香港石油化學有限公司 v. 廣東廣物香港有限公司

HCA 2363/2025

[2026] HKCFI 4573

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2363 OF 2025

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DECISION

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INTRODUCTION

1.  This is the application of 香港石油化學有限公司 (the “Plaintiff”) for summary judgment against 廣東廣物香港有限公司 (the “Defendant”). The Plaintiff applies for (a) a declaration that all disputes and claims arising out of, in connection with or relating to the five contracts identified in the Schedule to its summons (the “Summons”) (“5 Contracts” / “Settled Claims”) have been fully and finally settled, resolved and compromised pursuant to the Settlement Deed concluded on 29 July 2024 (the “Settlement Deed”); (ii) a prohibitory injunction restraining the Defendant from progressing the arbitration commenced before the Guangzhou Arbitration Commission under Case No (2025) 穗仲案字第9728號 (the “GZ Arbitration”) or any other proceedings on the Settled Claims; (iii) a mandatory injunction requiring the Defendant to withdraw and/or terminate the GZ Arbitration; and (iv) damages, interest and costs.

MATERIAL FACTS

2.  The Plaintiff’s case is very simple. It basically says the Defendant has submitted itself to the adjudication process under the Plaintiff’s insolvency regime and as such it is bound by the adjudication of its claims and cannot reopen the underlying disputes in other forums, including the GZ Arbitration.

3.  It is common ground that the Defendant submitted a proof of debt (“POD”) in the Plaintiff’s Hong Kong court-sanctioned scheme of arrangement (the “Scheme”), participated in the Scheme’s adjudication procedure, and saw its claim rejected by the Scheme administrators (the “Scheme Administrators”) on the footing that the claim had been compromised by Settlement Deed.

4.  Nonetheless, being dissatisfied with the adjudication, the Defendant has continued to prosecute the GZ Arbitration advancing precisely the same claim.

5.  The Plaintiff’s case is that:

(1)  First, the Defendant’s claim advanced in the GZ Arbitration is indistinguishable from the claim it advanced and lost in the Scheme. The Scheme Administrators’ adjudication of that claim was rendered, in accordance with the Scheme terms, final and binding. The Court should respect and give effect to the Scheme - a court-sanctioned compromise governed by Hong Kong law - and to the Scheme Administrators’ determination thereunder.

(2)  Secondly, by submitting a proof of debt under the Scheme, the Defendant submitted to the Scheme’s jurisdiction and is bound by all consequences of that submission, including the exclusive jurisdiction of the Hong Kong court conferred by Clause 11.3 of the Scheme and the finality of the Scheme Administrators’ adjudication. Having taken the benefit of participation, the Defendant cannot now repudiate its burden by relitigating the same dispute in another forum.

(3)  The Court need not, in the first instance, construe the Settlement Deed for itself: the Scheme Administrators’ determination is final. But if the Court is invited to do so, on the proper and orthodox construction of the Settlement Deed (and in particular Clauses 5, 7 and 9), the parties agreed in clear and unambiguous terms to the full and final settlement of all disputes and all matters “relating to” the 5 Contracts and to the exclusive jurisdiction of the Hong Kong court. The Settled Claims fall squarely within that release.

6.  The Plaintiff is a Hong Kong-incorporated company formerly engaged in the manufacture and trading of petrochemical products and the provision of subcontracted processing services.

7.  The Defendant is a Hong Kong-incorporated company controlled by a state-owned enterprise of the Guangdong provincial government. It was, at all material times, a supplier of raw materials (styrene) for processing by the Plaintiff into polystyrene products.

8.  Between 17 August and 17 October 2023, the Plaintiff and the Defendant entered into five agreements comprising two processing agreements, two supplemental agreements, and a further supplemental agreement. They are collectively the “5 Contracts” in the Settlement Deed and in this application.

9.  Each of the 5 Contracts contained an arbitration clause referring disputes to the Guangzhou Arbitration Commission.

10.  On 10 October 2023, a winding-up petition was presented against the Plaintiff by the Bank of East Asia.

11.  On 20 December 2023, a winding-up order was made against the Plaintiff and two individuals from FTI Consulting (Hong Kong) Limited were appointed as liquidators (the “Liquidators”).

