HONG KONG HUIHUANG INDUSTRIAL CO LTD v. ALLAHABAD BANK

CACV 144/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 144 OF 2016

(ON APPEAL FROM HCA NO. 1062 OF 2015)

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REASONS FOR JUDGMENT AND
DECISION ON COSTS

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Hon Kwan JA (giving the reasons for judgment and decision on costs of the court):

1.  This is the plaintiff’s appeal against the decision of Deputy High Court Judge Saunders on 25 May 2016 in which he struck out the plaintiff’s claim for res judicata, on the basis that the proceedings are an abuse of the process of the court as the plaintiff already has a judgment on the same subject matter of litigation against the defendant in India.

2.  At the conclusion of the hearing, we dismissed the appeal with costs to the defendant.  These are the reasons for our judgment.  We also give our decision on the summary assessment of the costs awarded to the defendant.

Background

3.  The relevant background matters may first be related as follows.

(a) The parties

4.  The plaintiff, Hong Kong Huihuang Industrial Company Limited (“Huihuang”), was incorporated in Hong Kong.  It carried on the business of manufacture, supply and export of LED televisions.

5.  The defendant, Allahabad Bank (“Allahabad”), is a bank incorporated in India.  It has an overseas branch office in Hong Kong and, until 2014, a branch office in Shenzhen, the PRC.

(b) The agreement and the letter of credit

6.  In August 2012, Huihuang entered into an agreement with Sonex TV Appliances Pvt Limited (“Sonex”), a company registered in India, to manufacture and sell to Sonex 1,200 LED television sets at the price of US$125,750 (“the Credit Sum”).  Payment was by letter of credit.

7.  On the application of Sonex, Allahabad issued an irrevocable letter of credit dated 17 August 2012 in favour of Huihuang for the Credit Sum.  The letter of credit was received by Huihuang the following day.

8.  The latest version of the Uniform Customs and Practice for Documentary Credit (UCP 600) applied to the letter of credit.  Among the documents required as provided in Field No 46A of the letter of credit was:

“(5) Inspection certificate issued by Beneficiary. Entire materials will be dispatched after final inspection by Mr Sanjay Hazra.”

9.  The goods were shipped by Huihuang and arrived at Kolkata, the port of discharge in India, on 7 January 2013.  On 27 December 2012, Huihuang presented the letter of credit for payment with relevant documentation through the Standard Chartered Bank (China) Ltd in Shenzhen (“SCB”).  Allahabad received the letter of credit and the supporting documents on 29 December 2012.

10.  On 10 January 2013, Allahabad issued a notice of default to SCB that there was discrepancy in that Allahabad was informed by Sonex the shipment of the goods was without the knowledge and inspection of Sanjay Hazra, so there was non-compliance with Field No 46A clause 5 of the letter of credit.  Sonex had written to Allahabad on 10 January 2013 stating that it would not accept any discrepancy in the letter of credit documents and requested the bank to stop payment.  By a further letter dated 16 January 2013, Sonex provided to Allahabad a copy of an email it received from Sanjay Hazra sent on 10 January 2013 (“the Sanjay Hazra email”), in which he stated:

“... I am not aware of any such shipment [of the goods in question] and have not yet inspected any materials for onward shipment. So I cannot take any responsibility of such shipment.”

11.  Sonex also received an email from the handling agents dated 21 January 2013, which it forwarded to Allahabad, stating that the original bill of lading had not been surrendered at the port of loading office.  Sonex was requested by the handling agents to submit a letter of indemnity to be given to the carrier, Yang Ming Marine Transport Corp (“Yang Ming”) and one copy of an endorsed bill of lading issued by Yang Ming.

