IPS INTERNATIONAL POLYSACKS GMBH v.INTERSACK HONG KONG LTD AND OTHERS

HCCW 322/2018 and

HCCW 323/2018      

(Heard Together)      

[2019] HKCFI 1336

HCCW 322/2018

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP) PROCEEDINGS NO 322 OF 2018

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COMPANIES (WINDING-UP) PROCEEDINGS NO 323 OF 2018

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(Heard Together)

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D E C I S I O N

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A. INTRODUCTION

1.  The Petitioner filed a petition in relation to Intersack Hong Kong Limited (in HCCW 322/2018) and Intersack Holdings Limited (in HCCW 323/2018), complaining of unfair prejudice and seeking to wind up the companies on the just and equitable ground.

2.  In each case, the Petitioner says that:

(1)  it and the 3^rd Respondent (“Phil Park”) each hold 50% shares in the company, with Phil Park being the nominee shareholder for his father, the 2^nd Respondent (“CK Park”); 

(2)  one of the beneficial owners of the Petitioner, Thomas Noor (“Thomas Noor”), and Phil Park were directors of the company;

(3)  CK Park and Phil Park entered into a Memorandum of Understanding (“the MOU”) with Dr Kurt Gross acting as a trustee or representative of the Petitioner, for the establishment and operation of various joint venture companies;

(4)  CK Park acted in breach of the MOU and conducted the affairs of the joint venture companies in a manner oppressive and unfairly prejudicial to the Petitioner, including diverting business away from Intersack Hong Kong Limited, and misappropriating profits and funds of the joint venture companies.

3.  The petitions were filed on 9 November 2018.  The Petitioner was able to serve CK Park, but not Phil Park; the Petitioner applied for service on Phil Park in Korea under the Hague Convention.

4.  By a letter of 27 December 2018, CK Park’s then solicitors, Messrs Kim & Company, complained that the petitions had been filed in breach of clause 14 of the MOU, which provided that the parties would refer any dispute not amicably resolved to the arbitration committee of the Hong Kong Chamber of Commerce for arbitration.

5.  By letter of 10 January 2019, the Petitioner’s solicitors, Messrs Ho & Associates, proposed, inter alia, a stay of the petitions pending arbitration, save that the Petitioner could take such steps as reasonably necessary to effect service on Phil Park.

6.  On 21 January 2019, the Petitioner was granted leave to serve the petitions on Phil Park.

7.  On 14 March 2019, the Petitioner applied to the Hong Kong International Arbitration Centre for a decision on the number of arbitrators under section 23 of the Arbitration Ordinance.  On 22 March 2019, the Petitioner issued a notice of arbitration to Phil Park and CK Park.

8.  On 4 April 2019, the Chief Secretary for Administration transmitted a request to the Korean authorities for service of the petitions on Phil Park, pursuant to article 5 of the Hague Convention.

9.  By summonses of 9 April 2019 in each of HCCW 322/2018 and HCCW 323/2018 (“the Summonses”), CK Park applied for a stay of the proceedings sine die pending the outcome of arbitration and all arbitration-related proceedings on the grounds that the proceedings were scandalous, frivolous or vexatious, or otherwise an abuse of the process of the Court.

B.     THE PARTIES’ POSITIONS

10.  There is in fact very little difference between the parties.  As indicated in Messrs Ho & Associates’ letters of 10 April 2019 and 18 April 2019, the Petitioner is prepared to consent to a stay of the petitions pending arbitration, subject to its right to continue to take reasonable steps to serve the petitions onPhil Park.  CK Park does not agree that the stay should be on such terms.

11.  In his skeleton submissions, counsel for CK Park, Mr Moses Park, had complained that the Petitioner was also seeking to impose, as a term of the stay, that CK Park should forgo the right to challenge the validity of the (alleged) arbitration agreement between the parties.  However, at the hearing this morning, he accepted that the Petitioner was not, in fact, seekingto impose such a term.  Counsel for the Petitioner, Ms Tara Liao, had made it clear in her skeleton submissions that the Petitioner had not sought such a term.  I agree that it should have been clear from the correspondence that this was the Petitioner’s stance.  In particular, Messrs Ho & Associates’ letter of 18 April 2019 stated that:

“ In the circumstances, we reiterate our client’s position that it is prepared to consent to a stay of the Petitions pending arbitration,subject to its right to continue to take reasonable steps to serve the Petitions on the 3rd Respondent Mr Park Phil Woo. On that basis, we propose that the hearing fixed on 21 May 2019 be vacated and costs of the Summonses be reserved.”

12.  The only difference between the parties is therefore whether the stay of the petitions should be on terms that the Petitioner be allowed to serve Phil Park.

13.  However, no real argument has been put forward by CK Park as to why the Petitioner should not be allowed to serve Phil Park, the proceedings otherwise being stayed.  This morning, Mr Park made a general complaint that the conduct of the Petitioners was wrong in instituting multipleproceedings, but this does not go to the issue of why the Petitioner should not be allowed to serve Phil Park.  It is not disputed that the Court has power to impose conditions in the event of granting a stay.

14.  In the circumstances, I will order that the petitions in each of HCCW 322/2018 and HCCW 323/2018 be stayed pending the outcome of the arbitration pursuant to the Notice of Arbitration dated 22 March 2019 addressed to CK Park and Phil Park, save that the Petitioner may take reasonable steps to serve the petition on the 3^rd Respondent.

[The parties made further submissions on costs.]

15.  I further order that the costs of the Summonses should be paid by CK Park in any event, to be taxed if not agreed.