MEIDI INVESTMENT HOLDING LTD v. BSC CAPITAL LTD AND OTHERS

HCA 1445/2021

[2025] HKCFI 3296

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1445 OF 2021

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J U D G M E N T

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Two Procedural Applications

1.  By my Decision dated 28 August 2024 (“Decision”), I dismissed an application by the 2^nd Defendant (“D2”)  to stay these proceedings and to discharge an injunction order (“Injunction Order”)  against it.

2.  After the Decision was handed down, D2 made two applications:

(a)  By Summons dated 11 September 2024, D2 seeks leave to appeal to the Court of Appeal against my Decision (“Leave to Appeal Application”); and

(b)  By Summons dated 23 December 2024, D2 seeks leave to adduce further evidence and leave to amend the Summons for the Leave to Appeal Application (“Further Evidence Application”).

3.  By Au-Yeung J’s Order dated 3 February 2025, both applications are to be disposed of together on paper.

The Substantive Application

4.  It would be useful to begin by reciting the terms of the substantive application before me and which I dismissed.

5.  By Summons dated 21 December 2021, D2 originally applied for:

“1. a declaration that in the circumstances of the case the Court should not exercise any jurisdiction it may have;

2. a declaration that in the circumstances of this Action the Court has no jurisdiction over the 2^nd Defendant in respect of the subject-matter of the claim and/or the relief and or/ the remedy sought in this Action;

3. a declaration that the Writ of Summons and the Injunction Order of the Honourable Mr. Justice S.T. Poon herein dated 21^st September 2021 herein (“the 21/9/2021 Injunction Order”)  have not been duly served on the 2^nd Defendant;

4. an Order that there be leave to discharge all Orders of the Court giving leave to the Plaintiff to serve documents on the 2^nd Defendant out of jurisdiction and by substituted service; and

5. an Order that there be leave to discharge the 21/9/2021 Injunction Order subsequent Orders of the Court extending such Injunction Order;

6. an Order that all property and assets frozen by the Plaintiff under all Orders of the Court be released; and

7.    an Order that costs of this application be paid by the Plaintiff to the 2^nd Defendant, to be taxed if not agreed.”

6.  In its Counsel’s written submissions dated 1 September 2022 (at §28), D2 had narrowed down the reliefs it was seeking to the terms as follows:

“a. Staying the proceedings against D2 [O.12, r.8(2)(b)  of the RHC …];

b. Discharging the Injunction Order and all subsequent Orders extending it (i.e. the Order dated 30 Sep 2022)  against D2 […]; and

c.  Awarding costs of the present application payable by P to D2, to be taxed if not agreed […].”

7.  Clearly, the declarations which D2 sought in its Summons were the conclusions which D2 urged the Court to make.  The reliefs which it really sought were a stay of proceedings and a discharge of the Injunction Order.

8.  The availability of these reliefs turned on whether, in the exercise of the Court’s discretion in the circumstances of the case, the Court would hold the Plaintiff (“P”)  strictly to and require it to specifically perform the exclusive jurisdiction clause (“EJC”)  appearing in the contractual document between it and D2.  For reasons explained in my Decision, I declined to do so.

Discussion

9.  To succeed in its Leave to Appeal Application, D2 has to show a real prospect of success for its intended appeal.

10.  It is well-established that the appellate court will not set aside a first instance judge’s exercise of discretion lightly.  The appellate court would do so only if it can be shown that the judge was plainly wrong in that, e.g., he had acted on wrong legal principles, taken into consideration irrelevant factors, ignored relevant factors or the decision is outside the generous ambit within which reasonable disagreement is possible.  See: Agritrade Resources & Anr v Ashok Kumar Sahoo [2022] HKCA 280, §20; Hong Kong Civil Procedure 2025, §59/2A/4.

11.  I do not see a real prospect of success for D2 in arguing that I was plainly wrong, especially when on the basis of the evidence then before me.  I shall not repeat the discussion in my Decision.

