissible under Djibouti law, whether the actual grounds for dissolution were made out on the facts, and whether the Djibouti CFI was correct in making the order, are not for review by this Court. As Counsel for the Defendant submitted, this Court must assume that the procedure of the foreign court had been properly followed (Jacobson v Frachon (1927) 138 LT 386) and that the court dealing with the case had followed its own procedure and rightly carried out the system which it is the duty of the foreign court to follow. In any event, my finding is that any error is not so manifestly wrong or fundamentally unfair to be evidence of bias or to demonstrate lack of bona fide on the part of the Djibouti court, to entitle this Court to refuse recognition of the Dissolution Judgment.

Dissolution of DCT should be arbitrated

144.  On the Plaintiffs’ case, under the JVA between DPWD and PAID relating to the corporate affairs of DCT, any dispute between the shareholders should be referred to arbitration pursuant to article 20.3. The Djibouti court therefore does not have jurisdiction to rule on and to order the dissolution of DCT as a result of any dispute between the shareholders.

145.  The JVA is governed by Djibouti law. According to CMPH’s expert, the Code states that “it is not possible to conclude arbitration clauses on questions of personal status and capacity … disputes concerning the State … and, more generally, in all matters of public policy” (Article L 710-3). The Code further states that any arbitration agreement is null and void if it is not authorized by Djibouti law.

146.  Counsel for the Defendant drew analogy with the position in Hong Kong, where the winding up or dissolution of companies have been held to be non-arbitrable (citing Re Quiksilver Glorious Sun JV Ltd [2014] 4 HKLRD 759, paras 14 & 18). I am not satisfied that the decision entirely assists CMPH’s case here, as the Court in Quiksilver did find that in a case of a just and equitable winding up petition, (as opposed to a winding up petition on the grounds of insolvency) the dispute on the conduct of a shareholder and whether it is inconsistent with the terms of the shareholders agreement is a dispute which only concerns the shareholders, and can be determined by an arbitrator. The Court only has to decide whether to make the winding up order, after the factual dispute on conduct has been determined in the arbitration.

147.  However, if there was any aspect of the Dissolution Proceedings which could be referred to arbitration, it can only be said that the Djibouti CFI made an error of law in not recognizing that the matter was arbitrable. I do not accept that it is sufficient to show mala fide, or bias.

148.  I accept the submissions made by CMPH, that the dissolution of DCT concerns its “personal status and capacity”, and its existence as a legal entity. The status of the person or entity includes his/its domestic, corporate, official or civic status or position (Spencer Bower and Handley – Res Judicata (6^th Edition) paras 10.01 and 10.06) and can be the subject of a decision in rem, to bind the entire world. Hence, an order for the winding up of a company is a judgment in rem as it concerns the status of a company (Spencer Bower para 10.09). On that premise, the dissolution of DCT is not arbitrable under the Code.

149.  Further, the dispute between DPWD and PAID, the holder of the majority of 66.66% of the shares of DCT for the Republic, is a dispute concerning the State of Djibouti, and renders the dissolution of DCT to fall within Article L 710-3 of the Code.

150.  CMPH further argued that a dispute concerning the dissolution of DCT of which the Republic is a shareholder is a matter of Djibouti public policy. On the expert evidence, as a matter of Djibouti law, an arbitration agreement concerning dissolution of DCT which comes within the ambit of Article L 710-3 would be null and void, and the Dissolution Proceedings cannot be referred to arbitration. I accept their submissions, and find that section 3 of the Foreign Judgments (Restrictions on Recognition and Enforcement) Ordinance does not apply to exclude recognition of the Dissolution Judgment.

Dissolution a reserved matter under JVA

151.  According to the Plaintiffs, Clause 11.1 of the JVA provides that the dissolution of DCT was a “reserved matter” which could not have been pursued without the consent of DPWD. The relevant provisions of the JVA provide for a procedure for passing shareholders’ resolutions whereby DPWD, despite being the minority shareholder, is given a carrying vote, and “reserved matters” under the JVA include any act whereby DCT “may be liquidated, dissolved or wound up”. On the Plaintiffs’ case, as no resolution had been passed with DPWD’s vote, the Administrator had no power at all to cause DCT to apply for its own dissolution, as it transpired in the Dissolution Proceedings.

152.  Clause 11.1 of the JVA and Article 42A of the Articles, on their plain reading, support the Plaintiffs’ case that the shareholders have agreed that “Reserved Matters” include any application for the appointment of a receiver or an administrator over the assets of DCT, any resolution for dissolving DCT, and any act whereby DCT may be dissolved or wound up. The JVA (clause 8.5 and clause 9.3) and the Articles (Article 42A) provide for how the directors and the shareholders are to vote on the Reserved Matters, namely in accordance with the proposal of the DPW shareholders.

153.  I agree with Counsel for the Plaintiffs, that it cannot be discerned from Fage 4 (the expert report filed for CMPH) how and why the dissolution of DCT is a matter which falls within the category of matters which can be decided by the board, and not the shareholders. Mahamoud 4 (also CMPH’s expert) expressed the contrary view, when she opined that the provisional administrator appointed for DCT cannot make decisions which fall within the competence of the general meeting, and cited the dissolution of DCT as one such matter.

154.  However, CMPH relies on the fact that the mechanism contained in Article 42A has been annulled by the Djibouti CFI under the Articles CFI Judgment (ie the Resolution Nullity Ground), which decision was affirmed by the Articles CA Judgment. On CMPH’s case, these Djibouti judgments should be recognized by the Hong Kong Court and I accept this submission (as elaborated below).

The Resolution Nullity Ground

155.  The Plaintiffs’ case is that Deacons’ authority to commence these proceedings on behalf and on the instructions of DCT on 20 August 2018 was expressly and properly conferred by the board of directors of DCT pursuant to the 18 February 2018 Resolution. They maintain that there is no evidence that the meeting at which the 18 February 2018 Resolution was passed was inquorate, or convened without due notice.

156.  CMPH relies on the Articles CFI Judgment and the Articles CA Judgment, to contend that the 18 February 2018 Resolution has been declared a nullity. The Plaintiffs maintain that these judgments should be disregarded by the Hong Kong Court, because they do not give rise to any issue estoppel when there is no mutuality of parties, and are further inadmissible as evidence of the conclusions found by the Djibouti courts. The Plaintiffs further argued that neither the Articles CFI Judgment nor the Articles CA Judgment laid down any principle of Djibouti law, to constitute evidence of foreign law. There is no analysis or explanation in the Djibouti judgments as to why, under Djibouti law, the agreement between the shareholders of DCT as to how they and the directors nominated by them are to vote is against Djibouti public policy.

157.  The Articles CA judgment is the subject of further appeal to the Djibouti Supreme Court, but on CMPH’s evidence, a judgment of the Djibouti CA under appeal is enforceable under the Code unless there is a specific order to the contrary. It was highlighted that there was no application made for a stay of execution of the Articles CA Judgment.

158.  According CMPH’s expert evidence (Fage 2 and Fatouma 5), the nullity of the 18 February 2018 Resolution (by virtue of the Articles CFI Judgment) has retrospective effect, as if the resolution had never existed, and that such nullity can be relied upon by a third party, such as CMPH in this case.

