CITICORP INTERNATIONAL LTD v. SHENZHEN SEZ CONSTRUCTION AND DEVELOPMENT GROUP CO., LTD

HCA 1054/2024

[2026] HKCFI 4665

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1054 OF 2024

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D E C I S I O N

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A. INTRODUCTION

1.  This is the plaintiff’s application for the case to be assigned to a trial judge and that the upcoming hearing of the case management summons (“CMS”), fixed for 12 October 2026 before a master, be adjourned or brought forward to be heard by the trial judge no earlier than 6 October 2026 and that all interlocutory applications be heard by that judge.

2.  The defendant resists this application on the grounds that this case has been progressing efficiently under existing arrangements, that there is no procedural benefit to assignment to a trial judge has been identified and that it is premature to do the assignment.  However, if the court is to assign to a trial judge now, the Defendant suggests that the judge should be bilingual.

B.   BACKGROUND

3.  The Plaintiff is a trustee for noteholders of US$1.33 billion defaulted notes (“the Notes”) issued by China South City Holdings Ltd (“the Issuer”).

4.  The Defendant allegedly breached its obligations under certain keepwell deeds governed by Hong Kong law, i.e. to keep the Issuer solvent and sufficiently liquid to meet its payment obligations under the Notes (“the Keepwell Obligations”).

5.  The defence is that it was unable to perform the Keepwell Obligations because the Defendant could not obtain certain Relevant approvals (“Relevant Approvals”) allegedly required under PRC law for it to perform.

6.  In reply the Plaintiff disputes:

(1)  Whether the PRC laws relied on by the Defendant require the Relevant Approvals to be obtained;

(2)  Whether the Defendant had used its “best efforts” (as required under the Keepwell Deeds) to obtain the Relevant Approvals; and

(3)  Whether the Defendant could have performed the Keepwell Obligations without the Relevant Approvals in any event.

7.  The Defendant acted under unless orders from filing and amendment of pleadings, filing of list of documents, and exchange of witness statements. 

8.  The Plaintiff also sought multiple extensions, including 2 for its Rely and Defence to Counterclaim, 1 for its Amended Reply and Defence to Counterclaim and an extension for the exchange of witness statements.  The parties also jointly extended the deadline for exchange of expert reports by 14 days.

9.  Despite the cross allegations of delay, the action has reached a stage where pleadings have closed, discovery was completed, witness statements have been exchanged, expert reports have been exchanged and a joint statement is to be filed by the experts by 22 September 2026.  The parties are to obtain counsel’s advice within 14 days of the joint statement and any interlocutory application must be taken out within 14 days thereafter.  Master E Liu has set a timetable for, amongst others, a further CMS hearing to be held on 12 October 2026.

10.  The Defendant expects that there may be further interlocutory applications or otherwise after the joint statement of experts is filed and the parties have obtained counsel’s advice.

C.   LEGAL PRINCIPLES

11.  The Court has power to assign the case to a trial judge pursuant to §4.3 of PD 5.7, which provides that:

“Where all the parties to an action are not in agreement that the trial is likely to last 15 days or longer, any party may apply at any time after the close of pleadings to have the matter assigned to a trial judge. Such application shall be made by summons to the Listing Judge in chambers. The Judge may make an order assigning a case to a trial Judge notwithstanding that the case is not likely to last 15 days if, by reason of the complexity of the case or otherwise, he considers it advantageous to the proper conduct of the proceedings that it should be so assigned.”

12.  By a letter of the then Listing Judge (J Poon J, as he then was) dated 5 July 2013, that practice in the preceding paragraph extends to trials estimated to last 10-14 days as well.

D.   CASE SUITABLE FOR ASSIGNMENT TO TRIAL JUDGE

13.  The parties could not agree on the question of assignment and length of trial, hence this summons. This case is, in my view, suitable for assignment to a trial judge now because:

(1)  This case bears the hallmarks of an indisputably complex case with a trial of at least 10 days (as the Plaintiff suggests).  The Court is required to resolve cross-border tension between:

(a)  The proper construction of the Defendant’s contractual obligations under keepwell deeds as a matter of Hong Kong law; and

(b)  Whether those obligations were breached by reference to alleged practical restraints under PRC law.  The Defendant admits that issues on PRC laws are, at least on paper, wide ranging.

(2)  The amended defence and counterclaim is 66 pages long.  The amended reply and defence to counterclaim is 45 pages long.

(3)  The list of issues for experts is 20 pages long.  There will be 4 experts on PRC law and regulations, and performance of financial instruments.

(4)  The amount at stake is at least US$1.4 billion in damages; and

(5)  The action has reached an advanced state.

14.  The Defendant’s first ground in opposition is that this case has been progressing efficiently under existing arrangements.  That appears to be so.  Despite the cross-allegations as to delay on each side, I consider that spending 2 years for the case to reach its present state is not unreasonable, given the scale and seriousness of the dispute.

