GREAT PACIFIC INVESTMENTS LTD v. 张华荣

HCA 13/2022

[2023] HKCFI 1539

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 13 OF 2022

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REASONS FOR DECISION

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1.  At the end of the hearing, I dismissed the defendant (“D”)’s appeal (“D’s Appeal”) against §1 of the Order of Master D To dated 13 February 2023 (“the Master’s Order”), by which the Master granted liberty to the plaintiff (“P”) to enter partial final judgment against D for the sum of RMB 55,000,000. I also allowed P’s application for final judgment by its summons dated 12 January 2023 (“P’s Summons”), entering judgment against D in the total sum of RMB 162,200,000 together with interest. I further made an order that costs of these proceedings, including costs of D’s Appeal, costs of P’s Summons and all costs reserved, be paid by D to P. Those costs be summarily assessed on an indemnity basis. These are my reasons for the decision.

2.  In the hearing before me, P was represented by Mr Jason Yu (together with Mr Charlie Liu), and D was represented by Mr Charles TC Wong.

Background

3.  The facts which are not in dispute are as follows:

(1)  P and D incorporated Hua Jian Industrial Holding Co Ltd (“Target Company”) in the British Virgin Islands. At the beginning, each of them held 50% of the Target Company’s shares.

(2)  On 22 March 2019, P, D and the Target Company entered into the《股份交易协议》 (“Main Agreement”) where D agreed to purchase P’s shares in the Target Company for the consideration of RMB 418,000,000.

(3)  D made part payment in the sum of RMB 230,641,800. Accordingly, P transferred 27.59% of the Target Company’s shares to D.

(4)  P and D entered into several supplemental agreements (“Supplemental Agreements”) to extend time for D to make further payments. By the《股权交易协议之补充协议（三）》dated 31 March 2021 (“3^rd Supplemental Agreement”), D agreed to pay P the balance of the consideration of RMB 167,200,000 together with interest thereon by 8 instalments between 30 October 2021 and 30 May 2022.

(5)  In April 2021, D paid the then accrued interest in the sum of RMB 7,617,357. From October to December 2021, D made further payments of the consideration and interest in the total sum of RMB 10,643,573.

4.  On 5 January 2022, P commenced these proceedings by issuing the writ of summons (“the Original Writ”) herein. P claimed the first 3 instalments that had fallen due under the 3^rd Supplemental Agreement as 3 sums of debt, which add to RMB 55,000,000. Specific performance was claimed for the remainder.

5.  As stipulated in the 3^rd Supplemental Agreement, RMB 20,000,000 fell due on 30 October 2021, RMB 20,000,000 fell due on 30 November 2021 and RMB 20,000,000 fell due on 30 December 2021. There is no dispute that before the commencement of these proceedings, D had made partial repayments of interest as well as RMB 5,000,000 as part of the 1^st instalment.

6.  On 11 August 2022, the High Court Registry received D’s acknowledgment of service of the Writ (“Original AS”). In the Original AS, D did not dispute and indicated that he would admit P’s claim.

7.  On the same day, D’s solicitor filed an affirmation, exhibiting a copy of D’s Form 16, where D admitted liability to pay RMB 59,172,192 to P and made a payment proposal.

8.  On 23 August 2022, P filed its Form 16B rejecting D’s part admission.

9.  On 2 September 2022, D’s notarised Form 16 admission (“Form 16”) was filed. In his Form 16, D again admitted liability to pay RMB 59,172,192 and proposed to pay in instalments up to 30 September 2023.

10.  On the same day, D filed a notarised affirmation in support of his application for payment according to his Form 16 proposal, where D admitted liability to pay RMB 55,000,000 plus interest thereon.

11.  On 27 September 2022, P amended the writ of summons to include all the sums that fell due (“the Amended Writ”). As per the Amended Writ, P is claiming for the total sum of RMB 167,200,000.

12.  On 10 October 2022, the High Court Registry received D’s acknowledgment of service of the Amended Writ (“the 2^nd AS”), in which D indicated that he would contest the claim as per the Amended Writ.

13.  On 14 November 2022, D filed the Defence.

14.  On 12 January 2023, P issued P’s Summons.

15.  On 10 February 2023, D’s counsel filed his skeleton submissions (“D’s Call-over Skeleton”). At §3(c) of that skeleton, D’s counsel stated that D “does not intend to dispute the principal amount of the claim of RMB55,000,000”.