(c) The proceedings in India

12.  On 4 February 2013, Sonex brought an action in the High Court of Calcutta against Allahabad, SCB and Huihuang.  It was alleged by Sonex that Huihuang presented non-compliant documents seeking payment under the letter of credit, that Field No 46A clause 5 was not complied with and the Sanjay Hazra email was mentioned in support.  Further, it was pleaded that Huihuang had not surrendered the original bill of lading at the port of loading office, citing the message of the handling agents dated 21 January 2013, and unless the original bill of lading was surrendered at the port of loading, the delivery order for the goods could not be issued to the handling agents.  It was alleged that Huihuang had attempted to defraud Sonex by not surrendering the original bill of lading at the port of loading and that Huihuang was acting in concert with Allahabad to defraud Sonex.  Sonex sought a declaration that the letter of credit was not enforceable and no payment could be remitted by Allahabad to Huihuang through SCB, an injunction to restrain Allahabad from making payment, and consequential orders.

13.  On 6 May 2013, Justice I. P. Mukerji gave judgment after hearing the application “for a considerable length of time”.  Huihuang appeared by counsel but chose not to “file any affidavit in opposition”.  The judge resolved two disputes with regard to the letter of credit.

14.  The first concerned the lodging of the original bill of lading with Allahabad.  Having directed production of the bank records and their inspection, the judge confirmed that the original bill of lading issued by World-Gain Logistics (S.Z.) Limited (“World-Gain”; the freight forwarder) was with Allahabad.  He noted the problem was that by a letter dated 6 May 2013 from World-Gain to Huihuang, it was stated that the original bill of lading as issued by World-Gain had to be surrendered to them for issuance of a fresh bill of lading by Yang Ming.

15.  The other matter concerned the lodging of an inspection certificate issued by the beneficiary.  The judge referred to “a letter”[1] by Sanjay Hazra that he had not inspected the goods.

16.  The judge resolved the two issues in this way.  He was of the opinion that the court has only to see whether the terms and conditions of the letter of credit have been complied with.  It would appear that the original bill of lading had been lodged with Allahabad.  It is not for the court to probe further and see whether Sonex would be able to obtain delivery of the goods on the basis of the original bill of lading.  If Sonex cannot and a further bill of lading is necessary as appears to be the case, then there is fault on the part of Huihuang for which there is an independent remedy.  The court should not stop payment of the letter of credit for this reason.  As for the inspection certificate, Huihuang and Allahabad more or less agreed it was available, the court should not try to reopen this issue and it has to be taken at this point of time to be true that the inspection certificate was available for the purpose of honouring the letter of credit.  If there is any misrepresentation, a remedy lies later, but payment of the letter of credit cannot be stopped.

17.  The judge declined to restrain payment of the letter of credit.  He ordered payment of the Credit Sum to a receiver appointed by the court and invested in a short-term deposit.  Huihuang was to ensure that the goods after being properly inspected are delivered to Sonex.  Huihuang was to ensure handing over the bill of lading to Sonex within two weeks from the judgment and simultaneously facilitate inspection of the goods by Sanjay Hazra.  Thereafter, upon further order of the court, the receiver may release the Credit Sum to Huihuang.

18.  On 13 June 2013, Allahabad paid the Credit Sum to the receiver.  On 30 June 2013, the receiver placed the Credit Sum on a short term fixed deposit for one year.

19.  Huihuang lodged an appeal in the High Court of Calcutta in its civil appellate jurisdiction.  Judgment was given by the court (Ashim Kumar Banerjee, ACJ and Debangsu Basak J) on 8 November 2013.  The court agreed with Huihuang that once the Credit Sum was payable under the letter of credit and the judge was prima facie satisfied, there was no reason for the appointment of a receiver.  The order of the single judge was modified in that the receiver would be discharged.  The receiver was ordered to hand over the money to Huihuang who would keep it in a fixed deposit, and Huihuang was to hand over the fixed deposit receipt to the registrar of the court within a fortnight from the date of receipt of the money.  The court expressed a wish that Huihuang should co-operate with the other parties in getting delivery of the consignment and at the time of delivery of the goods the parties would have a joint inspection by an appropriate expert whose report would be kept in a sealed cover to be considered at the hearing of the suit.

20.  On 9 December 2013, the two justices sitting in the appellate jurisdiction disposed of another appeal in the same cause or matter.  It was brought by Sonex[2].  It would appear from the short judgment of the court that Sonex sought modification and/or clarification of the court order but the application was dismissed by the court.

