HANWHA TOTAL PETROCHEMICAL CO LTD AND ANOTHER v. CHANGHONG GROUP (HK) LTD

HCAJ 6/2018

[2019] HKCFI 1931

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ADMIRALTY ACTION NO. 6 OF 2018

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D E C I S I O N

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1.  The Defendant applies for leave to appeal against the decision of this court dated 29 January 2019 by which its stay of proceedings application was dismissed (“Decision”).

2.  The arguments came within a narrow ambit.  Mr Smith SC, who appeared for the Plaintiffs, submitted that by reason of the lack of any relevant on-going proceedings between the parties which can support the Defendant’s argument based on lis alibi pendens, the Defendant’s stay application could not get pass the first of the two stage test derived from Spiliada and restated in SPH v SA (see the decision of this court in a related action [2018] HKCFI 2474, §19).

3.  The arguments of Mr Toms, representing the Defendant, confirmed that lis abili pendens is the lynchpin of the Defendant’s application. 

4.  The arguments based on that principle were dealt with in paras 5 to 8 and 10 of the Decision.  However, Mr Toms contends that the court’s understanding of the principle was too narrow.  It was submitted that where the issue of apportionment of liability for the collision in question would be determined by another court (SMC) and that the litigation in Hong Kong might involve the testimony of the same witnesses, the principle of lis alibi pendens might be invoked.  It was not important that the parties in the foreign proceedings were different to those of the Hong Kong proceedings, said Mr Toms. 

5.  Mr Toms had fairly accepted that his contentions are novel.  I am unable to agree that such contentions are reasonably arguable.  I agree with Mr Smith that the concept of issue estoppel underpins the principle of lis alibi pendens.  I fail to see how the principle can be invoked by the Defendants if the decision to be made by the SMC would not constitute an issue estoppel between them and the Plaintiff. 

6.  The contentions advanced by the Defendants are contrary to the existing authorities.  I am inclined to agree with Mr Smith that the authority of China Constuction Bank v Shanghai Pudong Development Bank, unrep, CACV 14/2016 (3 February 2017) supports the Plaintiff’s case rather than that of the Defendants. 

7.  In the premises, this application is dismissed with an order nisi that the costs of an occasioned thereby be paid by the Defendant, to be taxed if not agreed.