159.  The Plaintiffs contend that the Articles CFI Judgment and the Articles CA Judgment are plainly wrong. The dispute as to the validity of the 18 February 2018 Resolution falls within the scope of the arbitration clauses in the Articles of DCT and in the JVA between the shareholders, and should have been submitted to arbitration. According to the Plaintiffs, the Djibouti courts simply had no jurisdiction to declare the 2018 Board Resolution as null and void. The Plaintiffs further claim that the Republic was not a shareholder of DCT and lacked any standing to nullify the 2018 Board Resolution or to seek a declaration that it was invalid.

160.  In respect of jurisdiction, the Djibouti CFI considered that the Articles Proceedings had been commenced by the Republic, to declare unwritten the clauses contained in the Articles relating to the votes of shareholders and directors, and that the arbitration agreement contained in DCT’s Articles did not bind the Republic. The Djibouti Court pointed out that the Republic became a shareholder of DCT by virtue of the Presidential Order dated 9 September 2018, and this was after the Articles of DCT were signed in May 2017. According to the Djibouti CFI, the Republic was not a shareholder of DCT at the date when the arbitration agreement contained in the Articles was made, and was not a party thereto to be bound by it. It further considered that the arbitration which had been commenced by DPWD against PDSA (for breach of the JVA and the Articles) was a dispute between DPWD and PDSA as shareholders, which was radically different from the Djibouti Articles Proceedings commenced by the Republic, against DPWD as a shareholder and DCT as the company.

161.  Considering the matter objectively, I cannot agree that there is any basis for this Court to find that the Djibouti CFI was so patently or manifestly wrong in its conclusions on jurisdiction, to constitute evidence of bias or lack of bona fide and entitle this Court to refuse recognition of its judgment. The evidence of CMPH’s expert (outlined in the preceding paragraphs of this Decision) as to arbitration agreements on disputes concerning the state of Djibouti (which I have accepted) is also relevant, in the consideration of whether the dispute over the validity of the Articles can be arbitrated.

162.  On the merits of the issues raised in the Articles Proceedings, the Djibouti CFI considered the provisions of the Articles which govern the voting rights of the directors and shareholders of DCT, and in summary, found that the provisions were too wide in terms of the restrictions imposed on the voting powers of the directors and the shareholders, to the extent that it resulted in the majority shareholder’s loss of the freedom to assess, vote and decide on a wide range of matters which affect the operation or existence of the company, so as to deprive the majority shareholder of its decision making power. According to the Articles CFI Judgment, this was contrary to and a breach of the provisions of the Code, such that the relevant Articles should be unwritten.

163.  The Djibouti CFI set out its analysis and the reasons for its judgment, as follows:

“The State of Djibouti argues that, by virtue of Article 21.5, the Board of Directors must vote as the shareholder DPWD wants it to on all questions which relate to “Reserved Matters” which are decided by DPWD pursuant to the Doraleh terminal management agreement or which require a majority other than a simple majority in order to be adopted, and that therefore neither the director representing the majority shareholder nor the board have any room for manoeuvre and are bound by the decisions taken internally by the DP WORLD group.

DP WORLD DJIBOUTI (DPWD) argues on the contrary that the provisions relating to directors’ votes in the articles of association are limited to questions relating to the Reserved Matters as defined by the JVA and to matters decided by the Manager under the Agreement, and that this is a special (and not general) voting agreement drawn up in this way to enable the directors to decide on certain key points of the company’s life in accordance with the instructions of the director having the greatest competence in managing port infrastructures, i.e. DP WORLD DJIBOUTI.

Whereas, as the claimant points out, according to academic legal opinion, the validity of voting agreements within a board of directors must be assessed not only with regard to the company’s interests but also with regard to the deliberative principle. Accordingly, general voting agreements are prohibited. However, where the commitment relates to a specific matter, its validity depends on its subject-matter and in particular on whether it is in the company’s interests.

In the present case, the list of Reserved Matters which appears in clause 11 of the shareholders’ agreement is relatively large and includes matters as diverse as alterations to the articles of association, any change of activity, approval and alteration of the business plan, approval of the accounts, putting guarantees in place, any decision relating to a substantial change to the infrastructure of the Doraleh terminal or the decision to bring any legal or arbitration proceedings.

Whereas it is not disputed that, given the wide range of decisions covered by the Reserved Matters, the obligation to vote in line with the wishes of the shareholder DPWD prevents the directors from forming, from time to time, an opinion on the company's interests according to their own conscience and then expressing it in accordance with the deliberative principle” (Emphases added)

164.  In relation to Article 42A, the Djibouti CFI explained:

“As regards the provisions governing shareholders’ voting, article 42A of the articles of association, relating to “Reserved Matters and recommendations by the Manager” obliges the shareholder PDSA to align its vote with that of the shareholder DP WORLD DJIBOUTI in certain cases:

42A.1: “Any matters requiring an Extraordinary General Meeting and any Reserved Matters shall be decided only by means of a vote and shall be deemed to have been adopted only if the DPW Shareholders have voted in favour of such resolution. If the DPW Shareholders submit such a Reserved Matter for consideration by the Extraordinary General Meeting, the Government Shareholders shall vote in favour of the DPW Shareholders’ proposal.

42A.2: Furthermore, if the DPW Shareholders wish to exercise their right of veto concerning any resolution in particular, the Government Shareholders shall cast their votes in the same way as the DPW Shareholders.

42A.3: Where the Shareholders have expressly agreed, with regard to the Reserve Matters, to cast [their votes] as Shareholders in a certain way, the Shareholders shall vote strictly in accordance with such express agreement.

42A.4: The Shareholders agree that when the Manager makes any recommendation on any matter concerning the operation and management of the Doraleh Container Terminal and such matter is submitted to the Extraordinary General Meeting they shall cast their votes in accordance with the Manager’s recommendations, subject at all times to the Governing Laws.”

The State of Djibouti argues that the scope of this article is extremely wide, which prevents the majority shareholder from freely exercising the political rights attached to its share and therefore results in a general and permanent waiver of its right to vote. DP WORLD DJIBOUTI, for its part, asserts that article 42A of DCT’s articles of association in no way prevents the shareholder PDSA from participating in decision-making and does not deprive it of either its right to vote or its right to attend general meetings. According to DP WORLD DJIBOUTI, article 42A is, on the contrary, limited to indicating a voting direction in certain specific cases which are known in advance, in the corporate interests of DCT.

Article 1985 para. 1 of the Civil Code provides that “any shareholder has the right to participate in collective decisions”.

Article L. 315-86 of the Civil Code also provides that “any shareholder may participate at extraordinary general meetings. Any clause to the contrary shall be deemed unwritten”.

And whereas voting agreements are valid in principle. Such validity is based on the principle of freedom to contract, according to which, even where companies are involved, anything that is not prohibited is permitted. Thus, agreements that are not contrary to the interests of the company are valid provided they do not adversely affect either the shareholders’ essential rights or the fundamental principles concerning the organisation of companies. As the right to participate in collective decisions is a matter of public policy, articles of association cannot derogate from it and shall be null if they do so.