21.  In the 1^st affirmation of Sharma Prakash Chandra filed in August 2015 in support of Allahabad’s strike out summons in Hong Kong, it was stated in §18 that the Credit Sum has been further renewed and the “current maturity date” was 30 June 2016.  A copy of the latest deposit receipt was exhibited but the deposit was still held in the name of the receiver, apparently contrary to the order of the court on 8 November 2013.  We have no explanation for this.

(d) The proceedings in China

22.  On 17 April 2013[3], while the proceedings in India were on foot and before judgment was given, Huihuang brought a claim against Allahabad in the Shenzhen Intermediate People’s Court in respect of Allahabad’s refusal to pay the Credit Sum under the letter of credit.  Allahabad did not take part in the proceedings in China.

23.  On 12 December 2013[4], the court in Shenzhen gave judgment in favour of Huihuang, holding that the notice of refusal given by Allahabad on 10 January 2013 did not satisfy the requirements of UCP 600 and its refusal to honour the letter of credit constituted a breach of contract.  Allahabad was ordered to pay to Huihuang the Credit Sum with interest, fees and costs within three days from the effective date of the decision.

24.  Huihuang has not been able to enforce the judgment of the Shenzhen court in the PRC as Allahabad has no assets in the country, having closed its branch office in Shenzhen in 2014.

(e) The proceedings in Hong Kong

25.  On 14 May 2015, Huihuang issued a writ in this action against Allahabad, claiming that in breach of the letter of credit, it had failed and/or refused to honour the letter of credit and pay the Credit Sum to Huihuang.  It is also pleaded that Huihuang has obtained judgment against Allahabad in the PRC and it is entitled to be paid the judgment awards of the Shenzhen court.

26.  Allahabad issued the present summons on 31 August 2015 to strike out and dismiss the claim of Huihuang in this action, under Order 18 rule 19 and the inherent jurisdiction of the court, on the basis that the matter has already been litigated and adjudicated twice in India and the PRC and it is an abuse of process to re-litigate the same matter for a third time in Hong Kong.  Further, Allahabad has already made payment of the Credit Sum in accordance with the orders of the High Court of Calcutta and its obligation under the letter of credit is discharged and cannot be liable to Huihuang for the same amount again.

The judgment below

27.  DHCJ Saunders held that the High Court of Calcutta has comprehensively resolved the issue of the letter of credit as between Allahabad and Huihuang and “it is difficult to imagine a clearer case of res judicata” (§20).  Huihuang litigated as the beneficiary of the letter of credit in both the proceedings in India and Hong Kong and Allahabad litigated in precisely the same capacity as the issuing bank in respect of the letter of credit in the proceedings in the two jurisdictions.  The arguments made by Sonex in the proceedings in India do not impact on the capacity or rights of Huihuang or Allahabad.  The main issue in the proceedings in India (namely, whether Allahabad should pay to Huihuang the Credit Sum due under the letter of credit) is precisely the issue Huihuang sought to raise against Allahabad in the proceedings in Hong Kong (§22).

28.  The judge is therefore satisfied that the doctrine of res judicata and the existence of the Calcutta judgment render the Hong Kong proceedings on the letter of credit an abuse of process (§23).  He held that if there is an issue in respect of the original bill of lading and Huihuang cannot get the co-operation of the other parties, the proper remedy is to go to the Calcutta court, which plainly has jurisdiction over the matter, and a lack of co-operation of the parties in Calcutta is no basis to bring new, identical proceedings in Hong Kong (§26).

29.  Insofar as the Hong Kong proceedings are brought to enforce the PRC judgment, and are not an action on the letter of credit, the judge applied the principle that an action on a foreign judgment is not sustainable where that foreign judgment is contrary to principles of public policy and an abuse of the process of the court is plainly contrary to public policy.  It would be contrary to public policy to enforce the PRC judgment in Hong Kong in that the judgment was obtained in a manner that would be considered an abuse of process in Hong Kong (§§28 and 29).  Further, he held that the PRC judgment conflicts with the judgment of the Calcutta court when it comes to enforcement, and applied the principle that where there are conflicting foreign judgments, the court should give effect to the first in time to the exclusion of the other (§30).

