KOOLAN IRON ORE PTY LTD v. RIZHAO STEEL HOLDING GROUP CO LTD

HCCT 25/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 25 OF 2011

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AND

HCCT 26/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO. 26 OF 2011

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D E C I S I O N

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1.  On 7 June 2011, upon ex parte application, I made orders pursuant to s. 2GG Arbitration Ordinance (Cap. 341), giving leave to the Applicants to enforce final arbitration awards delivered on 16 August 2010 against the Respondent in the same manner as a Hong Kong judgment.

2.  At the same time I made orders that the Applicants be at liberty to effect service of the order on the Respondent by way of serving the order by personal delivery to the corporate secretary of Rizhao Steel Holding Group (Hong Kong) Company Ltd a wholly-owned subsidiary of the Respondent, (the subsidiary).

3.  Now, in both proceedings, the Respondent seeks to set aside the order for service, a declaration that the order giving leave to enforce the arbitration awards have not been duly served, and ancillary orders.

4.  Out of an abundance of caution, the Applicants seek a declaration that due service has been effected.

5.  The affidavit in support of the original application set out steps that the Applicants have taken to enforce the arbitration awards in Western Australia, mainland China, and in New York.  There are grounds upon which it may be said that the Respondent is taking every possible step to delay the enforcement of the award.

6.  The Respondent contends that an order for substituted service should be made under O 65 r 4 only if it is established that it is impracticable to serve in the normal manner.  The submission fails to appreciate that an order for service of an order giving leave to enforce an arbitration award in the same manner as a judgment is not made under O 65 r 4, but under O 73 r 10(4) which provides:

“An order giving leave must be drawn up by or on behalf of the creditor and must be served on the debtor by delivering a copy to him personally or by sending a copy to him at his usual or last known place of abode or business or in such other manner as the Court may direct.”

7.  It is right that the Applicants sought an order under O 65 r 4, but it need not have done so and it makes no difference that the order may have been couched in those terms.  The court has an extremely wide discretion in respect of service of an order permitting the enforcement of an arbitration award, which is entirely appropriate when having regard to the pro-enforcement approach adopted both by the relevant legislation and the courts in Hong Kong and courts internationally.  Whilst issues of impracticability of service might arise under O 65, they do not arise under O 73.

8.  The purpose of service is to ensure that proceedings are properly brought to the notice of a party.  In the present case service was ordered on the company secretary of a wholly owned subsidiary of the Respondent.  It is plain that such service would be effective in bringing the proceedings to the notice of the Respondent.

9.  Other than an issue as to whether the proceedings were served at the office of the corporate secretary of the subsidiary, no suggestion is made that the Respondent is not fully aware of the steps that are being taken in Hong Kong.

10.  The corporate secretary identified in the Companies Registry in Hong Kong for the subsidiary, is Joy Enterprise Secretary Services Ltd.  The records of the Companies Office in respect of the subsidiary show its registered office to be Room 1105, Lippo Centre Tower 1, 89 Queensway, Admiralty, Hong Kong.  Service was effected at that address and a letter acknowledging service was duly chopped with the chop of Joy Enterprises Secretary Services Limited.

11.  The Respondent takes the point that the address identified in the Companies Registry in Hong Kong for Joy Enterprise Secretary Services Ltd is Room 19C, Lockhart Centre, 301-307 Lockhart Road, Wan Chai, Hong Kong and says that service ought to have been effected there.  The point is bad, because the requirement is to serve at the address of the company secretary given in the corporate records of the subsidiary, so the service was good.  That is plain from the chop endorsed on the letter acknowledging service.

12.  In any event the point is not one that is open to the Respondent to take.  If the address of its subsidiary’s corporate secretary has changed the obligation lies, initially with the subsidiary, but ultimately with the Respondent, to ensure that the records are kept up to date.

13.  If there was any merit in the point it has in any event been remedied because service has been effected at the Lockhart Road address.

14.  The points taken in opposition to service are entirely without merit.  There will be a declaration that the orders of 7 June 2011, have been duly served on the Respondent, on 28 June 2011, by leaving those orders at Room 19C, Lockhart Centre, 301-307 Lockhart Road, Wan Chai, Hong Kong.

15.  The Respondent seeks an order extending the time to apply to set aside the orders granting leave to enforce the awards, to enable the Respondent to appeal, if appropriate from the orders made today. That is as plain a delaying tactic as I have ever seen.  There was absolutely no merit whatsoever in the service point and no reason at all to further delay the enforcement of these awards, which are now nearly a year old.  The application to extend time is refused.  The Respondent has had more than ample time to determine whether or not it has any basis at all to challenge the awards.  If it has, it must file its application to set aside the enforcement orders.

16.  The Respondent must pay the Applicants’ costs on both summonses, in each action, which are to be paid forthwith, taxed on a party and party basis if not agreed.