STARLIGHT EXPORTS LTD and STAR LIGHT ELECTRONICS CO LTD V. CTO (H.K.) LTD

HCCW 535/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) NO. 535 OF 2006

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J U D G M E N T

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1.  This is a petition to wind up CTO (HK) Limited (“the Company”) by Starlight Exports Limited and Star Light Electronics Company Limited.  The petition is founded on a judgment debt of US$859,275.00 obtained by the petitioners against the Company in HCCL No. 55 of 2004 on 19 July 2006. 

2.  The Company had issued three bills of lading to the petitioners to cover the shipment of electronic goods from Hong Kong to Naples.

3.  The Company’s agent in Italy, CTO (Italia) SRL (“CTO Italia”), released the goods to the notify party in Naples without production of either the old or new bills of lading.  Hence, the petitioners claimed the value of the goods as damages for wrongful delivery by the Company of the goods.

4.  On 26 July 2006, a demand for the judgment debt was served on the Company.  This petition was presented on 28 September 2006.

5.  After judgment was obtained against the Company in the High Court Action, on 3 August 2006, the Company brought proceedings for damages in the Civil Court of Milan against its agent CTO Italia and the notify party to the bill of lading, Hilevel Consumer Italia SpA (“Hilevel”).  On 25 October 2006, the Company brought another action for damages in the Civil Court of Milan against its Italian agent and Hilevel for the same relief.

6.  Both actions were heard on 19 November 2006 and on 9 December 2006, the Italian Court gave judgment that CTO Italia is to pay the Company the amount claimed being US$859,275.00 on the basis of the judgment in Hong Kong and that Hilevel is liable to indemnify CTO Italia of the same sums the latter must pay the Company.

7.  The petition first came before this court on 18 December 2006.  It was adjourned to 22 January 2007, in view of the enforcement proceedings issued by CTO Italia against Hilevel in January 2007.  Thereafter the petition was further adjourned for 3 months to 23 April 2007.  On the last occasion, when the petition came before Reyes J, he granted a further short adjournment to today to give the Company the final opportunity to pay up the petitioning debt.

8.  It would appear from the letter dated 18 April 2007 of the lawyers in Italy exhibited to the affirmation of the Company’s solicitors that CTO Italia had applied for the attachment of sums belonging to Hilevel in various bank accounts, with the objective to have funds frozen up to an amount sufficient to satisfy the judgment sum, and Hilevel is trying to oppose the execution proceedings before the Court of Naples.

9.  The Italian lawyers further stated that under Italian law, the attachment proceedings are “rather complex and lengthy”.  A further letter from the same lawyers dated 4 May 2007 was placed before this court.  It does not appear from the latest letter that any significant progress has been made in the attachment proceedings and that a definite outcome may not be expected earlier than the end of June.

10.  The petitioners’ counsel seek an order to wind up the Company today.  I see no reason not to make a winding-up order.  The Company has been given sufficient opportunity to satisfy the judgment debt.  If in the event sufficient sums should be recoverable from CTO Italia or Hilevel as a result of the attachment proceedings in Italy, an appropriate application could then be made to this court to stay the winding-up order permanently.  I order the petitioners’ costs in these proceedings to be paid out of the Company’s assets.