And whereas in this regard, it is not disputed that article 42A of DCT’s articles of association does not prevent the shareholder PDSA (today the State of Djibouti) from attending and voting at general meetings.

Nevertheless, the provisions of article 42A are not limited to indicating a voting direction in certain specific cases; rather, they instruct the majority shareholder generally to vote in a specific way on a whole series of decisions that are essential to the life of the company, including the scope of the Reserved Matters and the powers of the extraordinary general meeting.

And whereas, therefore, it can legitimately be argued that this general voting commitment, which is not limited to a specific operation or transaction, could lead to the majority shareholder losing any freedom to vote and being unable freely to assess and decide on the resolutions submitted to a vote at the general meeting, thus being deprived of its decision-making power.

Consequently, article 42A of the Articles of Association must be deemed unwritten.”

165.  Without any pressure to exercise restraint due purely to considerations of comity, I find that there is no basis to rule that the Articles CFI Judgment is wrong in law, or so manifestly erroneous and fundamentally unfair as to constitute evidence of bias, or lack of bona fide on the part of the Djibouti courts. As highlighted in the judgment above, the Djibouti Court explained that due to freedom of contract, parties may agree on how they may vote, but considerations of whether the voting agreement may be against the interests of the company, or may adversely affect shareholders’ essential rights, are relevant to the Djibouti Court as they are matters of public policy. The Djibouti Court is in my judgment entitled to take these matters into account which deciding whether the Articles are valid. In particular, it is the Djibouti Court which is in the best position to consider matters of Djibouti public policies, and the Djibouti CFI has adequately explained why in its view the restrictions contained in the Articles of the Djibouti company are against Djibouti public policy.

166.  I accept that the Articles CFI and CA Judgments are admissible as to the Djibouti courts’ findings on Djibouti law as to the effect of the voting agreement set out in the Articles of DCT, and I am prepared to recognize their effect, as propounded by CMPH’s experts. According to these experts, since the Djibouti CFI ruled that the 18 February 2018 Resolution was null, the nullity has retrospective effect, and the position is as if the 18 February 2018 Resolution had never existed.

167.  Even if it can be said that the initial commencement of this action by DCT was authorized as at 20 August 2018, the action brought in the name of DCT must, in my judgment, have ceased to be authorized as from the date of the Articles CFI Judgment, on 31 December 2019. Thereafter, any further conduct, and any new act or step required to be taken by Deacons engaged in the name of DCT must require instructions and consent from persons authorized to act for DCT - which, after 31 December 2019 (if not before), can only be the Administrator under and by virtue of the Appointment Order made on 27 September 2018.

The Administrator Ground

168.  By way of recap, the Republic applied to the Djibouti CFI on 26 September 2018, for the appointment of a provisional administrator of DCT to replace the DCT board (“Appointment Order”), in view of the dispute between the shareholders of DCT and the company. An ex parte order was made on 27 September 2018, although DCT was thereafter summoned on 11 October 2018, and submissions were subsequently filed by both DCT and the Republic before the judgment of the Djibouti CFI was issued. By that judgment, the Djibouti CFI ruled that the Court had power to make the initial Appointment Order in an expedited manner, because of the “extreme urgency that prevailed” in the case.

169.  The Djibouti CFI pointed out that pursuant to the Presidential Order made on 9 September 2018, the shares held by PAID in DCT had been transferred to the Republic, which became the majority shareholder with 66.66% of the shares in the capital of DCT. On that basis, the Djibouti CFI found that the Republic had a personal and legitimate interest in taking legal action to seek the resolution of the dispute between DCT and its co-shareholder, to fall within Article 231-3 of the Code, as a party having “a legitimate interest in the success or rejection of its claim” in the legal action taken, in respect of its request for the appointment of a provisional administrator.

170.  The Djibouti CFI rejected the argument made by DCT, that the transfer of shares between PAID and the Republic was made in violation of the provisions of the Articles of DCT and the relevant shareholders agreement. The Court held that the shareholders agreement was signed by PAID, and not by the Republic, such that the Republic was not bound thereby. The Djibouti CFI further found that the shareholders agreement had already been terminated by the Presidential Order before the Republic became a shareholder.

171.  According to the Djibouti CFI, Djibouti case law is that the Djibouti court could interfere in the management of a company when there is paralysis of the corporate body and the presence of an imminent danger for the company. Considering the conflicts which had existed between the shareholders of DCT and the fact that they “threaten the sustainability of the company” and “endanger the interests of DCT”, the Djibouti CFI found that the appointment of a provisional administrator for DCT was necessary, in order to protect the corporate interests of DCT.

172.  The decision of the Djibouti CFI was affirmed on appeal, which found that the objections based on the expedited summary procedure involved in the appointment of the provisional administrator, without notice to DCT/DPWD, were unfounded as it was authorized under the Code, and DCT had been given the opportunity to appear and to make submissions at the hearing. The Djibouti CA also found that the Republic had the capacity and right to take legal action, as it had become the majority shareholder of DCT, and the request for the appointment of administrator was in circumstances of “serious problems preventing the proper functioning of the company”, and when the Republic was in open conflict with DPWD.

173.  I can find no basis to rule that the judgments of the Djibouti CFI and the Djibouti CA on the appointment of the provisional arbitrator for DCT are wrong. The procedural complaint should be and was raised in the appeal, and it was dealt with by the Djibouti CA. The procedure adopted is not in fact dissimilar to the procedure in Hong Kong, of an ex parte order being made in circumstances of urgency, which is followed by an inter partes hearing and determination by the court after hearing both parties. I do not find the procedure to be either shocking or unconscionable to constitute a denial of the principles of natural or substantial justice.

174.  The Djibouti CFI and the Djibouti CA gave valid reasons for the making of the Appointment Order. It can easily be appreciated that the Republic had an interest in putting an end to the dispute between it (after it became the majority shareholder) and DPWD and the DCT board, as the dispute and lack of cooperation between the parties conceivably had effect on the effective operation and management of the Terminal and the port facilities of the Republic (the purpose for which DCT was set up as the joint venture company). The appointment of the provisional liquidator would have the effect of replacing the board and taking over control of DCT to ensure its continued and effective operations. Circumstances of the dispute and disruption of DCT’s operation were referred to in the judgment of the Djibouti CFI: including the dispute as to the subsistence of the 2004 and 2006 Concessions, and the passing of 18 February 2018 Resolution which authorized DCT’s commencement of legal proceedings against the Republic.

175.  The Plaintiffs complained that the Appointment Order was obtained in breach of the English Injunction which restrained PDSA, acting by itself and its “Affiliates”, from causing DCT to act on any of the Reserved Matters provided for in the JVA, which include the appointment of administrators for DCT, without the consent of DPWD. Counsel for the Plaintiffs highlighted the fact that “Affiliates” as used in the English Injunction is defined in the JVA and the Articles, and includes the Republic which was in control of the PDSA.