The issues in this appeal

30.  Mr Joseph Wong, who appeared for Huihuang in this appeal but not below, sought leave to amend the notice of appeal.  Mr Ken To for Allahabad opposed parts of the amendment.  For reasons to be mentioned later, we refused leave to amend those parts as opposed.

31.  The broad issues and contentions raised by Huihuang in this appeal may be stated as follows:

(1) The judge has completely failed to address the allegations raised by Huihuang in its opposing affirmation that the orders in the Indian proceedings were obtained by fraud, and allegations of fraud constitute an exception to res judicata. The Sanjay Hazra email was a forged document.  And the High Court of Calcutta was deceived regarding the practice of the presentation of the original bill of lading to obtain delivery of the goods at the port of loading office.

(2) The judge made a number of factual errors and findings.  He held that Huihuang holds the Credit Sum on fixed deposit and it holds the fixed deposit receipt, when that is not the position.  He made two errors about the date of commencement of the PRC proceedings and the date of handing down of the judgment.  He wrongly held in §12 that when Huihuang issued the PRC proceedings, it had obtained judgment in Calcutta and was legally in possession of the Credit Sum held on fixed deposit.  He wrongly held in §13 that Huihuang did not inform the Shenzhen court of the judgment it had obtained in Calcutta, or that the Credit Sum had been received by Huihuang subject to the production of documentation.

(3) The judge failed to find that the Calcutta judgment is not final and conclusive for the purpose of res judicata.

(4) The judge failed to find there was no abuse of process in the peculiar circumstances in this case in which Huihuang obtained two “empty” judgments in its favour.

(5) The judge was wrong to hold that enforcement of the PRC judgment constitutes an abuse of process applying the principle the earlier in time prevails.

The allegations of fraud

32.  Before dealing with the allegations of fraud, we will set out the relevant legal principles.

33.  A foreign judgment relied on as such in proceedings in Hong Kong is impeachable for fraud. Such fraud may be either fraud on the part of the party in whose favour the judgment is given, or fraud on the part of the court pronouncing the judgment (Dicey, Morris & Collins on The Conflict of Laws, 15^th ed (2012), rule 50).  It seems that the fraud of another party to the foreign lawsuit, or of a witness or other person, will not suffice (The Conflict of Laws in Hong Kong by Graeme Johnston, 2^nd ed (2012), §9.032).

34.  As stated in WFM Motors Pty Ltd v Maydwell [1996] 1 HKC 444 at 449C to E, the principles to be applied are as follows:

“First, the court is not retrying the case. The question is not whether the decision of the foreign court was correct. Secondly, however, where fraud is alleged it is permissible in an appropriate case to examine the evidence to consider whether or not the evidence given at the trial was fraudulent. Thirdly, it follows that this can be done even when the very points that are put forward have already been considered and dismissed by the foreign court. An allegation of fraud is always serious and the defendant must particularize the fraud with precision and then establish it to the appropriate standard.”

35.  To establish fraud for this purpose, fraud must be demonstrated to a standard commensurate with the gravity of the allegations.  Where allegations of fraud have been made and determined abroad, summary judgment or striking out in subsequent proceedings are appropriate remedies in the absence of plausible evidence disclosing at least a prima facie case of fraud (WFM Motors Pty Ltd v Maydwell at 450B to C; Owens Bank Ltd v Etoile Commerciale S.A. [1995] 1 WLR 44 at 51C).

36.  As to what level of causation may justify impeaching the foreign judgment, the same approach to causation as is applicable in respect of domestic judgments should be adopted, namely, whether the alleged fraud would in all probability have had a material effect on the judgment (The Conflict of Laws in Hong Kong, §9.036, and footnote 115).

37.  Huihuang made two allegations as to fraud in seeking to impeach the judgments in the proceedings in India.

38.  In support of its allegation that the Sanjay Hazra email produced to the High Court of Calcutta was a forged document, Huihuang adduced an email from Sanjay Hazra to it dated 18 February 2013 stating that he did not send the Sanjay Hazra email.  Mr Wong submitted this constituted a prima facie case of fraud and Allahabad did not put forward any evidence to rebut it.