16.  On 13 February 2023, in the call-over hearing of P’s Summons, Master D To granted leave to P to enter partial final judgment against D for the sum of RMB55,000,000 and interest.

17.  On 7 March 2023, D filed his notarised 2^nd affirmation in opposition to P’s Summons (“D’s 2^nd Affirmation”).

18.  Subsequently, P filed and served the affirmation of Yang Hsiao-Tung (“Yang’s Affirmation”) and 2^nd affirmation of Chau Chi Ming in reply (“Chau’s 2^nd Affirmation”) (“Reply Affirmations”).

19.  On 4 April 2023, P issued a summons to re-fix the hearing of the remainder of P’s Summons (initially to be heard before a Master) to the hearing of D’s Appeal or a hearing before a Judge (“Re-fixing Summons”).

20.  On 18 April 2023, at the hearing of D’s Appeal and the Re-fixing Summons, Au-Yeung J directed that (a) D’s Appeal be heard together with the balance of the sum in P’s Summons before a Judge, and (b) the Reply Affirmations shall not be relied on for D’s Appeal, but they can be relied on for P’s application for summary judgment.

P’s Summons

21.  By P’s Summons, P seeks summary judgment against D in the total sum of RMB162,200,000 (which includes the sum of RMB55,000,000 covered by the Master’s Order) and interest. It is P’s case that the two defences put forward by D, namely (a) estoppel, and (b) force majeure, are not arguable at all. As a result, P is entitled to have summary judgment against D.

22.  The principles concerning summary judgment applications have been succinctly summarized by Au-Yeung J in Venetian Coati v Bright & Bright[1], in which the learned judge said:

“16. The principles governing summary judgment application aretrite:

(a) The burden is on the defendant to show a bona fide defence or some other reason for a trial. This is normally done by affidavit and it is incumbent upon the defendant to “condescend upon particulars” in suchaffidavit;

(b) The mere assertion in an affidavit of a given situation by the defendant does not, ipso facto, ground leave todefend;

(c) Order 14 is only for clear cases, and ought not to be applied in cases where there are serious material factual disputes, or a difficult point of law not fit for summary determination, unless it is obvious that the defence put forward is “frivolous and practically moonshine”;and

(d) The Court should not embark on a mini trial on affidavits. Where there are factual disputes, the issue is not whether the defendant’s assertions are to be believed; it is whether those assertions arebelievable.

See On Loong Investment Company Ltd v IO of Wah Luen Industrial Centre, HCA 341/2014, unrep, 8 January 2016, at §20, per Au-Yeung J.

“17. The proper approach to the relevant test of whether the defendant has raised credible triable issues isalsowell-settled. Any alleged defence will not betaken at face value but, rather, have its inherent probability considered and tested against the evidence, including contemporaneous documents, and whether there has been inconsistency in defence, or whether the defence is raised only recently despite earlier opportunity to do so: Time Rich 08 Limited v DBE (HK) Limited & ors[2018] HKCA 404, at §5.2, per Cheung JA.”

23.  Further, it has to be borne in mind that where “the point at issue is at heart a short one the court will recognize the fact and act accordingly no matter how bulky its outer garments”.[2]

24.  D’s first defence is that P is estopped from suing D as Mr Yang Xiaodong (“Yang”) represented that he agreed to revoke and/or suspend the present proceedings. The estoppel as pleaded in §15(3) of the Defence is as follows:

“There were clear and unambiguous representations made by [Yang], the Deputy General Manager of Pou Chen Group, the parent structure of [P] between January to July 2022 during which he, acting on behalf of [P], agreed to revoke and/or suspend the current proceedings (i) during a Wechat conversation between [Yang] and [D] in January 2022. It was represented that a new repayment plan was to be formulated by [D] in replacement of the 3^rd Supplemental Agreement; (ii) in and around July 2022 by way of Wechat conversation, [Yang] represented that [P] would not ‘destroy’ [D] and that [P] would withhold the current proceedings …; (iii) [Yang] further represented that the remainder of the Consideration could be repaid later and there was no need for [P] to move forward with the current proceedings” (Emphasis added)

25.  There are various fundamental problems in the estoppel defence put forward by D. The estoppel defence is unarguable.