15.  However, having effective case management at the Master’s level should not prevent a long case from being assigned to a trial judge for further management as early as possible.  Trial dates do not have to be fixed now until the parties have addressed the judge at the Initial Case Management Conference.  By then, the joint statement of experts would be ready.  With counsel’s advice, trial estimates can be given.  The parties can use the time leading up to the trial to deal with further interlocutory applications, if any.

16.  The second ground in opposition is that no procedural benefit to assignment has been identified, which cannot be achieved at the CMS to be held on 12 October 2026 before a Master.  The Defendant cites the case of Zhao Long v Berpu Technology Co Ltd [2023] HKCFI1795, Au‑Yeung J,wherein this Court deferred the assignment of a trial judge until after fresh pleadings were filed, on the basis that “the complexity of issues and procedural needs will become clearer to enable a decision on whether to assign a judge and which judge to assign to be made” (§25).  The case was docketed to a Master for efficient case management in the meantime.

17.  With respect, whether to assign a trial judge is often fact sensitive.  Not much purpose can be served by comparing factual circumstances in another case.  Zhao Long is starkly distinguishable because the request for assignment of a judge was made at a stage when the pleadings were not resolved.  The parties had already filed 5 sets of pleadings and the defendant was seeking leave to file a rebutter.  It was simply not possible to even identify the issues. 

18.  The present case is completely different.  The case has reached the stage of seeking expert evidence.  It can hardly be said that issues have not yet been identified.  However, the length of pleadings and expert issues speak for themselves.  Whether or not, to limit the issues, allow further interlocutory applications or further expert evidence are all matters fit for the assigned judge.  Once he/she has charted the course, the matter can always be reverted to a Master to manage the progress.  It cannot be said that there is no procedural benefit to assign the case to a judge.

19.  The third ground in opposition is that the reasons put forth are not sufficient to warrant assignment of a judge at this stage.

(1)  The Defendant says that it is not possible to estimate the dates needed for trial at present.  Until the experts identify their points of agreement and disagreement in the joint statement, neither the parties nor the Court can know how many expert issues will require determination at trial, or what trial length will ultimately be appropriate.  Until then, complexity alone does not warrant assignment. What matters is whether assignment is advantageous to the proper conduct of the proceedings.  With respect, the volume of expert issues is often one of the reasons why a trial judge should exercise control as early as possible in a complex case.  As to length of trial, by the time of the initial CMC, the joint statement of experts would be ready for deciding the future course and proper estimation of trial dates.

(2)  The Defendant refers to the Plaintiff’s statement that “the Plaintiff believes it will have enough materials to participate in a meaningful mediation after filing of expert reports.”  If the Plaintiff recognizes that the materials are not yet sufficient for a meaningful engagement on the merits, it is difficult to see how the Court can be invited to conclude that the case is ready for assignment to a trial judge.  With respect, I disagree.  There is no automatic stay of proceedings to facilitate mediation.  Accordingly, case management can still proceed.  The assigned judge can always prescribe the timeframe for mediation so that there can be some certainty as to whether and when the trial dates can be fixed.

20.  For the reasons given, I direct that this case be assigned to a judge now.  The upcoming CMS shall be returnable before him/her, so that he/she can decide:

(1)  Whether any interlocutory applications (which must be taken out before that CMS) are meritorious; and

(2)  If such applications do proceed, whether trial dates should nonetheless be fixed and the number of days to be fixed, so the parties can work to prescribed milestones.

E.   BILINGUAL JUDGE 

21.  The Defendant claims that it is necessary to assign to a bilingual judge because the expert evidence, which is central to the determination of this action, concerns PRC laws and regulations.  The Defendant has disclosed more than 160 Chinese documents, including PRC legislation, government policies and internal corporate materials.  The 4 defence witnesses as to facts speak Putonghua. 

22.  The Plaintiff says that it is not necessary as the key documents relied on by the parties’ experts, the defence witnesses’ statements, and key PRC legal provisions and articles have all been translated as required by Master Hui’s order dated 31 March 2026.  All the expert reports have been produced in English or bilingual form as directed.  For untranslated documents or witnesses’ evidence, interpretation can be provided at the trial. 

23.  It would of course assist in the efficient disposal of this action if the trial judge is bilingual.  However, it is also important to take into account the Court’s diary position.  Given the state in which translations have been done, a monolingual judge can still effectively handle the trial.  Indeed the 2 prior keepwell cases[1] were tried by a monolingual judge and PRC law and personnel featured in those cases.

F.   CONCLUSION

24.  For the reasons given, this case shall be assigned to a trial judge.  There be a CMS hearing before the judge, not before 12 October 2026, with 30 minutes reserved.  The CMS hearing before a Master on 12 October 2026 be vacated.  All future interlocutory applications shall be listed before the trial judge.  The request for a bilingual judge is declined.

25.  As this is a case management matter, I make an order nisi that costs of the summons shall be in the cause.