39.  It is denied by Allahabad in the affirmation in reply[5] that the email correspondence alleged to be false was put before the High Court of Calcutta.  We note it is the evidence of Huihuang[6] that the Sanjay Hazra email was produced by Sonex, not by Allahabad.  We do not think it necessary to resolve the dispute whether Allahabad had placed before the court the Sanjay Hazra email.  As mentioned earlier, in the judgment of Justice I. P. Mukerji on 6 May 2013, he said that as Huihuang and Allahabad more or less agreed the inspection certificate was available, the court should not try to reopen this issue and it has to be taken at this point of time to be true that the inspection certificate was available for the purpose of honouring the letter of credit.  So even if the Sanjay Hazra email was forged, it would not have any material impact on the judgment of the court.

40.  The other allegation is that Allahabad deceived the High Court of Calcutta that presentation of the original bill of lading for the goods was required from Huihuang “for effective enforcement of the Calcutta Judgment” even though Huihuang had already surrendered the original bill of lading to Allahabad[7], citing §§9 to 10 and 14 to 15 of the 1^st affirmation of Deng Sheng.

41.  As pointed out by Mr To, in none of these paragraphs was it suggested that Allahabad had deceived the courts in India.  What was deposed to in those paragraphs is that there is a common practice for forwarders to issue their own bill of lading instead of using the bill of lading issued by carriers, and it was asserted by Huihuang’s deponent that “the bill of lading by forwarders should be as good as that of carriers as to obtaining order for delivery at the port of loading office.”[8]

42.  It would appear from the judgment of the High Court of Calcutta on 6 May 2013 that from the production and inspection of the bank records, it was confirmed that the original bill of lading issued by the forwarder, World-Gain, had been surrendered by Huihuang to Allahabad.  Reference was made in the judgment to a letter dated 6 May 2013 from World-Gain to Huihuang that the original bill of lading issued by World-Gain had to be surrendered to them for issuance of a fresh bill of lading by the carrier Yang Ming.  That accorded by and large with the statement in §15 of the 1^st affirmation of Deng Sheng that “to obtain a bill of lading by Yangming, [Allahabad] shall surrender the original bill of lading [issued by World-Gain] to [World-Gain] for its fresh issuance of that by Yangming.”  The only difference is the allegation in Deng Sheng’s affirmation it is the obligation of Allahabad to surrender the original bill of lading issued by World-Gain and that Allahabad had failed and/or refused to do so.

43.  It is apparent from the judgment of 6 May 2013 that the judge was fully aware of the problem arising from the letter of World-Gain to Huihuang dated 6 May 2013.  Nevertheless, the court declined to probe further and see whether Sonex would be able to obtain delivery of the goods on the basis of the original bill of lading issued by World-Gain that had been lodged with Allahabad or whether a further bill of lading from the carrier was required.  In the judgment of 8 November 2013 of the appellate division, the court expressed a wish that Huihuang should co-operate with the other parties in getting delivery of the consignment.

44.  Quite clearly, the allegations of fraud are not made out.  There is not even a prima facie case that the judgments were obtained by fraud.  This ground of impeachment of the judgments obtained in the proceedings in India fails.

The factual errors

45.  DHCJ Saunders mentioned several times in his judgment that the Credit Sum paid by Allahabad pursuant to the orders of the High Court of Calcutta has been placed on fixed deposit by Huihuang and Huihuang holds fixed deposit receipt, so that the sum claimed has been received by Huihuang subject to the production of documentation[9]. This is factually incorrect.  As mentioned earlier, according to a legible copy of the last fixed deposit receipt adduced in evidence with a maturity date of 30 June 2016[10], the Credit Sum was placed on fixed deposit in the name of the receiver, not Huihuang.  It is not necessary to ascertain why and how the errors were made.

46.  Mr Wong submitted these errors played a material part in the judge’s holding that the proceedings in Hong Kong constituted an abuse of process and should be struck out.  He contended that had the judge found Huihuang has not received the Credit Sum, he would have concluded that the judgment of the High Court of Calcutta remains an empty judgment and it would not constitute an abuse of process to bring proceedings in Hong Kong.