176.  Counsel for CMPH contended that the restraint under the English Injunction was against PDSA, acting through its directors, officers, and agents, including its Affiliates. It was highlighted that PDSA is a separate corporate entity, with shareholders. There is no evidence that the Republic was acting for PDSA, or that PDSA was “acting through” the Republic, when the application for the Appointment Order was made. The Defendant argued that there was no breach of the English Injunction.

177.  It is relevant that, as Counsel for CMPH pointed out, DPWD did not assert in the Administrator Proceedings before the Djibouti Courts that the Republic’s act of applying for the Appointment Order was in breach of the English Injunction. I accept the submissions made for CMPH, that if there was any issue as to the impropriety of the Appointment Order or of its being in breach of the English Injunction, that should naturally be raised in the Djibouti Administrator Proceedings, and in the proceedings before the English Court, as opposed to its being made the subject matter of complaint before this Court which is being asked to recognize and give effect to the Appointment Order made by the Djibouti court. Counsel for the Defendant relies on the case of Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd [2002] SGHC 176, cited at para 5.82 of Chong and Yip, Singapore Private International Law - Commercial Issues and Practice (2023). The observations made by the learned editors of Singapore Private International Law - Commercial Issues and Practice at para 5.82 were as follows:

“The relevant public policy is of course that of the enforcing forum. That the foreign public policy differs from Singapore public policy does not mean that there has been a breach of the latter. No estoppel arises from a finding by a foreign court that the judgment is against its public policy as the issue before the Singapore court would be whether the judgment is against Singapore public policy, which is a different issue from that considered by the foreign court. However, if a fact which goes towards establishing a breach of Singapore public policy should have been, but was not, raised before the foreign court, it cannot be raised at the recognition and enforcement stage (citing Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd [2002] SGHC 176, [2002] 2 SLR(R) 720).”

178.  In Wu Shun Foods, the Singapore Court refused to strike out an action brought in Singapore to enforce a judgment made in the Republic of China (“ROC”) for money due under a contract for sale and purchase of goods, on the alleged ground that the underlying contract for the import of the goods into ROC was illegal under ROC law. The issue of illegality had not been raised in the ROC proceedings. The Singapore court explained the rationale on the basis that it was not an appellate tribunal vis-à-vis the judgment of the ROC court, and the party should not expect that it omission in raising the illegality issue before the ROC court could be made good in the Singapore courts.

179.  Counsel therefore contended, on behalf of CMPH, that since the Plaintiffs in this case had never even raised the alleged breach of the English Injunction to oppose the Djibouti court’s making of the Appointment Order, they should not be permitted to use the back door approach referred to by the Singapore court in Wu Shun Foods, in an attempt to prevent enforcement of the Appointment Order in Hong Kong, as the Hong Kong court does not sit on appeal from the Djibouti court.

180.  I accept CMPH’s submission and in all the circumstances of this case, I do not consider that the Appointment Order should be refused recognition and enforcement. It is of course open to the Plaintiffs to seek the English court to enforce its injunction in any way as may be appropriate against PDSA, and any Affiliate which may have been in breach thereof.

Effect of the Appointment Order

181.  On CMPH’s case, whether the directors of DPWD have authority to act on behalf of DCT in these proceedings is a question of Djibouti law governing the internal management of a company incorporated under the laws of Djibouti, the power of its directors, and the appointment of the Administrator in Djibouti. Additionally, the relationship between Deacons as the solicitors and agents in Hong Kong and DCT as its principal in the conduct of the Hong Kong proceedings is a matter of agency governed by Hong Kong law, being the law which has the closest connection with the contract of agency and with the act in question (Presentaciones Musicales SA v Secunda [1994] Ch 271).

182.  Counsel for CMPH contended that the appointment of a provisional administrator under Djibouti law is similar to the position of the dissolution of a company and the appointment of a provisional liquidator upon such dissolution, at common law. The directors are divested of their powers, which powers are conferred and thereafter exercisable by the provisional liquidator. The actual authority of all agents of a company is terminated upon dissolution of a company, and those agents who derive their authority from the directors would cease to have any authority to further represent the company. In support of these common law propositions, Counsel cites Bowstead & Reynolds on Agency (23^rd edition, 2023) paras 10-015, 10-018 and Lightman & Moss on the Law of Administrators and Receivers of Companies (6^th edition) para 2-055.

183.  According to CMPH’s experts, the position of a provisional administrator is the same under Djibouti law. The Appointment Order refers to the dispute and conflict between the shareholders of DCT “which may hinder the effective operation of DCT” and states the appointment of Tadoral as provisional administrator “with the mission of exercising the authority granted by law to the management bodies of (DCT)”. The Appointment Order states expressly and specifically that “the provisional administrator will replace the Board of Directors” pending the resolution of the crisis, and that the Appointment Order was enforceable immediately, notwithstanding any appeal or opposition.

184.  The Plaintiffs contend that even if this Court should recognize the Appointment Order as a valid order made by the Djibouti court, the Appointment Order does not by itself divest the DCT directors of all their powers, and the Administrator was not the only person who could authorize the continuation of these proceedings in Hong Kong. Counsel highlighted the fact that the Appointment Order is only an interim order, of temporary effect, pending the resolution of the alleged crisis, and that the Administrator is only a “provisional” one.

185.  It was also contended that the appointment only applies prospectively and takes effect only from the date of the Appointment Order, from 27 September 2018. The Plaintiffs’ expert pointed out that there is no express provision in the Appointment Order that it has any retrospective effect, which provision is required under French law and which Djibouti law follows.

186.  Due to the temporary nature of the Appointment Order, the Plaintiffs further contend that the powers given to the Administrator are more limited than those of the governing body of DCT, and only cover “conservatory measures” and “administrative measures” (according to their expert’s opinion), and that these essentially comprise day to day acts of administration. It was argued that the Administrator could not make decisions or take serious measures that would constitute disposal of the assets of the company, or have “irreversible impact” on DCT or its assets, such as giving up a valuable legal claim as that asserted in these proceedings. It was emphasized that the Administrator herself has not, to date, taken any positive steps to overturn the authorization given by the 18 February 2018 Resolution, or otherwise intervened or taken part in these proceedings. The Plaintiffs highlighted the fact that the Administrator had in fact declined CMPH’s invitation to intervene in this action, and had stated her stance in her letter dated 26 August 2020 to CMPH’s former solicitors (“26/8 Letter”), citing the following:

“Lastly, with regard to my possible participation in the proceedings underway in Hong Kong, as I point out above, the task entrusted to me is provisional and interim in nature. It is incumbent upon me to safeguard the corporate interests of (DCT) and to such end to substitute myself for the board of directors of the company in order to take any management-related decisions which may be necessary; it is not my task to take any decisions which might give rise to considerable costs being incurred by the company and which might be assimilated to a disposal.

This is the reason why I am of the opinion that my intervention in the proceedings ongoing before the Hong Kong courts is not desirable on the date hereof and I believe in any event that it is not in the interests of (DCT) to participate therein. …” (Emphasis added)

187.  Since the Administrator has not taken any steps to overturn Deacons’ authorization based on the 18 February 2018 Resolution, it was contended for the Plaintiffs that the existence of the Appointment Order would not on its own negate the authority previously conferred on Deacons. Counsel for the Plaintiffs pointed out that even the Administrator herself did not consider her powers to be “unlimited”. In her 26/8 Letter, she acknowledged that it was not for her “to make decisions which would constitute a disposal” (of DCT’s assets).