26.  First, as submitted by Mr Yu, it is trite that an estoppel can only be established if there is a clear and unequivocal promise that P would not enforce its rights. An agreement to “an informal standstill” is certainly not sufficient. In order to show an arguable estoppel defence, D has to demonstrate that P had arguably bound itself in law not to sue for the debt.[3] However, in the Defence, it has not been pleaded:

(1)  What are the material facts in support of the allegation that Yang was acting on behalf of P when making those alleged representations to D. Bearing in mind that P is a company limited and a separate legal entity, the mere fact that Yang is the Deputy General Manager of Pou Chen Group would clearly not be sufficient in support of the allegation that Yang has the authority to make representations which would be binding upon D.

(2)  What is the true meaning of the representations allegedly made by Yang to D. By reading §15(3) of the Defence as a whole, it seems that D is saying that Yang had told him, if he would repay the debt at a later time, P would withhold these proceedings. However, D did not mention how much more time Yang had given to him to repay the debt. It is not known, by now, whether the new deadline imposed by Yang has already passed.

27.  Second, I am of the view that D has failed to adduce sufficient evidence to show that arguably, Yang had made any clear and unequivocal representation on behalf of P to D.

(1)  The only documentary evidence in support of §15(3) of the Defence is (i) a transcript of the conversation between Yang and D through Wechat on 6 January 2022, and (ii) a transcript of the telephone conversation between Yang and D on 8 July 2022. The said transcripts are prepared by D. I note that, as to whether there are in fact such conversations between Yang and D, and whether the transcripts produced by D have accurately shown the conservations, P has reserved the rights to challenge all these if necessary. For the purpose of considering P’s application for summary judgment, I would proceed on the assumption that the said transcripts are accurate records of the conversations between Yang and D.

(2)  Having gone through the transcripts, I do not see any clear and unequivocal representation from Yang, which may arguably support the estoppel defence put forward by D. In those conversations, Yang had repeatedly said that he did not have the authority to make a decision on behalf of P. Yang in fact said “这个案子法务交给外部律师在处理了”, “这事我没有办法做主”, and “他们接受不接受我当然不敢讲”. D also acknowledged that Yang’s hands are tied. D said “我理解的你意思，你们有法务、有董事会”.

(3)  P has adduced evidence to show that Yang has been a Vice President of the Public Affairs Department of Pou Chen Corporation (“Pou Chen”), and Yang has never been P’s director or employee. While Pou Chen owns a majority shareholding in P’s immediate parent company, Yue Yuen Industrial (Holdings) Ltd (“Yue Yuen”), Yue Yuen is a substantial company (with an annual revenue of US$8.5 billion) listed on the Hong Kong Stock Exchange, with public shareholders and independent non-executive directors. It is unbelievable that D could genuinely believe that Yang had the authority to act on behalf of D to postpone or extinguish P’s claim of over RMB 162 million through some casual oral discussions.

(4)  Further, it is trite that an agent cannot authorise himself simply by representing to the third party that he has such authority.[4] D cannot rely upon anything said by Yang in the conversations as shown in the transcripts to say that Yang had the authority to represent P in saying so.

28.  Third, in order to establish an estoppel, it is necessary to show that D, relying upon the representations made by Yang on behalf of P, has acted to his own detriment. The only reliance identified by D is the provision of some personal loans to the Target Company. However, it is not in dispute that at the time of the alleged representations, D was the majority shareholder of the Target Company, owning 77.59% of the shares in the company. In accordance with common and commercial sense, as the majority shareholder, D would have given financial support to the Target Company, irrespective of the alleged representations.

29.  Fourth, Clause 19.1 of the Main Agreement provides that modification to the agreement requires written consent of the parties (“对本协议的任何修改，须经各方共同书面同意”). The law should and does give effect to contractual provisions requiring formalities to be observed for modifications of contract.[5] Without any written agreement between the parties, D’s repayment obligations under the Main Agreement and Supplemental Agreements cannot be varied.

30.  Fifth, even assuming D’s case on estoppel is accepted, the effect of the alleged estoppel is suspensory and does not extinguish P’s rights. P could resile from his promise on giving reasonable notice giving the promisee a reasonable opportunity of resuming his position. D must state his case with supporting materials as to what would have been reasonable notice[6]. D has not done so.