12.  During the liquidation, the Plaintiff’s daily processing operations were suspended and it could not perform certain obligations under the 5 Contracts.

13.  Against that background, on 26 and 29 July 2024 respectively, the Liquidators (for and on behalf of the Plaintiff) and the Defendant executed the Settlement Deed.

14.  The Settlement Deed contains, inter alia, the following critical provisions:

(1)  Recital and definitions: the “Dispute” is defined by reference to the disputes between the parties under or in connection with the 5 Contracts;

(2)  Clause 5 (“Release Clause”): “Both parties agree that this Deed represents the full and final settlement of the Dispute and all matters relating to the 5 Contracts”;

(3)  Clause 7 (“Entire Agreement Clause”): the Settlement Deed contains the entire agreement between the parties; and

(4)  Clause 9 provides for Hong Kong law as the governing law and confers jurisdiction on the Hong Kong court.

15.  Pursuant to and in implementation of the Settlement Deed, the parties on 15 October 2024 entered into a Sale Agreement under which the Plaintiff purchased from the Defendant the residual inventory at the Plaintiff’s premises for RMB 23,138,896, which sale was duly completed in October 2024.

16.  On 30 July 2024, Mr Justice Harris approved the Scheme via which the Plaintiff conducted its debt restructuring. The Scheme became effective on 1 August 2024. The circumstances surrounding the Scheme are explained in the Scheme sanction decision (Re Hong Kong Petrochemical Co Ltd [2024] HKCFI 2601; [2024] 5 HKLRD 124).

17.  The Scheme constitutes a comprehensive contractual regime binding all Scheme Creditors (including the Defendant). The provisions material to the present application may be summarised as follows:

(1)  Clause 3.4 provides:

“With effect from the Effective Date, each of the Creditors discharges and waives all of its Claims against the Company in consideration of the right to participate with each of the other Creditors in the distribution of Scheme Funds pursuant to the terms of the Scheme.”

(2)  Clause 4 provides:

“From the Effective Date, none of the Creditors shall be entitled to demand or exercise any right of set-off against the Company in respect of its Claim, nor be able to seek to recover from the Company by legal process or otherwise, or to take any steps or proceedings against the Company or its assets, for the purpose of enforcing its Claim or recovering any part of its Claim by way of execution or otherwise….”

(3)  The definition of “Claim” is deliberately broad:

“any debt, liability or obligation of the [Plaintiff] as at the Effective Date, whether known or unknown, whether certain or contingent, whether present, future or prospective, whether liquidated or unliquidated, whether arising at common law, in equity or by statute in Hong Kong or in any other jurisdiction or in any manner whatsoever …”

(4)  Clause 3.2 requires every Scheme Creditor to deliver a Proof of Debt and supporting evidence to the Scheme Administrators by the Cut-Off Date.

(5)  Clause 3.7 requires the Scheme Administrators to examine every proof and decide whether to admit or reject the claim, in whole or in part, giving written reasons where the claim was rejected.

(6)  Clause 3.11 provides the review mechanism. A dissatisfied creditor could apply in writing to the Adjudicator within 10 business days, paying HK$100,000 on account of the Adjudicator’s costs. The Adjudicator would act as an expert and not as an arbitrator, and “[t]he Adjudicator’s decision shall be final, conclusive and binding on the relevant Creditor insofar as the law permits”. If no valid review application was made within 10 business days, “the Scheme Administrators’ decision that decision will be binding on the Creditor”.

(7)  Clause 3.14 provides the consequence. Any claim not proved in accordance with Clause 3 or rejected by the Scheme Administrators or the Adjudicator is treated “for all purposes as having been wholly and irrevocably discharged and released and no Creditor shall be entitled to payment thereof or make any claim or initiate any proceedings against the Company in relation thereto”.

(8)  Clause 11.3 provides: “The Scheme shall be subject to the laws of Hong Kong and the Creditors submit to the exclusive jurisdiction of the Hong Kong Court in respect thereof.”

18.  On or about 27 May 2025, the Scheme Administrators issued a circular to potential creditors, including the Defendant, requiring them to submit proofs of debt and supporting documents by the cut-off date.