47.  The judge was also mistaken about the dates when the PRC proceedings were brought and when judgment was given.  In §12 of the judgment, he stated that Huihuang issued proceedings in the PRC on 21 August 2013 although it had obtained judgment in Calcutta, which was not the case.  In §13 of the judgment, he stated that it is clear from the judgment of the PRC court on 9 April 2014 that Huihuang did not inform that court of the judgment it had obtained in Calcutta, nor that the sum claimed had been received by Huihuang subject to the production of documentation.  Mr Wong contended that the order made by the appellate division that the Credit Sum be handed over from the receiver to Huihuang was just a month before the PRC judgment was given on 12 December 2013, so the judge’s finding that Huihuang did not inform the PRC court of such matters when it should have done so was not sustainable.

48.  As in the other errors, Mr Wong submitted that insofar as the judge had relied on the erroneous dates in concluding that the enforcement of the PRC proceedings by bringing an action in Hong Kong constituted an abuse of process, his conclusion was based on wrong factual matters and should not be upheld.

49.  We do not think any of the factual errors should make any significant difference to the material findings of the judge on res judicata in §§20, 22, 23 and 26 of his judgment as I have summarized earlier.  To recap, the judge has found that the judgments obtained in the High Court of Calcutta have comprehensively resolved the issue of the letter of credit as between Allahabad and Huihuang, that these parties have litigated in precisely the same capacity in respect of the letter of credit in both the proceedings in India and Hong Kong, and that the main issue in both proceedings are the same. Hence the doctrine of res judicata and the existence of the Calcutta judgments render the Hong Kong proceedings an abuse of process.  This is not res judicata in the wider sense (as Mr Wong rightly recognized) but res judicata in its narrower sense.  It is a cause of action estoppel or an issue estoppel, and, once established, it gives rise to an absolute bar to litigation.  Unlike res judicata in the wider sense, in this instance, the court is not concerned with balancing interests, nor is it required to assess a number of factors and balance competing interests (Ko Hon Yue v Chiu Pik Yuk (2012) 15 HKCFAR 72 at §83(5)).

50.  The factual errors made by the judge have simply no bearing to his resolution of the matter in issue, namely, whether the doctrine of res judicata and the existence of the Calcutta judgments render the Hong Kong proceedings an abuse of process.  It is not necessary to deal with Mr To’s submission that notwithstanding the judge’s error about the relevant dates of the PRC judgment, Huihuang had not informed the Shenzhen court at the hearing on 21 August 2013 of the judgment given by the High Court of Calcutta on 6 May 2013 and that Allahabad had paid the Credit Sum under the letter of credit to the court-appointed receiver in June 2013.

Final and conclusive judgment

51.  Mr Wong submitted that the Calcutta judgments are not final and conclusive for the purpose of res judicata, as the orders made by the different levels of court in the High Court of Calcutta have posed practical difficulties to the parties, they are provisional in nature and they leave the parties in doubt as to their rights and liabilities.

52.  We do not accept his submission.  The alleged difficulties regarding the surrendering of the original bill of lading issued by the forwarder World-Gain for the issuance of a fresh bill of lading by the carrier Yang Mingdo not render the rights and liabilities of Huihuang and Allahabad as adjudicated by the High Court of Calcutta uncertain or ambiguous.  As submitted by Mr To, the relevant issue was whether payment should be made by Allahabad on the letter of credit when the documents were presented by Huihuang and this issue was determined in favour of Huihuang finally and conclusively.

The difficulties in enforcing two “empty” judgments

53.  By the proposed amendments in the notice of appeal, Mr Wong contended here in holding that the Hong Kong proceedings amounted to an abuse of process, the judge was in error in failing to consider that in practice Huihuang has not been able to enforce the judgments in its favour obtained in proceedings in India and the PRC so in that sense they were “empty judgments”, that Huihuang has exhausted all remedies in bringing two appeals[11] in the High Court of Calcutta to vary the orders without success, and that there were no claims or issues which could and should have been raised in earlier proceedings but were not.