31.  D’s second defence is a force majeure defence, based upon Clause 14 of the Main Agreement, which is as follows:

“14.1 不可抗力事件是指本协议任何一方无法预见，不能避免且不能控制的事件（包括但不限于地震、台风、洪水、火灾、罢工、战争或暴动等）。

14.2 本协议任何一方因受不可抗力事件影响，不能充分、及时、适当地履行其在本协议项下的任何义务，该方可免于承担本协议规定的因履行义务不当而产生的违约责任。但是受到不可抗力事件影响的一方必须在不可抗力事件发生后或在通讯条件已经恢复后十（10）日内以传真及快递方式向本协议其他方提供关于不可抗力事件详情及其因受不可抗力事件影响不能或不能充分、及时、适当履行本协议项下义务的详细说明及相关证明文件。受到不可抗力事件影响的一方未能根据前述规定履行通知及提供证明文件义务的，不得主张根据本条款免于承担违约责任。

14.3 受到不可抗力事件影响的一方应当立即采取一切合理而可能的措施以消除或减轻不可抗力事件的影响，避免扩大损失，并在不可抗力事件的影响消除或减轻后恢复履行相关义务。受到不可抗力事件影响的一方未能履行前述义务时，应当对扩大的损失或不可抗力事件影响消除或减轻后未能恢复履行义务的行为承担相应的赔偿及违约责任。

14.4 不可抗力事件对本协议履行造成重大影响，使本协议无法履行的，各方应另行协商解决。” (Emphasis added)

32.  Force majeure clauses in general should receive a strict construction. Such a construction means that any ambiguity would be resolved against the party seeking to rely on the clause.[7]

33.  The force majeure defence put forward by D is that the global pandemic (“the Pandemic”) and civil war in Ethiopia (“the Civil War”) have seriously adversely affected the Target Company’s ability to make payment. As a result of these force majeure events on the Target Company, performance of D’s payment obligations has become impossible. By the operation of Clause 14 of the Main Agreement, D should not be held liable in respect of the failure to perform those payment obligations.

34.  With respect, I am of the view that the force majeure defence is fundamentally flawed and is completely unarguable.

35.  First, the one who has to perform the payment obligations under the Main Agreement and the Supplemental Agreements is D, not the Target Company. The Pandemic and the Civil War may have an adverse impact on the Target Company, but these events certainly cannot constitute the force majeure events as stipulated in Clause 14 of the Main Agreement. When D decided to purchase P’s shares in the Target Company, D was certainly of the view that the Target Company would be a profitable company. Purchasing P’s shares in the Target Company is a commercial decision made by D. The decision would be a wise decision if the Target Company is really making profits, as expected by D. However, the decision would be an unwise one, if D’s prediction is wrong and the business of the Target Company is not good. There are inherent risks in making commercial decisions. The fact that D’s prediction is wrong and D has made an unwise commercial decision cannot be force majeure events. With respect, D’s argument is that he would only be required to perform the payment obligations if the Target Company is profitable. This is absurd and must be rejected.

36.  Mr Yu has helpfully referred me to a case on the point, ie Tandrin Aviation v Aero Toy Store[8]. In that case, Hamblen J said:

“[It] is well established under English law that a change in economic / market circumstances, affecting the profitability of a contract or the ease with which the parties’ obligations can be performed, is not regarded as being a force majeure event. Thus a failure of performance due to the provision of insufficient financial resources has been held not to amount to force majeure… and likewise a rise in cost or expense.”

37.  Mr Wong submitted that the force majeure defence is supported by Clause 5.3.5 of the Main Agreement. In that clause, D has agreed to exempt P, its representatives appointed as directors and senior members in the Target Company, from third party liability when co-operating with D to obtain funding from the bank. Mr Wong said that this clause has clearly shown that P knew that D had to rely upon the Target Company to obtain funding to complete the transaction as stated in the Main Agreement. With respect, there is nothing in Clause 5.3.5, or in any other clause of the Main Agreement, showing that D would have to pay P only if the Target Company is doing well and is profitable.

38.  Second, D has adduced no evidence to show that as a result of the adverse impact of the Pandemic and the Civil War on the Target Company, it is impossible (不能) for D to perform the payment obligations as stipulated in the Main Agreement and the Supplemental Agreements. If those events have caused some inconvenience (不便) or difficulties (困難/不容易) to D, that would not be sufficient. In order to trigger Clause 14 of the Main Agreement, D has to show that those events (which cannot be changed in economic or market circumstances, see [36] above) have caused impossibility for him to make payments. Having considered D’s evidence, D is in fact saying that he has sufficient assets to perform the payment obligations, but due to the Pandemic, it would be difficult for him to liquidate his assets. As said, merely showing difficulties or inconvenience would not be sufficient. What D has to show is impossibility. In my view, D has failed to adduce believable evidence (with sufficient particulars), showing that the force majeure events alleged by him, have made it impossible for him to perform the payment obligations. In the absence of believable evidence on this causation point, the force majeure defence cannot be arguable.