12.  This takes us to the Further Evidence Application.  D2 wishes to add to or vary the factors to be taken into account.  It seeks to adduce:

(a)  An Order of M. Chan J dated 31 January 2024 (“Enforcement Order”)  granting P leave to enforce an Award dated 7 September 2023 (“Award”)  against the 1^st Defendant (“D1”)  in an arbitration in the Singapore International Arbitration Centre (“SIAC”); and

(b)  Correspondence whereby P informed D2 about the Enforcement Order (collectively, “Further Evidence”).

13.  The Enforcement Order required D1 to transfer the shares which are the core subject matter of the parties’ disputes back to P.

14.  As I noted in my Decision (at §§55 to 56), D2 had represented to P to be holding the shares, despite objective evidence to the contrary, and had been coy about the truth.

15.  P wrote to D2 on 12 November 2024 to request D2 to transfer the shares to it, citing the Enforcement Order.  D2 declined on the basis that it was not a party named in the Order.

16.  D2 now seeks to adduce the Further Evidence on the grounds that it did not and could not have known about the Award or the Enforcement Order until P informed it, on 12 November 2024, i.e., after my Decision, and that the matters now known to it affects a basic assumption in my Decision.

17.  I agree that the matters now known do relate to an important point in my Decision, namely that it is desirable to avoid fragmentation of litigation, one obvious aspect of which is the dispute between P and D1 (see my Decision §§61 to 75).

18.  However, the fragmentation sought to be avoided was not only in relation to D1.  There were all along (and still are)  other parties in the overall factual and legal case.  In its Counsel’s written submissions dated 2 September 2022 (at §18), P made its argument against fragmentation by reference to all the Defendants.

19.  Moreover, to see the significance or otherwise of the matters now known, one would very likely have to reassess the context and consider a host of other matters.  For example: whether D1 really exists (see my Decision §10); whether it has participated in the arbitration and, if so, its stance and evidence; whether D2 maintains that it has the shares and, if so, its reasons not to return them to P now that it has been adjudicated P (and not D1)  is entitled to them; the status of the proceedings in the Bahamas which D2 had commenced (see my Decision §65).

20.  In short, insofar as the Further Evidence ought to be considered, what it points to is a change of circumstances, and a change which will require a reassessment of the total circumstances of the case.

21.  I do not believe that the change of circumstances should or could best be dealt with by way of an appeal.  Some evolutions of a case are not to be dealt with by appeal.  See, e.g.: Hong Kong Civil Procedure 2025, §59/0/6.

22.  In Re Prudential Enterprises Ltd [2004] 2 HKC 205, Chu J (as she then was)  explained (at §13)  that an exception to the general rule against re-litigating over interlocutory applications is exactly where there is a material change of circumstances.

23.  In Lau Sin v Wong Mary [2018] 3 HKLRD 202, DHCJ Paul Lam discussed (at §33)  the legal principles on whether a fresh application would be considered an abuse of process.  Where there is new evidence which seriously justifies reconsideration or where there is a material change of circumstances, a second application is permissible.

24.  I would add that, in the present case, if D2 reopens the assessment exercise and re-enlivens the Court’s exercise of discretion, P may well revise its arguments to include the point that D2 has disentitled itself from claiming any equitable relief of specific performance. As I have noted in my Decision (at §§54 to 57), it was because P did not make the point that, in fairness to D2, I did not base my Decision on this point; had P made the point, it would have found favour.

25.  All in all, I think the Further Evidence does not justify an appeal.  If D2 wishes to rely on those matters now known, it should do so in a renewed application, so that the parties will have a full opportunity to put all the related and relevant information before the Court.

Conclusion

26.  I therefore dismiss D2’s applications and make an Order nisi that D2 shall pay P’s costs.

27.  In case D2 chooses to pursue a renewed application to stay these proceedings and/or discharge the Injunction Order, insofar as the parties may think listing the matter before me may expediate the giving of directions or its determination or save time and costs, I give permission for the parties to write to my clerk or to the clerk of the Listing Judge for such purposes.

28.  I thank Counsel for their helpful submissions.