19.  On or about 19 June 2025, the Defendant submitted its POD under the Scheme in the sum of RMB 16,113,666.50. The POD was supported by particulars and exhibits prepared by the Defendant.

20.  On 2 July 2025, the Scheme Administrators issued a notice of rejection (the “Notice of Rejection”) and rejected the POD in its entirety. They did so on the basis that the POD claims fell within the scope of the Settlement Deed and had been fully and finally settled, discharged and extinguished.

21.  The Notice of Rejection informed the Defendant that, if dissatisfied, it could apply in writing to the Adjudicator within 10 business days. The Notice of Rejection was sent by ordinary post on 2 July 2025 and deemed served on 4 July 2025. The review deadline expired on 18 July 2025.

22.  The Defendant did not apply for review, either by the deadline or at all. The Plaintiff therefore submits that the Scheme Administrators’ rejection is therefore binding under Clause 3.11; and under Clause 3.14 the Defendant’s claims have been wholly and irrevocably discharged and released.

23.  Despite the Settlement Deed, on 15 April 2025 (i.e. before submitting the POD), the Defendant commenced the GZ Arbitration before the Guangzhou Arbitration Commission, advancing claims in the aggregate sum of approximately RMB 16.1 million. The relief and the claims so advanced are coextensive with those rejected under the Scheme.

24.  The substantive claims advanced in the GZ Arbitration are identical, line-by-line, to those advanced in the POD. Mr Chin for the Defendant fairly agrees that the GZ Arbitration claims arise out of or in connection with the 5 Contracts: “The commencement of the GZ Arbitration is a proper exercise of the Defendant’s contractual rights under the 5 Contracts … The Arbitration Clause in the 5 Contracts continued to subsist, at least in relation to the Arbitration Issues.” (Chang’s 1^st Affirmation at [58(iii)-(iv)]).

25.  The Plaintiff challenged the arbitral tribunal’s jurisdiction on 5 December 2025 and filed its statement of defence on 8 December 2025. The first hearing took place on 8 December 2025. The Plaintiff subsequently filed supplemental submissions and an application to terminate or stay the arbitration on 31 December 2025.

26.  The GZ Arbitration is ongoing.

ANALYSIS AND DETERMINATION

27.  The legal principles in relation to summary judgment are well established and I do not propose to rehearse the same here. The issue here is a binary one, namely, whether by submitting to the Scheme and its adjudication process, the Defendant can nonetheless pursue a parallel arbitration to vest the Plaintiff with the same issues again.

28.  On the present state of law, the answer is no. A scheme of arrangement sanctioned by the Court is not a private side arrangement which a creditor may disregard. The Court’s sanction gives effect to a statutory collective process binding creditors within its scope.

29.  Claims determination and adjudication procedures are a recognised and legitimate feature of schemes. Re Noble Group Ltd (No 2) [2018] EWHC 3092 (Ch); [2019] 2 BCLC 548 at [8], [72]-[76] records that a scheme may validly release scheme claims in return for consideration, with disputed claims determined by an independent adjudication process analogous to the proof of debt process in liquidation.

30.  The courts have expressly recognised that it may be legitimate for a scheme to restrict creditors’ access to the ordinary courts by use of an independent adjudicator, provided the substitute is robust, satisfactory and justified. In Re Noble at [73]-[76], Snowden J (as he then was) held that such an adjudication process, modelled on statutory proof procedures and conducted by experienced and impartial adjudicators, “is both consistent with established legal principles, and fair”.

31.  The Court should therefore enforce the Scheme mechanism according to its terms. A creditor dissatisfied with an administrator’s decision must use the agreed review route. It cannot ignore that route and reopen the same claim elsewhere.

32.  Further, a creditor who lodges a proof of debt submits to the jurisdiction of the court supervising the insolvency or restructuring process in matters connected with that process. The principle is not dependent on admission of the proof or payment of a dividend. The lodging of the proof itself is enough: Stichting Shell Pensioenfonds v Krys [2014] UKPC 41; [2015] AC 616 at [29]-[31].