188.  The opinion of CMPH’s expert (in Fage 2) is that:

“The appointment of a provisional administrator has the effect of divesting the directors of the powers of management and legal representation of the company. These powers, which include all authority to bring, defend or continue any action or legal proceedings in the company’s name, are then transferred and divested to the provisional administrator. All of the director’s powers and authorities will cease upon the appointment of the provisional administrator and are brought to an end until the provisional administration is terminated.”

189.  CMPH’s expert on Djibouti law expressed the similar view:

“… The appointment of a provisional administrator results in the suspension of all the powers of the directors of the company. The provisional administrator, vested with the powers that the law confers on company directors, will then have to manage the company in place of the managers/directors for a specified period of time.”

190.  CMPH highlights the fact that the Appointment Order is a judgment in rem, which the Hong Kong Court would recognize and give effect to so long as the Djibouti court has competent jurisdiction over the matter and DCT is incorporated under the laws of Djibouti. Counsel submitted that the Appointment Order which divests the powers of the board, operates ipso facto to revoke the authority of agents appointed by the board to act on behalf of DCT, such as Deacons (Lightman & Moss, para 2-055, Pacific & General Insurance Ltd (in liq) v Home & Overseas Insurance Co Ltd [1997] BCC 400, 408E-H, and Ashborder v Green Gas [2005] EWCA Civ 619, paras 5-7). Once the directors appointing the solicitors are divested of their powers, the authority of the solicitors as the directors’ agent likewise would cease.

191.  There can be no dispute that the powers of the provisional administrator are defined by the order of appointment made by the court. In this case, the mandate and powers of the Appointment Order are wide and general: to replace the board of directors, and to exercise the authority granted by law to the management bodies of the company. Although it is expressed to be an appointment and replacement of the board “pending the resolution of the crisis”, it is clear on the evidence that the dispute and crisis which prompted the making of the Appointment Order has never been resolved, even to date.

192.  Whether the Administrator has power or authority to do an act, and whether the Administrator exercised her power or authority in a manner which is not in the interests of the company, or in breach of her duties, are different matters.

193.  As Counsel for CMPH pointed out, the principal argument made by the Plaintiffs’ expert is that since the appointment of a provisional administrator does not have retrospective effect, there is no need for the Administrator to authorize Deacons to continue to act, because the firm’s “prior authorization remains untouched by the mere fact of the administrator’s appointment” (para 42 of Stoffel-Munch 2). By arguing that the Administrator’s powers are only conservatory and administrative, without any power to “dispose of” DCL’s assets or claims in these proceedings, the contention made for the Plaintiffs is that the Administrator has no power to discontinue or withdraw the Hong Kong proceedings as this may have irreversible impact on DCT, and may even constitute a breach of the Administrator’s duties to DCT.

194.  Even if the Appointment Order does not have any retrospective effect, to “nullify” the initial commencement of these proceedings, I cannot agree that upon the making of the Appointment Order, Deacons’ authority to act for DCT can remain unaffected. When the Appointment Order came into effect, the board of directors was replaced by the Administrator by and under the express provisions of the Appointment Order. Being vested with “all the authority and power granted by law to the management body” of DCT, the Administrator thereafter has the power and authority to act for DCT in place of the board, and to exercise the authority and power vested in the board.

195.  In the absence of any express authorization by or delegation of authority from the Administrator, I accept the submissions made for CMPH that, after the Appointment Order of 27 September 2018, the DPWD Directors and Deacons instructed by them had no further authority to act or take any further step in the Hong Kong proceedings on behalf of DCT. For each step taken after the Appointment Order, Deacons had to seek confirmed instructions and authority from the Administrator, because Deacons’ principal, the DPWD directors who were themselves mere agents of DCT, had no further authority or power after the Appointment Order to delegate to, or authorize, their own agents to act for DCT. These steps which require further and proper authority must include the steps taken (after the date of the Appointment Order) to resist CMPH’s application (in December 2018) for stay of these proceedings, appeals therefrom, steps taken in relation to the Authority Summons and the ASI Summonses, and all other substantive steps in the Hong Kong proceedings after 27 September 2018.

196.  The Plaintiffs seek to rely on the 26/8 Letter from the Administrator, to show that she was not prepared to intervene in the Hong Kong proceedings. That cannot mean that Deacons continued to have her authority and consent to continue and pursue the proceedings on behalf of DCT. This was made clear in the 26/8 Letter itself, when the Administrator clearly stated that (despite the challenges to her appointment made by DPWD and the DCT board) she was the “sole duly appointed statutory representative of DCT”, and that none of the former members of the board of DCT was authorized to represent DCT in the context of the Hong Kong proceedings. The Administrator then stated:

“I have furthermore given no instructions to either the firm of Deacons or the firm of Quinn Emanuel Urquhart & Sullivan to represent DCT in the context of any proceedings in Hong Kong. Neither Mr Al Banna nor any one of the former members of the Board of Directors or the former management of DCT has furthermore sought and obtained any approval or authorization from me to instigate any judicial or arbitral proceedings, either in Hong Kong or in any other location, since my appointment on 27 September 2018. The same is true of the firm of Deacons and the firm of Quinn Emanuel Urquhart & Sullivan LLP, so I am unable to understand how they can claim to be representing DCT before the Hong Kong courts.”

Although the Administrator did state in the 26/8 Letter that her task is provisional and interim, and not to make decisions which might amount to a disposal of assets of DCT, the Administrator did continue to state, unequivocally:

“DP World and its counsel must therefore immediately desist from participation in any judicial proceedings in the place and instead of the sole statutory representative of this Djibouti Company and more generally desist from using DCT as a tool for their entirely personal reasons.”

197.  Having been appointed to replace the board, if the Administrator considered that she did not have any power under the Appointment Order to take any step which might fall outside the scope of the daily administration of DCT, or may amount to a disposal of its assets or rights of action, the Administrator must be able to apply to the Djibouti court to authorize such steps, or for any directions as may be required.

198.  The Plaintiffs claim that there might be a state of limbo if, as the Djibouti law expert of CMPH suggests, the instructions from the original directors to Deacons are “suspended”, and the Administrator or any liquidator fails to respond to or take actions in the proceedings for a prolonged period of time.

199.  In my judgment, in such a scenario, and in any case in which DPWD or the directors appointed by DPWD to the board of DCT consider it necessary and in the interests of DCT to do so, they can and should be able to apply to the Djibouti Court for the necessary direction to be given to the Administrator, to authorize any act claimed to be necessary for and in the interests of DCT. The report of the Plaintiffs’ expert stated that a provisional administrator could not take measures that would dispose of the assets of the company, or which may irreversibly impact the company’s assets, “unless specifically authorized by the court”. This shows that the court’s authorization can be sought for any measures or actions to be taken by the Administrator.

