LA DOLCE VITA FINE DINING GROUP HOLDINGS LTD v. ZHANG LAN AND ANOTHER

HCCT 35/2019
HCCT 36/2019
(dealt with together)

[2020] HKCFI 1969

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 35 OF 2019

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AND

HCCT 36/2019

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 36 OF 2019

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D E C I S I O N

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1.  The Respondents seek leave to appeal against my Decision of 23 April 2020 (“Decision”), whereby I granted a Hadkinson Order against the 1^st Respondent and security against the 3 Respondents. The nomenclature in the Decision is adopted herein.

2.  By the Decision, security was ordered against the Respondents as a condition for adjourning the Respondents’ Summons to set aside the Enforcement Orders made by this Court, whereby leave was granted to the Applicant to enforce arbitral awards in Hong Kong. The Hadkinson Order was made against Zhang, to the effect that until she has fully complied with the injunction and disclosure orders made by the Court on 26 February 2015, she should not be heard on the Summons for setting aside the Enforcement Orders.

3.  The orders in the Decision were made in the exercise of the discretion of the Court. In an appeal against an exercise of a judge's discretion, the authorities are clear that the ambit of the appellate court's interference is restricted. The Court of Appeal will not intervene unless the appellant can show that the judge had exercised his discretion under a mistake of law or misdirected himself with regard to the legal principles in accordance with which his discretion had to be exercised, or had misapprehended material facts, or had taken into account irrelevant matters or failed to take relevant matters into account, such that the judge's conclusion was plainly wrong, and "outside the generous ambit within which reasonable disagreement is possible". (See paragraph 59/0/54, Hong Kong Civil Procedure 2020.)

4.  In this case, I am not satisfied that I had exercised my discretion under wrong principles of law, or that my decision was plainly wrong.

5.  The factors taken into consideration in the exercise of my discretion have all been set out in my Decision and I am not persuaded that they are irrelevant, or that any relevant matter had not been taken into account. Despite Counsel’s arguments, I am not satisfied that there was any misapplication of the law. Zhang’s application to set aside the Enforcement Orders was not merely “defensive”, for the reasons set out in paragraphs 7 and 8 of the Decision.

6.  Zhang had been given the full opportunity, in the contempt proceedings, to argue whether she had been in breach of the Injunctions. She has not been shut out, as claimed. Nor is she being forced, by the Hadkinson Order, to abandon her appeal against the Committal Order (despite the fact that the appeal has still not been set down and pursued, notwithstanding the lapse of time since April 2019). In any event, as explained in paragraph 14 of the Decision, the Court will not refuse to grant a Hadkinson Order simply because there is some legitimate argument that the order which was breached is wrong, or should be varied.

7.  The merits of the Respondents’ application to set aside the Enforcement Orders had been duly taken into account. These merits, as to the construction sought to be placed on the Arbitration Clause and Article 27 of the 2012 Rules, were analyzed in paragraphs 32 to 59 of the Decision, when the Court undertook the preliminary and brief consideration of the argument that the Awards are invalid - as the Court was required to do in considering the application for security. The Respondents, in seeking leave to appeal, have sought to repeat the arguments made to the Court which led to the Decision.

8.  Any order to set aside or refuse enforcement of an arbitral award is, at the end of the day, an exercise of the Court’s discretion (Hebei Import & Export Corp v Polytech Engineering Co Ltd (1999) 2 HKCFAR 111). It was highlighted in paragraph 62 of the Decision that no prejudice could be established by the Respondents as a result of any alleged defect in the composition of the Tribunal on the construction of the 2012 Rules. In such circumstances, the prospects of the Enforcement Order and the Awards being set aside are not high.

9.  In relation to the existence of the Injunctions, and the argument that there should be no additional difficulty in the enforcement of the Awards by reason of any delay, the assets actually disclosed by Zhang under the Injunctions are of insignificant value, compared to the amount outstanding under the Awards.

10.  Leave to appeal will only be granted if the contemplated appeal has reasonable prospects of success. For all the above reasons, I am not satisfied that the proposed appeal has any reasonable prospects of success.  Nor am I satisfied that there is any other reason in the interests of justice for leave to appeal to be granted.  I accordingly refuse leave to appeal, with costs.