33.  The rationale is straightforward. By filing a proof, the creditor obtains the immediate benefit of having its claim considered within the collective process and, if admitted, paid according to the distribution rules. The act of proof is a significant act for the purposes of submission, because the creditor “submitted to a statutory regime which precluded it from acting so as to prevent the assets … from being distributed in accordance with it”: Stichting Shell Pensioenfonds v Krys [2014] UKPC 41; [2015] AC 616 at [32].

34.  Re PT Garuda Indonesia (Persero) Tbk [2024] SGHC(I) 1; [2024] 3 SLR 254 at [60]-[61] confirms the same principle in the cross‑border restructuring context:

“In the present case, the Composition Plan involves the compromise of debts owed by Garuda Indonesia and, amongst others, Garuda France to the Greylag Entities under the Aircraft Leases which are governed by New York law….

Here, it is common ground that the Greylag Entities fully participated in the PKPU Proceeding. The evidence shows that the Greylag Entities had registered their claims with Garuda Indonesia’s administrator by way of claim forms dated 5 January 2022. They were also kept in the loop on developments on the Composition Plan and voted against it at the creditors’ meeting on 17 June 2022. By their conduct, the Greylag Entities had submitted to the jurisdiction of the Indonesian courts in the PKPU Proceeding. Having done so, they are now precluded from asserting that they are not bound by the Composition Plan….”

35.  In appropriate cases, the Hong Kong Courts can grant anti-suit injunction against parties who seek to relitigate concluded matters in a different forum. (See: G v CNG [2026] HKCFI 902 at [61]–[68]). The Court must be vigilant not to permit parties to attack binding judgments, awards or court-supervised processes by recasting them as fresh disputes. In G v CNG at [164]-[166], the Court restrained arbitration claims which were collateral attacks on awards and enforcement judgments, holding them to be vexatious, oppressive and an abuse of process.

36.  Applying the above legal principles to the facts of the present case, I am of the view that the Defendant’s claims in the GZ Arbitration have, in law and in substance, been disposed of in the adjudication process under the Scheme and it is inherently wrong for the Defendant to relitigate the same again.

37.  I am fully aware of Mr Chin’s point that the Defendant chose to participate in the Scheme and the adjudication process in order to protect itself. However, once the Defendant elected to participate in the Scheme and its adjudication process, I really do not see how the Defendant could then choose to ignore the result of the very process and have the matter relitigated in the GZ Arbitration. That is inherently wrong.

38.  The Defendant lodged its POD on 19 June 2025. The Scheme Administrators rejected it on 2 July 2025. The 10-business-day review window prescribed by Clause 3.11(a) of the Scheme expired on 18 July 2025. The Defendant filed no review application. It could have reviewed the decision and if so advise, take further legal steps.

39.  I accept Mr Ho’s submission that it follows, as a matter of contract:

(1)  The Scheme Administrators’ rejection of the POD became “final, conclusive and binding” upon the Defendant pursuant to Clause 3.11(c);

(2)  The rejected POD claims are “wholly and irrevocably discharged and released” pursuant to Clause 3.14; and

(3)  The Defendant is barred from commencing or prosecuting any further proceedings in respect of those claims pursuant to Clause 4.

40.  I am of the view that the above analysis is dispositive of the Plaintiff’s application and the Defendant’s defence.

41.  I agree with Mr Ho that the Defendant’s present position would make the Scheme machinery optional. It would allow a creditor to submit a proof, await an unfavourable decision, decline the stipulated review mechanism, and then seek a second bite in an external arbitration. That is precisely what a court-sanctioned scheme’s claims process is designed to prevent.

42.  I also agree that the fact that the GZ Arbitration was commenced before the POD was filed does not assist the Defendant. The Plaintiff seeks to restrain the continuation and prosecution of that arbitration after the Scheme adjudication became binding. The Defendant’s later voluntary submission to the Scheme process and failure to review the rejection are dispositive of its entitlement to continue the same claim elsewhere.

43.  The continued prosecution of the GZ Arbitration is therefore a collateral attack on a final and binding determination - exactly the situation in which an anti-arbitration injunction is to be granted: G v CNG at [68]‑[69].