200.  However, in the absence of any instructions from the Administrator, I do not accept that Deacons can simply and without risk of challenge continue to act indefinitely, on the basis of the initial authority conferred by the board of DCT in reliance on the 18 February 2018 Resolution. They would simply have to cease acting for DCT for the reason that after 27 September 2018, they no longer had the authority or instructions from the authorised representative of DCT to continue with the conduct of the proceedings, and had not received any instructions from the authorised representative of DCT.

201.  In my judgment, the argument that the Appointment Order has no retrospective effect before 27 September 2018 cannot mean that Deacons can continue to act after 27 September 2018, or that they can continue automatically and indefinitely to take steps in these proceedings in the name of DCT, or to act indefinitely on the basis of the instructions and authorization given in February 2018.

The July 2023 Resolution and its effect

202.  The Administrator Order was made on 27 September 2018.

203.  By its judgment of 31 December 2019, the Djibouti CFI declared Article 42A of DCT’s Articles and the voting mechanism thereunder to be null and void on the ground of public policy, and the 18 February 2018 Resolution to be null as it amounted to performance of an illegal agreement.

204.  On the Plaintiffs’ case, a shareholders’ resolution was passed at DCT’s EGM on 17 July 2023 (“July 2023 Resolution”). The EGM was convened by DPWD, replying on Article 30.3(iii) of DCT’s articles. This provides that general meetings of the company may be called by “one or more Shareholders holding at least one tenth of the Capital of (DCT)”. On the Plaintiffs’ case, it was a measure taken out of prudence, aimed at putting to rest any possible argument that may arise over the validity of the legal proceedings, and the effect of the Appointment Order. The July 2023 Resolution confirmed that:

“ … the legal proceedings before the Hong Kong courts initiated by (DCT) on 20 August 2018 against (the Defendant) (action number HCA 1951/2018 “HK Action”) were, have been, and continue to be duly authorized by (DCT), and that (DCT)’s solicitors in the HK Action, Deacons, were, have been, and continue to be fully authorized to represent (DCT) in the HK Action until final determination of the claims therein (including any appeals).”

205.  According to the Plaintiffs, the July 2023 Resolution has the effect of reconfirming Deacons’ authority to act on behalf of DCL in these proceedings.

206.  CMPH’s case is simple: convening a general meeting is a matter of management which falls within the responsibility of the board, and upon the appointment of the Administrator, this power was divested from the board to the Administrator, such that the EGM convened by DPWD in July 2023 was invalid. CMPH argued that in any event, the notice of EGM should have been, but was not served on the Republic, which had by then already become a shareholder of DCT by virtue of nationalization, and the shares of PDSA had been transferred to the Republic as a result.

207.  CMPH further claims that Article 30 (iii) is void as it is contrary to public order.

208.  Having considered the expert evidence filed on behalf of the parties, I am more inclined to accept CMPH’s case, that the July 2023 Resolution is ineffective.

209.  The EGM at which the July 2023 Resolution was passed was convened by DPWD in its capacity as shareholder holding more than one-tenth of the capital of DCT, pursuant to be Article 30.3 (iii).

210.  As pointed out by Fage in his expert report, Article 225-103 of the French Civil Code provides (in paragraph I) that the general meeting of a company “shall be convened by the board of directors or the management board”.

211.  Article 225-103 goes on to provide, as follows:

“II. Failing that, the general meeting may also be convened:

1. By the auditors;

2. By an agent, appointed in court, at the request, either of an interested party in the event of urgency, or of one or more shareholders representing at least 5% of the share capital or by an association of shareholders in accordance with the conditions set in article L. 225-120;

3. By the liquidators;

4. By the majority shareholders in capital or of voting rights after a public takeover bid or exchange offer, or after the transfer of a controlling block…”(Emphasis added)

212.  The same provisions exist under the Djibouti Commercial Code, in Article 315-78 (paras 119 and 121 of Fatouma 5).

213.  According to Fage’s expert opinion, the above provisions of the French Code are mandatory, are provisions of public order, and cannot be contracted out of. He explained that this is demonstrated by the express language of Article 255-103, and contrasted with paragraph V of the same article, which permits and expressly provides for provisions to be made to the contrary in a company’s articles of Association. Paragraph V states as follows:

“V. Unless otherwise provided in the Articles of Association, shareholders’ meetings shall be held at the registered office or anywhere else within the same district.”

214.  Fage pointed out that no qualification appears in paragraph II of Article 225-103 which governs the means of convening a general meeting, in the event that the board fails to do so. According to Fage, the inference is that the means provided for under paragraph II are exhaustive. He accepted that there is no decision of the French courts as to whether Article 225-103 is of public order, but pointed out that the majority of legal scholars support his view. The scholars state the view that Article 225-103 II provides for “exhaustive” derogations to the default rule set out in paragraph I, that the provisions are of “mandatory nature”, and as a rule excludes the possibility of contrary provisions in the articles of association of a company, which allow for a group of shareholders representing a proportion of the capital to directly convene a general meeting.

215.  The Plaintiff’s’ expert disagree that Article 225-103 is a provision of public order. Stoffel-Munck pointed out that paragraph II does not state that the means are exhaustive, and the language used does not state that the general meeting may “only” be convened by the means set out. He further pointed out that the articles of association of DCL increase and extend the rights of the shareholders, rather than reduce their rights, (in that Article 30.3 (iii) serves to grant shareholders the additional right of convening a general meeting directly without the appointment of a legal representative) such that they should not be considered to fall foul of or be against any rule of public policy intended for the protection of shareholders.

216.  The Plaintiffs’ expert relies on the general statement of French and Djibouti law, that the general meeting is “the highest decision making organ” of a public limited liability company, and that decisions made at general meetings bind all other organs of the company, including the board of directors and, in this case, the Administrator. However, Fage referred in his opinion to what is referred to as the Motte decision made by the French Court of Cassation in 1946. This establishes the familiar principle, that:

“A joint-stock company is a company whose bodies are hierarchical and in which the administration is exercised by a board elected by the general meeting; that it is therefore not for the general meeting to encroach on the prerogatives of the board in matters of administration.” (Emphasis added)

Fage explained that the Motte decision highlights the fact that there is “a clear and precise division of the respective areas of competence between each corporate body”, and that notwithstanding Stoffel-Munck’s focus on shareholders’ meetings being “the highest bodies in the hierarchy of powers of joint-stock companies”, the recognized and correct statement of principle is that shareholders only have power to make decisions that do not fall within the powers conferred by law on the administrative, management or supervisory parties. Shareholders’ meetings therefore cannot encroach on the powers legally conferred on the company’s management parties, and according to Fage, this is in accordance with the principle of hierarchy of bodies as defined by the Motte judgment.

217.  Stoffel-Munck accepts that the court in Motte confirmed that the articles of association of a company may not grant to the shareholders by general assembly powers that are exclusively reserved by mandatory law for the board of directors. He pointed out that in Motte, the shareholders wanted to create an executive committee whose powers were meant to compete with the exclusive rights that statutory law granted to the board of directors, and the Court ruled that that was not possible, but confirmed that the articles may grant to the general assembly “a specific power that was not exclusively attributed to the board of the company”.

