FLAME ASIA RESOURCES PTE LTD v. FULL IDEA TRADING LTD AND OTHERS

HCA 1483/2025

[2025] HKCFI 4139

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1483 OF 2025

____________

BETWEEN

____________

____________________________________

REASONS FOR DECISION

____________________________________

INTRODUCTION

1.  This is the return day for hearing the Plaintiff’s application for continuation of the ex parte interim injunction granted by this Court on D2-D4 (“PMJ”, “Juliet Liu” and “Yuli Kwan”, respectively) on 15 August 2025 (“the Injunction Order”) together with the Disclosure Order.

2.  I am satisfied that the Injunction Order and supporting documents have been served on D1 (“Full Idea”) and by substituted service on PMJ, Juliet Liu and Yuli Kwan, in accordance with §15 of the Injunction Order. This hearing does not concern Full Idea as the Injunction Order has been granted up to judgment in HCA 1483/2025 (“the Action”). As for PMJ, Juliet Liu and Yuli Kwan, none have appeared at this hearing.

BACKGROUND

3.  Flame as buyer and Ohnicio Trading (HK) Limited (“Ohnicio”) as supplier entered into a coal supply contract dated 23 September 2020, but signed in May 2021 (“the Contract”). Ohnicio did not supply coal to Flame but in between June 2021 and April 2022 declared force majeure 3 times (“FM1”, “FM2” and “FM3”) (collectively “the FM declarations”). The last one was on 23.4.2022 when Ohnicio declared FM3 based on a landslide at PMJ’s mine, following which the mine has not resumed production. Since then, PMJ could not produce coal from the mine and Ohnicio had no coal to sell to anyone. This means that from mid-2022, Ohnicio had not had any business to carry on and no reason to expend huge sums of money.

4.  For those FM declarations, documentary evidence shows that it was Juliet Liu and Yuli Kwan who exercised powers and functions and made important decisions as directors, instead of the de jure director, LY Ho.

5.  Flame disputed those FM declarations, accepted Ohnicio’s repudiation and terminated the Contract on 25 August 2022.

6.  Flame commenced arbitration by notice on 2 October 2022. It was ruled, amongst others, that the purported FM declarations did not allow Ohnicio to avoid its obligations. Flame obtained 2 awards on liability and costs in May and November 2024 in the arbitration, whereby Flame is entitled to payment from Ohnicio of over US$13.5m plus interest as damages; and US$2.23m plus interest as costs. These rolled up to over US$18.2 million as at 31 July 2025.

7.  Ohnicio did not pay and ceased responding to Flame.

8.  Flame enforced those awards in Hong Kong (as Ohnicio is a Hong Kong company and has bank accounts here) in HCCT 80/2024 (“the HCCT Proceedings”) and was granted leave to enforce them Mimmie Chan J’s orders dated 17 July and 19 December 2024 respectively.

9.  Ohnicio did not respond to those court orders, or the statutory demand served on 3 September 2024. By reason of its failure to respond to the statutory demand, Ohnicio was deemed insolvent.

10.  Accordingly,

(1) On 20 September 2024, Flame obtained a Mareva injunction and disclosure orders in the HCCT Proceedings. The Mareva injunction against Ohnicio was largely ineffectual since Ohnicio had by then closed its main bank accounts.

(2) On 30 October 2024, the Full Idea Chabra injunction with ancillary disclosure order, which no longer concerns this hearing.

(3) On 6 December 2024, Flame obtained further disclosure orders against HSBC and SCB for banking documents of Ohnicio and Full Idea.

11.  These orders were wholly ignored by Ohnicio and Full Idea.

12.  From documents obtained through the disclosure orders, Flame discovered that during the course of the arbitration, Ohnicio had substantially dissipated the cash in its main bank account at HSBC by paying 3 sums totaling US$28.8 million (“Three Transfers”) to D1 in the Action (“Full Idea”, a Hong Kong company), and to D2 (“PMJ”, an Indonesian company), without consideration or apparent commercial justification.

13.  The Three Transfers were personally authorized by Juliet Liu and Bill Tong. The timing of the Three Transfers tallied with procedural order no. 1 dated 6 December 2022 in the arbitration. Ohnicio dissipated the bulk of its cash to Full Idea and PMJ during the arbitration and thereafter closed its bank account just before issue of the Final Award.