44.  I take on board the Defendant’s case that its POD was merely “a commercial and protective step” (Chang 1 at [48]). However, the real question is the objective legal effect of filing the proof under the Scheme, not the Defendant’s subjective intention. The Scheme itself told creditors that they submitted to the exclusive jurisdiction of the Hong Kong court in respect of the Scheme.

45.  The Defendant’s POD invoked the very adjudicatory machinery which it now seeks to bypass. It asked the Scheme Administrators to consider the same claim. It thereby accepted the process, including the release, bar, adjudication and exclusive jurisdiction provisions. It cannot accept the jurisdiction for the purpose of seeking a dividend, but deny it when the answer is unfavourable.

46.  The Scheme adjudication procedure is the agreed mechanism for the determination of such disputes, and the Defendant chose to invoke it. To allow the GZ Arbitration to proceed would be to reduce the Scheme to a dress-rehearsal for proceedings elsewhere - an outcome that the authorities cited above flatly forbid.

47.  Mr Chin submitted that the Defendant was not notified as a creditor (to vote on the Scheme.)  The Defendant also did not file its POD with an intention to submit to the jurisdiction of Hong Kong. However, the fact remains that it did file its POD and submitted itself to the scheme adjudication process. Its subjective intention is not relevant.

48.  I agree that the GZ Arbitration is an attempt to relitigate a claim already submitted to, and rejected under, a Hong Kong court-sanctioned Scheme. It therefore infringes the Plaintiff’s legal rights under the Scheme and exposes the Plaintiff to duplicated litigation in defiance of a binding claims determination.

49.  The continuation of the GZ Arbitration also defeats the commercial and procedural purpose of the Scheme. The Scheme was designed to centralise claims, determine them through its proof and adjudication mechanism, and bar further proceedings. An external arbitration over the same claim is inconsistent with that architecture.

50.  I therefore accept that the injunction sought is necessary and proportionate. It does not interfere with a foreign court. It operates in personam against a Hong Kong-incorporated Defendant that submitted to Hong Kong’s Scheme jurisdiction. Its object is to protect the integrity of a Hong Kong court-sanctioned restructuring and to enforce the parties’ agreed finality.

51.  I also find it appropriate in this case to grant the declaratory relief. In Zhengtan Holdings Ltd v Yu Ling Ling [2026] HKCFI 521 [at [40]‑[41] the Court reaffirmed the following three-limb test: (a) the applicant has a real interest in the subject matter of the declaration; (b) he has a real interest in obtaining a declaration against the adverse party; and (c) the adverse party is a proper contradictor. The Court there observed that the jurisdiction to grant declaratory relief is “extremely wide”.

52.  On the facts of the present case, given the subsistence of the GZ Arbitration, I am of the view the declaratory relief prays for by the Plaintiff serves the useful function of bringing the subject matter of the dispute to a close.

53.  By reason of the above analysis, I do not find it necessary to deal with the issue on the construction of the settlement deed.

54.  However, I have to say that if I have to rule on the issue of construction, despite the able submissions of Mr Ho as set out in his skeleton submissions, I will have no hesitation to come to the view that there are bona fide and serious issues to be tried.

55.  I have carefully considered Mr Chin’s written and oral submissions. The Defendant’s case is that the Settlement Deed was an interim and pragmatic arrangement directed to the handling and release of the Defendant’s inventory at the Premises (the “Inventory Issue”), in an urgent liquidation context; it was not a “global settlement” of all claims between the Parties. That is not an argument totally without merits when the Settlement Deed is construed against the entire factual and commercial context.

56.  Nonetheless, as I set out above, it is not the function of this Court to re-adjudicate on this matter.

DISPOSITION

57.  For all the above reasons, I make an order in term of the Plaintiff’s Summons.

58.  I also make a costs order nisi that the Defendant is to pay the costs of and occasioned by the Plaintiff, on a party-to-party basis, if no agreement can be reached, to the Plaintiff forthwith. This costs order nisi will be made absolute within 14 days from the day hereof unless an application is taken out to the vary the same with the 14-day period.

59.  Finally, it remains for this Court to thank Mr Ho for the Plaintiff and Mr Chin and Mr Wan for the Defendant for their very helpful submissions.