218.  With these principles in mind, I accept CMPH’s contention that a company’s authorization of legal representatives to act for it in legal proceedings is not a matter for the general meeting of shareholders. This is irrespective of whether or not Article 225-103 of the French Code is of public order, and whether or not Article 30.3 (iii) of DCL’s Articles is contrary to Djibouti public policy.

219.  I accept Fage’s opinion that the power to convene a general meeting is a matter included in the day to day management of a company, and in principle, a matter which falls within the responsibility of the board of directors. In the case of DCT, the powers of the board of directors had been given to and vested in the Administrator under the Appointment Order, and after the Appointment Order, only the Administrator exercising the powers of the board had the power to convene a general meeting.

220.  In Fage 2, he cited a decision of the French Court of 22 June 2011, involving the appointment of a provisional administrator to replace a manager of a company. During the currency of the administration, a general meeting was purportedly called by a shareholder, and a co-manager was appointed to file an appeal against a conviction of the company. The Court held that the co-manager had no standing to act, since it was the provisional administrator who was vested with the power of administration, direction and representation of the company, and the appointment of a co-manager by the general meeting of the corporation was inoperative.

221.  Stoffel-Munck sought to argue that the shareholders of DCT by general meeting had been granted the exclusive power to decide on “Reserved Matters” which include the authorization of legal representatives to act for DCT. Article 11.1 of the JVA provides for “Reserved Matters”, and paragraph (i) thereof refers to the “initiation or settlement” of any legal or arbitration proceedings or dispute with a value reasonably estimated to be in excess of a defined value.

222.  However, I agree with Counsel for CMPH, that DCT’s shareholders had not by agreement allocated to the general meeting any exclusive power to decide on the Reserved Matters, and in particular, on the general conduct of legal proceedings.

223.  As Counsel for CMPH pointed out, both the board and the shareholders by EGM of DCT have powers in relation to the stated Reserved Matters. Article 23 of DCL’s articles of association provides that “the board shall have the power to determine all Reserved Matters” (as defined). Article 41.2 provides that “the Shareholders at the Extraordinary General Meeting can decide on … (xv) All other matters stated as being Reserved Matters”.

224.  For matters requiring resolution by the EGM, DCT’s articles only identified: the increase of capital, issuance of bonds, increase in the number of directors, and nomination of auditors. There are also Reserved Matters which must be decided by the EGM because a resolution by the board on such matters would be unenforceable under Djibouti law (as provided for in article 21.5).

225.  Pertinently, no one has given any evidence that the general institution or commencement of legal proceedings, or taking steps in such legal proceedings, are matters which would be unenforceable under Djibouti law in the absence of a resolution in general meeting.

226.  I agree and accept the proposition made for CMPH that the provisions of the JVA and DCT’s articles of association (namely Articles 8.5 (c) and 11 of the JVA, and Articles 21 and 23 of the Articles of Association) only grant to DPWD and its nominated directors veto rights in respect of the matters defined as Reserved Matters. Under these provisions, a resolution will only be deemed to be passed, if the directors nominated by DPWD have voted in favor of the resolution, and the shareholders only agreed to procure that. Article 21.5 of the articles of Association state:

“21.5 Valid Resolutions of the Board (…)

ii. in relation to Reserved Matters, the Shareholders hereby agree and undertake that they shall make best endeavours to cause their nominee Directors (whether a meeting or by circulation or by teleconference) to abide by the following procedures, subject to the provisions of Applicable Laws: (…)

b. if such a resolution of the Board in relation to a Reserved Matter procured in compliance with paragraph (i) above is not enforceable under Applicable Laws without a resolution passed at a Shareholder’s Meeting, then the proposal of the Board of Directors on such Reserved Matter shall be referred to a Shareholders’ meeting (…)”

227.  Article 9.3 (a) of the JVA provides for similar rights at the level of shareholders’ meetings.

228.  Fage explained (in Fage 4) that on a proper construction of the articles, the Reserved Matters are a shared competence of the Board of directors and of the EGM. Although DPWD as shareholder was given the right to veto and withhold its consent to any decision on Reserved Matters, the provisions of the articles and the JVA do not in fact grant to DPWD or the general meeting any exclusivity to decide on the Reserved Matters. On the language expressly used in the relevant provisions, I agree. The effect of the articles is simply to confer a right of veto on DPWD.

229.  In my judgment, after the date of the Appointment Order, the Administrator replaced the board of directors (under and by virtue of the express provisions of the Appointment Order), and thereafter had the power to exercise the authority granted by law to the board. As the French Court pointed out in the decision of 22 June 2011, after the appointment of an administrator, it is the administrator who is vested with the powers of administration, direction and representation of the company. The powers of administration and direction included the general conduct and management of legal proceedings commenced in the name of DCT, on day to day basis, and the appointment and authorization of legal representatives to act in the name and on behalf of DCT in such proceedings. The shareholders had no power to usurp the right of the board of directors and the Administrator in its place. DPWD as shareholder had no right or power to convene the EGM nor to pass the July 2023 Resolution. What DPWD could have done was to request the Administrator to convene a meeting to resolve the authorization of Deacons to take further steps for DCL in these proceedings, or to apply to the Djibouti court for appointment of an agent to convene a general meeting if that was what DPWD required. None of this was done.

Conclusion on the Amended Authority Summons

230.  For all the reasons stated above, I find that the continuation and conduct of these proceedings were without the authority of DCT after the appointment of the Administrator, and further allow the Defendant’s application in terms of paragraphs 2, 4, 5 and 6 of the Amended Authority Summons.

The ASI Summonses

231.  Paragraph 40 of this Decision sets out the position of the parties in relation to the ASI Summonses. The matter outstanding is the costs of the applications and their opposition. The 1^st Djibouti Action has come to an end, and there is no need for any injunction. The Defendant further undertook on 1 December 2023 that it would withdraw or apply for a stay of the 2^nd Djibouti Action, and would not rely on any judgment of the Djibouti court for the hearing of the Authority Summons.

232.  The hearing of the Authority Summons and the ASI Summonses has been burdened by voluminous affidavits and written submissions, with a myriad of issues raised for determination. This is partly reflected by the unusual length of this Decision, which deals with only the major and more pertinent issues raised and argued by Counsel. Although the parties have ultimately devoted relatively little time at the hearing on the ASI Summonses, lengthy submissions had been filed to deal with the necessity for the injunctions and on the question of costs, which in turn evolved around the merits of the applications.

233.  I wholeheartedly endorse the observations made by the courts in the decisions of Po Fun Chan v Winnie Cheung (2007) 10 HKFRAR 676 paras 18-21, R v Holderness Borough Council, ex p James Robert Developments Ltd (1992) 66 P&CR 46, 57, and Ersus v London Borough of Redbridge [2016] EWHC 1025 (QB). When a matter is no longer pursued by parties because it is unnecessary or has become academic to do so, it is highly inappropriate and a misuse of the court’s time and public resources to ask the court to decide on costs by dealing with the merits in depth, at a time when the courts are already overburdened, as they are.