54.  Mr To opposed the proposed amendments as they raise matters of fact and foreign law for which no evidence was adduced by Huihuang in the court below.  It would also appear from the transcript that DHCJ Saunders had raised with the former counsel for Huihuang that any issue arising out of the enforcement of the order made by the High Court of Calcutta should be sorted out in that court, and there is no evidence that Huihuang has done anything since judgment was given by the appellate division on its appeal[12]. Mr To submitted that Allahabad would be prejudiced by not having the opportunity to respond to the propositions raised in the proposed amendments concerning the law and practice in India and the PRC.

55.  The contention that the judge has failed to take various matters into account in holding that the Hong Kong proceedings amounted to an abuse of process is based on the premise that res judicata in the wider sense is invoked, such that the court is required to assess different factors and balance competing interests.  These considerations have no bearing to res judicata in the narrower sense, which governs the present situation.  The proposed amendments to the notice of appeal are untenable.  Leave to amend that part of the notice of appeal should not be given in the circumstances.

56.  Allahabad has paid the Credit Sum that is now held in a fixed deposit, and this sum is to be released to Huihuang by a further order to be made in the proceedings in India.  As rightly held by DHCJ Saunders, if there is an issue about the original bill of lading and Huihuang cannot get the co-operation of the other parties, the proper remedy is to go to the High Court of Calcutta which plainly has jurisdiction over the matter.

Conflicting foreign judgments and the earlier in time principle

57.  It was submitted on behalf of Huihuang that the judge was in error in holding that there are two conflicting foreign judgments so that the principle that the court should give effect to the judgment first in time should apply.  Mr Wong submitted that the Calcutta judgment was not in conflict with the PRC judgment but they are consistent with each other.

58.  Mr To argued to the contrary.  Although the two foreign judgments provide consistent decisions on the substantive issue, they are conflicting as to the form of remedy given.  So the principle that the judgment first in time should be given effect to should apply as the foreign judgments are incompatible.

59.  Mr Wong submitted there is no relevant decided case comparable to the present situation and this is an additional reason why the claim should not be struck out as this may involve a novel point of law.

60.  We do not think it necessary to express any view on this peripheral issue, which does not affect the outcome of the judge’s decision.  Once it is held that the Hong Kong proceedings should be struck out because of the absolute bar to litigation arising from res judicata on account of the final and conclusive judgments obtained in India, Huihuang cannot be heard to say it should be permitted to bring an action to enforce the subsequent PRC judgment, irrespective of whether the PRC judgment can be regarded as final and conclusive for enforcement purpose (Chiyu Banking Corporation Ltd v Chan Tin Kwun [1996] 2 HKLR 396; Lee Yau Wing v Lee Shui Kwan [2007] 2 HKLRD 749).

61.  We do not find it necessary to deal with the respondent’s notice of Allahabad, which does not add anything of consequence to the pertinent issues.

Conclusion and costs

62.  We therefore dismissed the appeal with costs to Allahabad.

63.  At the hearing, Allahabad submitted a statement of costs for summary assessment in the total sum of $197,971.  We allowed Huihuang to make submission in writing on the statement of costs submitted by Allahabad within 7 days.  Huihuang has since submitted that the reasonable costs of Allahabad on appeal should be assessed at $100,000, pointing out that the costs of the hearings before a Master and before DHCJ Saunders were assessed at $100,000 and $101,914 respectively and that the appeal before this court was just a re-hearing on the same materials.  Huihuang further contended the costs allowed should be further reduced to 70% as this appeal was “prompted by the making of a number of factual errors and the omission from consideration of crucial evidence” by the judge.

64.  We had decided at the conclusion of the appeal to dismiss it with costs to Allahabad.  The leave given to Huihuang to make submission on costs after the hearing is limited to the quantum of costs that should be allowed in the summary assessment.  We did not give leave to Huihuang to re-open the question of liability to pay costs, or to argue that they should only be liable for part of the costs allowed to the other party on taxation.  That was why we did not provide for leave to Allahabad to respond to Huihuang’s submission.  In any event, we would not have reduced the costs allowed to Allahabad as it is the successful party overall, and the errors and omissions raised by Huihuang made no difference whatsoever to the outcome.

65.  We tax down the costs of the appeal before us to $151,171.