The Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (HKSAR) was recently signed by the Supreme People's Court and the HKSAR government. This is the sixth arrangement with the mainland on mutual legal assistance in civil and commercial matters and the third arrangement providing for recognition and enforcement of judgments in civil and commercial matters.
The Hong Kong government recently issued a consultation paper, and sought views from members of the public and interested stakeholders, on a proposed arrangement between Hong Kong and the mainland for the reciprocal recognition and enforcement of judgments in civil and commercial matters. The proposed arrangement seeks to provide a mechanism which widens the existing and limited scope for the enforcement of mainland court civil judgments in Hong Kong and vice versa.
In certain circumstances the courts in Hong Kong can extend Mareva relief against a defendant to third parties under the so-called 'Chabra' jurisdiction. In a recent case, the assets which the trustees sought to locate were not directly held by the bankrupt, but appear to have been indirectly held through a family trust and related companies. As before, the court demonstrated its willingness to extend Mareva relief under the Chabra jurisdiction in deserving cases.
Integrated bank accounts are very common in financial hubs such as Hong Kong. In addition to sub-accounts categorised by different currencies, an integrated account may also have sub-accounts with other features (eg, credit cards, investments and insurance). A recent case shed light on the approach of the courts to such accounts in the context of enforcement proceedings and rival claims by different judgment creditors.
The Hong Kong Legislative Council recently passed the Apology Bill with the aim of removing certain legal disincentives for parties to convey an apology in the context of civil disputes. In the footsteps of many overseas jurisdictions which have already adopted apology legislation, Hong Kong is the first Asian jurisdiction to enact this type of legislation, which generally precludes an apology from being taken into account in the determination of fault and liability.
Injunctive relief to freeze a defendant's assets (ie, a Mareva injunction) can extend to third parties under the so-called 'Chabra' jurisdiction where there is good reason to suppose that the assets held by the third parties are in fact assets belonging to the defendant. This jurisdiction is described as exceptional. However, as a recent case demonstrates, while the courts are careful in exercising their jurisdiction in this regard, they will do so in deserving cases.
The Court of Appeal has recently dismissed a plaintiff shipowner's appeal against a judge's refusal to grant an anti-suit injunction to restrain the holder of a bill of lading from continuing with court proceedings in mainland China in breach of a Hong Kong arbitration clause. The first-instance judge had held that the plaintiff's delay in applying for an anti-suit injunction was of itself a standalone justification to refuse the injunction.
The Court of Final Appeal has brought an 11-year dispute between the founders of the first Itamae Sushi chain restaurant in Hong Kong to an end, dismissing the appellant's appeal by way of a majority judgment. The judgment confirms that the duty of a director is to act in the best interests of a company, which encompasses the 'no-conflict' rule.
The ownership dispute between the founders of the Itamae Sushi chain restaurant has been ongoing for a decade. Recently, the Court of Final Appeal granted permission to appeal so that the dispute can finally be resolved. The case highlights the importance of clear contractual drafting and obtaining written confirmations of oral representations, as well as demonstrating that the scope of a director's fiduciary duties is often difficult to define.
A recent case addressed the approach that the court should take in deciding whether to invoke its jurisdiction to approve an arrangement or compromise between a foreign company and its creditors or members. The decision can be seen as confirming that the Hong Kong courts are ready to apply a lower threshold in exercising their discretion in this respect.
Recent cases highlight the need to exercise care when applying for a Mareva injunction before trial. Mareva injunctions come with a heavy responsibility on the part of the plaintiff in terms of the application, the grant and enforcement. By being transparent with the court at the outset, a plaintiff reduces the risk of the defendant successfully applying to discharge the Mareva injunction.