14.  Ohnicio, Full Idea and PMJ have the same or substantially common ownership in that Juliet Liu is the sole beneficial owner of Ohnicio and Full Idea, and 50% shareholder of PMJ. Her elder daughter Yuli Kwan is a 25% shareholder of PMJ (the remaining 25% being held by her younger daughter). In respect of Ohnicio’s HSBC and SCB accounts, Juliet Liu and Bill Tong were their signatories but LY Ho (the de jure director of Ohnicio) was not.

15.  In the light of such discovery, Flame obtained the Full Idea Chabra injunction (freezing US$2.26 million in its Hong Kong accounts) and sought further disclosure orders in the HCCT Proceedings. However, she disclosed documents thereafter obtained revealed that the money from Ohnicio had long been transferred out.

16.  In the light of the above, Flame brought this Action against Full Idea, PMJ, Juliet Liu and Yuli Kwan for thwarting Flame’s enforcement of the arbitral awards. The causes of action are (i) unlawful means conspiracy and (ii) procuring breach of contract.

17.  Flame seeks worldwide Mareva injunction against D1-D4 in the Action. An order was grant in respect of Full Idea for the injunction to last till judgment in the Action or until further order and an interim order was made in respect of PMJ, Juliet Liu and Yuli Kwan that has effect until today.

18.  Following from the grant of the Injunction Order on 15 August 2025, Flame lodged a caveat in the Lands Title Registry of the Singapore Land Authority over the residential property in Singapore (“the Singapore Property”) in which Juliet Liu and Yuli Kwan hold 42.5% and 43.75% respectively. Flame is not aware of any challenge to the caveat.

19.  PMJ, Juliet Liu and Yuli Kwan have not filed anything in opposition; or anything in compliance with the Disclosure Order. Flames’ application for service of the writ out of jurisdiction on them is still pending.

20.  Juliet Liu was arrested at the Jakarta airport on 25 July 2025. She made an application before the Jakarta court for “whether or not the determination of the suspect is valid”. On 21 August 2025, however, the Jakarta Court granted her petition for withdrawal of her application and declared revocation of her application for reasons that are not clear. It appears that Juliet Liu remains in custody at the Indonesian National Police Criminal Investigation Agency in South Jakarta and will likely remain there for some time. Both her Taiwanese and Indonesian passports have been confiscated. She had in fact fled to Taiwan in June 2023 following the initial case alleged against her. She was understood to have travelled between Taiwan and Singapore, before she was eventually arrested during her attempt to enter Singapore and was diverted to the Jakarto Airport.

LEGAL PRINCIPLES FOR GRANT OF WORLDWIDE MAREVA INJUNCTION

21.  It is for Flame to show a good arguable case on the merits of the Action, that there are no or insufficient assets in Hong Kong to satisfy the arbitral awards and there are assets outside the jurisdiction, that there is real risk of dissipation of assets and that the balance of convenience lies in favour of grant of the Mareva injunction.

GOOD ARGUABLE CASE

22.  There are 2 main causes of action: unlawful means conspiracy and procuring breach of contract.

23.  With regard to conspiracy, Flame has to show (a) a combination; (b) of persons including the defendant; (c) to do something which is unlawful in itself; (d) with a common intent to injure and (e) loss to Flame: Kuwait Oil Tanker Co SAK v Al Bader [2000] 2 All ER (Comm) 271, §108.

24.  Breach of fiduciary duties qualify as “unlawful means” for the purpose of an unlawful means conspiracy: Smart Trike Mnf Pte Ltd v Chiu Sui Chun [2024] HKCFI 1562, §262(iii).

25.  Flame has shown a good arguable case on conspiracy:

(1) Juliet Liu and Yuli Kwan combined to strip Ohnicio of its bank balance for no consideration or commercial reasons to benefit themselves and to harm Flame.

(2) There was unlawful means used in that Juliet Liu and Yuli Kwan breached their fiduciary duties owed to Ohnicio as its de facto directors. Juliet Liu was the ultimate beneficial owner of Ohnicio. She (and not the de jure director) controlled Ohnicio’s bank accounts. She exercised significant and final decision-making power over important business decisions of Ohnicio, including the FM declarations.

(3) Likewise, Yuli Kwan was a de facto director of Ohnicio involved in all aspect of its business. She gave directions over governance of Ohnicio which could only be discharged by a director, eg she gave directives to senior employees, bypassed key decisions of senior employees, informed Flame that her declaration was binding and sufficient for external parties to rely on and decided on Ohnicio’s repudiatory message to Flame.

(4) The Three Transfers were diverted to Full Idea and PMJ, which were owned or controlled by Juliet Liu and Yuli Kwan. There was thus a misapplication of trust money of Ohnicio for the personal benefit of Juliet Liu and Yuli Kwan.