39.  Third, there is no evidence showing that D has provided the written notice and the evidence of the force majeure event to P within 10 days after the occurrence of the force majeure event in accordance with Clause 14.2. That being the case, D is not entitled to rely upon Clause 14 of the Main Agreement in any event.

40.  Mr Wong relied upon §15 of D’s 2^nd Affirmation and said that the requirement in Clause 14.2 had been complied with. In that paragraph, D2 said:

“...... I have informed [P] the details of the force majeure events pursuant to Clause 14.2 of the Main Agreement and continued to update the latest status of such force majeure events to [P].”

With respect, this paragraph cannot arguably support the proposition that D has compiled with the requirement as to notice and the evidence in Clause 14.2. D did not say that he had given any written notice to P, informing P the occurrence of any force majeure event. Further, D has not mentioned the particulars of the evidence concerning the force majeure event (if any) given by him to P.

41.  Fourth, the force majeure defence put forward by D has been clearly contradicted by the fact that the purpose of having the 3^rd Supplemental Agreement is to take care of the impact of the pandemic and the Civil War on the transaction between the parties. As recorded in the Recital of the 3^rd Supplemental Agreement:

“经本补充协议各方共同协商，受新型冠状病毒疫情及埃塞俄比亚内战影响，为主协议之股份交易目的继续实现，各方经就标的公司剩余部分之股份交易价款（即人民币167,200,000元…）支付事宜的友好协商，现共同订立本补充协议，并遵守和履行之” (Emphasis added)

42.  It is clear that the parties had taken the Pandemic and the Civil War into account when they entered into the 3^rd Supplemental Agreement. That being the case, the Pandemic and the Civil War could not be said as unforeseeable events (无法预见) at the time of the 3^rd Supplemental Agreement. D would not be entitled to rely upon the same to trigger Clause 14 of the Main Agreement.

43.  Fifth, the alleged force majeure events have already ceased. As a result, D can no longer rely upon the same to say that his payment obligations are still being suspended.

(1)  P has adduced evidence to show that the Civil War ceased on 2 November 2022, when the Ethiopian government and regional forces agreed to a permanent cessation. The state of emergency proclaimed by the Ethiopian government as a result of the COVID pandemic in Ethiopia expired in September 2020. There is no evidence from D showing the contrary.

(2)  Further, it is common knowledge that Mainland China relaxed precautionary measures for the Pandemic in late 2022.

(3)  Even on D’s case, the Ethiopian factories resumed production in July 2022, before the cessation of the Civil War. The only alleged losses and adverse impact caused by these events are alleged to have lasted up to March 2022.

44.  While the alleged force majeure events have ceased, there is no reason why D is still not required to perform his payment obligations under the Main Agreement and the Supplemental Agreements.

45.  In my judgment, the defences put forward by D, ie both the estoppel defence and the force majeure defence, are unarguable. There is no triable issue in this case. Accordingly, P’s application for summary judgment must be allowed.

D’s Appeal

46.  It is trite that an appeal from a master’s decision to a judge in chambers is a de novo hearing. Subject to the restriction in Order 58 rule 1(5), the hearing before me is an actual rehearing as if the application came before me for the first time.[9]

47.  I have allowed P to have summary judgment on the entire sum of RMB162,200,000, which includes the sum of RMB55,000,000 covered by the Master’s Order. For this reason alone, I would dismiss D’s appeal. Nevertheless, in deference to counsel’s submissions, I would discuss the points made by counsel in D’s Appeal briefly.

48.  Mr Yu submitted that the Master’s Order is based upon the admissions made by D. The admissions have never been withdrawn by D. In the circumstances, it is clearly correct for the Master to rule against D in respect of the RMB55,000,000.

(1)  As shown in the Original AS filed by D’s solicitors Messrs. Grandall Zimmern Law Firm (“GZLF”) on 11 August 2022, D did not dispute and would admit P’s claim as set out in the Writ.

(2)  GZLF filed D’s notarised Form 16 on 2 September 2022, by which D admitted the sum of RMB 59,172,192 and requested to pay the same in instalments.