234.  In Po Fun Chan, Bokhary PJ stated that a case which has become academic as between the immediate parties should normally proceed no further, and any issue as to costs should be dealt with only “on such an appreciation as can be formed on a broad view of the matter”.

235.  In R v Holderness Borough Council, Simon Brown LJ expressed a similar sentiment with regard to the approach to such costs applications:

“… I would hold to what I said there, namely that “That ordinarily would be a gross misuse of this court’s time and further burden its already over-full list. Not only, moreover, is there the problem of pressures upon the court’s time….I recognise of course that costs applications have to be entertained and resolved. But not, I would suggest, by litigating the case for all the world as if the substantive issues need to be resolved for their own sake. In my judgement an altogether broader approach should be adopted. One which enables the court in a comparatively short time to decide, and decide moreover without giving a fully reasoned judgment, into which general category of discontinuance the case falls.”

236.  Dillon LJ further stated in the same case:

“There may be cases where the substantive question raised in proceedings becomes academic at a very early stage, when the costs incurred by the plaintiff are small. It may then be felt to be unreasonable for the plaintiff to incur the expense and delay of going to a full trial on that academic question, in order to recover the costs. In such a case the court may have jurisdiction to refuse to try the case.”

237.  In Ersus v London Borough of Redbridge, the observations made by Superstone J were as follows:

“In determining this appeal, I have had regard to the following principles. First, as to the ambit of the costs enquiry in the lower court on discontinuance, in R v Liverpool City Council ex p Newman [1992] 5 Admin LR 669, Simon Brown J (as he then was) said at page 671:

‘It would seldom be the case that on discontinuance this court would think it necessary or appropriate to investigate in depth the substantive merits of what had by then become an academic challenge. That ordinarily would be a gross misuse of this court’s time and further burden its already over-full list.’

More recently, in the R (on the application of Scott) v London Borough of Hackney [2009] EWCA Civ 217, Hallett LJ observed that:

‘It will rarely be proportionate to enter into an overtly detailed forensic analysis of the issues and the evidence and assessment of which party would have won or lost on which issue. The discretion is a broad one, and it is exercised in broad fashion.’”

238.  I will accordingly deal with the residual issue of costs as to the ASI Summonses on a broad view of the case, without any in-depth investigation of the substantive merits.

239.  The facts I take into consideration include the following:

(1) The Hong Kong courts have held in this case that Hong Kong is the appropriate forum for the current dispute between the parties. There is no further doubt as to the jurisdiction of the Hong Kong court over all the issues raised in the action.

(2) CMPH itself issued the Authority Summons on 28 February 2023, to seek from the Hong Kong court an order to strike out DCT’s claims for want of authority. It recognises the jurisdiction of this court over the dispute as to authority.

(3) It was only after the issue of the Authority Summons that CMPH applied to the Djibouti Court (by the Djibouti Summons) (and later the 2^nd Djibouti Action) to seek relief from the Djibouti court, to require the DPWD directors to cease giving instructions to Deacons and to cease representing DCT in these Hong Kong proceedings. The Plaintiffs claim that the Djibouti proceedings were vexatious, oppressive and instituted in bad faith, since the Djibouti Summons and the Authority Summons involved the same issues and sought essentially the same relief, from the different courts.

(4) The 2^nd Djibouti Action was an extension of the 1^st Djibouti Action, arising out of the same facts and involving the same issue of authority. The only material difference lies in the fact that the Djibouti Summons in the 1^st Djibouti Action seeks interim injunctive relief, whereas the Writ filed in the 2^nd Djibouti Action seeks final and substantive relief, including damages which CMPH claims it had to preserve from being time-barred.

(5) CMPH claims that the above-described steps taken in Djibouti were only as a result of DPWD’s attempt to convene a general meeting of DCT for the purposes of passing the Proposed Resolution (and the later July 2023 Resolution).

(6) The Plaintiffs claim that the ASI were required to protect the Plaintiffs’ legitimate interest to have the authority issue properly determined in Hong Kong.

(7) The Plaintiffs further claim that at the time when the 2^nd Djibouti Action was commenced, CMPH was already subject to the 28 July HK Order, whereby it was restrained by the Hong Kong Court from taking any steps to pursue the proceedings commenced by the Djibouti Summons, and from commencing any other proceedings in Djibouti or elsewhere in respect of the issue of whether these proceedings were instituted without authority.

(8) CMPH on its part claims that orders from the Djibouti court in the jurisdiction where DCT was incorporated would only assist the Hong Kong Court in its determination of the status of DCT, the validity of the July 2023 Resolution and the authority of the DPWD appointed directors and Deacons. It claims that Djibouti is the natural forum for the issues raised in the Djibouti proceedings and it had a legitimate interest in having the authority issue, which is governed by Djibouti law, to be determined by the Djibouti court.

(9) CMPH maintains that there is no exclusive jurisdiction agreement governing the relationship between the parties, and further, pointed out that the Plaintiffs themselves have litigated matters in Djibouti, by intervening in the Articles Proceedings, challenging the appointment of the Administrator, and appealing to the Djibouti Supreme Court in the relevant proceedings.

(10) The Plaintiffs claim that the Defendant failed to disclose to the Hong Kong Court, at the time of the 28 July HK Order, that it had already commenced or was in the process of serving the Writ in the 2^nd Djibouti Action. On its part, CMPH claims that it had no duty to make such disclosure, and it was not in a position to stop the Bailiff in Djibouti from serving the Writ. CMPH further claims that the disclosure would have made no difference, when the 28 July HK Order already contained a general prohibition against the commencement of other proceedings.

240.  CMPH having issued the Authority Summons to seek determination by the Hong Kong Court of the issue raised, I agree that it was unnecessary and a duplication for the Djibouti applications to have been made. In all the circumstances, the Hong Kong Court would have continued the ASI granted until the determination of the Authority Summons, but for the fact that the injunctions had become unnecessary. The 1^st Djibouti Action had come to an end. CMPH had also undertaken at the hearing before the Hong Kong Court in December 2023 that it would apply for a stay of the 2^nd Djibouti Action, and that it would not rely on or refer to any judgment of the Djibouti Court which may arise from the 2^nd Djibouti Action for the purpose of the hearing of the Authority Summons in Hong Kong. Essentially, the Plaintiffs established a prima facie entitlement to the ASI (apart from the question of DCT’s authority).

241.  In all the circumstances of this case, I would order that the costs of the ASI Summonses should be borne by CMPH. However, I accept the submissions made for CMPH that by 3 August 2023, the Plaintiffs already had knowledge of the Djibouti Interim Decision (of 31 July 2023), and yet they obtained directions for the filing of evidence, and in fact filed extensive evidence in reply on the 1^st ASI Summons. I will not allow any costs of the 1^st ASI Summons incurred after 3 August 2023, as they were unreasonable and disproportionate.

242.  As events transpired, the hearing and determination of the ASI Summonses took place at the same time as the Authority Summons. The costs of the ASI Summonses incurred for DCT would be affected by the costs order made on the Amended Authority Summons.

243.  All costs orders are made with Certificate for 3 Counsel, and include costs of the relevant applications as were reserved.