(5) Given Juliet Liu and Yuli Kwan’s central roles in Ohnicio and the Three Transfers, their knowledge would be attributed to Full Idea and PMJ.

(6) The Three Transfers occurred at pivotal moments in the arbitration proceedings, ie

(a) when the dates for substantive hearing was fixed,

(b) when specific discovery was ordered; and

(c) when the Tribunal ruled, ordering Ohnicio to seek access from PMJ of documents (a ruling that Ohnicio did not comply with).

(7) Juliet Liu and Yuli Kwan clearly knew and intended that this would be the effect of their conduct, having regard to the fact that the Three Transfers were effected shortly before the final arbitral award was given, leaving a balance that was not meaningful in the light of the subject matter involved in the arbitration (and hence the potential award).

26.  Flame has shown a good arguable case on procuring breach of the arbitration agreement. Each of the Defendants knew of the arbitration agreement in the Contract. In arranging, assisting and/or receiving the Three Transfers, Juliet Liu, Yuli Kwan, Full Idea and PMJ have induced Ohnicio to commit an anticipatory breach of the Contract by putting it out of the power to fulfil an arbitral award in favour of Flame.

27.  For either or both causes of action, Flame suffered loss in that it has not been able to make meaningful recovery for the arbitral awards, apart from HK$3.5 million from a garnishiee order absolute against Ohnicio’s SCB Accounts; and has incurred substantial costs to seek to enforce them.

REAL RISK OF DISSIPATION

28.  PMJ, Juliet Liu and Yuli Kwan have procured the misappropriation of the cash of Ohnicio in the course of the arbitration and/or put the assets out of reach of Flame so as to frustrate the arbitral awards.

29.  They failed to give proper disclosure of assets and that is indicative of risk of dissipation as well: Beijing Renji Real Estate Development Group Co Ltd v Zhu Min [2022] 4 HKC 116, §§70-71, 75.

30.  Their conduct shows a flagrant disregard of arbitration awards and court orders. They have no commercial morality.

31.  Juliet Liu and Yuli Kwan are in control of Full Idea and PMJ and are in a position to dissipate those companies’ assets as well.

32.  For the reasons given in §§28-31, Flame has shown real risk of dissipation.

ASSETS WITHIN AND OUTSIDE HONG KONG

33.  Flame has shown that there are no or insufficient assets of the Defendants to satisfy its claim but there are assets outside Hong Kong.

(1) Full Idea holds US$2.26m in its HSBC account in Hong Kong but it is insufficient to meet the arbitral awards.

(2) Juliet Liu has assets in Hong Kong in the form of interests in Ohnicio and Full Idea. Given her extensive use of Hong Kong corporate vehicles and service providers, she may have bank accounts in Hong Kong. She has assets outside Hong Kong in the form of a 42.5% interest in the Singapore Property, worth SGD8m/US$ 6.26m, and a 25% stake in PMJ.

(3) Yuli Kwan does not appear to have assets in Hong Kong but does have a 43.75% interest in the Singapore Property, and a 25% stake in PMJ.

(4) PMJ has an account in Indonesia into which part of the Three Transfers was paid.

BALANCE OF CONVENIENCE

34.  Without an injunction, Flame’s claims are likely to be rendered futile in view of the conduct of the Defendants.

35.  This is a post-arbitration enforcement action. The Court is more inclined to grant the injunction to enable effective enforcement. No serious prejudice would be caused to the Defendants as there are provisions in the injunction for legal costs, living expenses and some running expenses if Full Idea and PMJ are still conducting a business. Flame has given an undertaking as to damages.

36.  The balance of convenience is clearly in favour of continuation of the Injunction Order. The continuation will also support the maintenance of the caveat over the Singapore property.

ANCILLARY DISCLOSURE ORDER

37.  This will enable Flame to identify and preserve assets of PMJ, Juliet Liu and Yuli Kwan which may otherwise be dissipated and encourage compliance with the injunction: Hong Kong Civil Procedure 2025, Vol 1, §29/1/74. Flame has no other means to gain access to such information.

ORDER

38.  For the reasons given, I therefore continue the Order made on 15 August 2025 with regard to PMJ, Juliet Liu and Yuli Kwan for 6 months to allow them to be served with the originating process. Costs are reserved.

39.  I thank Ms Sit SC (who appeared on the previous occasion) and Ms Mak (who appeared on both occasions) for their assistance.