(3)  In D’s 1^st Affirmation filed on 2 September 2022, D admitted that the facts stated in the Statement of Claim were accurate (申索陈述书详列的案情准确) and that he owed P the sum of RMB 55,000,000 and interest. In that affirmation, D said:

“3.8 申索陈述书所牵涉的为第三份补充协议内的首三期价款，减去我至今已经部份支付的款项，得出我共欠原告人第一期、第二期、第三期价款为55,000,000 元人民币，另加相关款项的利息（「该首三期欠款」）。

3.9 针对原告人就该首三期欠款作出的追讨及其就本人部份还款的计算，我不拟提出抗辩，亦对原告人就该首三期欠款取得判决没有异议。但我请求法庭给予时间使我按以下详述的分期还款方案的时间及数额还款，并搁置执行判决，以待我还款。我承诺在2023 年9 月30 日还清该首三期欠款。”(Emphasis added)

(4)  In GZLF’s letter to the court dated 9 September 2022, GZLF stated that “our client’s position remains that he does not intend to dispute the principal amount of the claim of RMB 55,000,000, to which our client is willing and ready to repay based on a constructive payment proposal”, but would “defend” the remainder of the claim.

(5)  Same admission has also been made in D’s Call-over Skeleton.

49.  Mr Wong focused on the Form 16. Mr Wong submitted that the Form 16 is a settlement offer made by D. As a result of the rejection of the offer by P by lodging the Form 16B, and the lodging of the 2^nd AS, a formal application for withdrawal of the Form 16 admission is no longer necessary.

50.  As submitted by Mr Yu, I am of the view that Mr Wong’s submissions concerning the Form 16 admission are incorrect.

(1)  As stated in Order 13A rule 2(3), the court may allow a party to “amend or withdraw” an admission made under Order 13A.

(2)  An admission made in Form 16 is not a mere offer for settlement, which can be withdrawn without leave from the court at any time.

(a)  Making a Form 16 admission is a serious matter. In the Form 16 filed by D, it is stated “如你已作出承认，你仅会在法庭认为容许你修订或撤回你的承认属公正的情况下，获容许修订或撤回你的承认”.

(b)  Where a defendant makes a part admission and requests for time to pay under Order 13A, rules 5 and 9, but the plaintiff only refuses the defendant’s proposal for payment, the Court “shall enter judgment for the amount admitted… to be paid by the date or at the times and rate of payment determined by the Court.”[10]

(c)  If the plaintiff “does not accept the amount admitted by the defendant and wishes the proceedings to continue”[11], it remains entitled to apply for judgment – the general rule remains that where a defendant makes an admission as mentioned in Order 13A, rule 2(1), “the plaintiff may enter judgment.”[12]

(d)  Nothing in Order 13A grants automatic leave to withdraw an admission upon a plaintiff’s rejection of a Form 16 proposal.

(e)  The amendment of the Original Writ does not negate the need for leave to withdraw D’s admissions. D has not pointed to anything in the rules to suggest that the filing of a fresh acknowledgment of service constitutes automatic leave to withdraw a Form 16 admission.

51.  Apart from the Form 16 admission, as said in the above, there are other admissions made by D in relation to the RMB 55,000,000. For the sake of discussion, even if P cannot rely upon the Form 16 admission for any reason, the Master’s Order can still be upheld on the basis of the other admissions made by D.

52.  There is no merit in D’s Appeal. The appeal must be dismissed.

Costs

53.  Costs should follow the event. Since P has obtained summary judgment against D and has entirely succeeded in these proceedings, P is entitled to have all costs of these proceedings, including costs of D’s Appeal, costs of P’s Summons and all costs reserved.

54.  Mr Yu did not seek a certificate for two counsel. However, Mr Yu submitted that costs should be awarded to P on indemnity basis by reason of Clause 10.1.1 of the Main Agreement. Clause 10.1.1 is as follows:

“[D] 未能履行或未能完善履行、遵守本协议下的义务、声明和承诺，具该等违约造成了 [P] 的损害的，对于违约方违约行为所引起的，或与违约方违约行为有关的任何 [P] 的损失、成本和费用，[D] 应足额赔偿 ……”

55.  I agree with Mr Yu. Costs incurred by P in these proceedings are “成本和費用” caused by the breach of contract committed by D (ie failure to perform the payment obligations). In accordance with Clause 10.1.1 of the Main Agreement, D is required to pay those costs to P on an indemnity basis. Those costs would be summarily assessed by the court.

Conclusion

56.  For the reasons above, I made the decision as set out in [1] above.

57.  I thank all counsel for the very helpful assistance rendered to the court.