CFA Confirms Relief in Aid of Overseas Proceedings

In an important judgment in Compania Sud Americana De Vapores S.A. v Hin-Pro Logistics International Ltd [2016] HKEC 2463, FACV 1/2016 (to be reported), the CFA has confirmed that the grant of interim relief by a Hong Kong court to assist with the enforcement of an unimpeachable foreign judgment in Hong Kong does not breach judicial comity.

In so doing, the CFA allowed the plaintiff’s appeal against a judgment of the Court of Appeal. In the CFA’s opinion the Court of Appeal had mistakenly treated the plaintiff’s application for interim relief as being equivalent to an application to enforce an anti-suit injunction (granted by the English courts) against the defendant in Hong Kong, with respect to court proceedings commenced in Mainland China in breach of an English exclusive jurisdiction clause. The Court of Appeal appears to have mistakenly considered that the plaintiff’s application required the Hong Kong courts to show a preference between the English and Mainland courts and, therefore, it (in effect) declined to get involved on the basis that to do so would involve a breach of comity.

However, as events transpired, what the foreign plaintiff was actually seeking to do was to enforce an English judgment for damages against the defendant in Hong Kong (arising out of a claim for breach of the jurisdiction clause) by obtaining Mareva injunction relief, pursuant to s. 21M of the High Court Ordinance (Cap. 4)*.

The CFA’s judgment is of significant practical value in demonstrating (among other things):

  • the general principles that underpin the grant of interim (and, in particular, Mareva) relief pursuant to s. 21M of the Ordinance and the exercise of the court’s discretion with respect to this ancillary jurisdiction; and
  • that concerns about judicial comity are, in principle, no reason to deny a judgment of a foreign court, that is otherwise unobjectionable, protection by way of interim relief pursuant to s. 21M of the High Court Ordinance (Cap.4).

The CFA’s judgment is also important in the development of the Hong Kong courts’ ancillary jurisdiction pursuant to s. 21M of the Ordinance. That jurisdiction has existed since April 2009 (as part of the civil justice reforms in Hong Kong). The CFA’s judgment is, of course, declaratory.

Lawyers in Hong Kong involved in the business of “cross-border” disputes (particularly, as between common law jurisdictions) should take note. The CFA’s judgment enhances the attraction of Hong Kong as a forum for cross-border disputes.

* “Interim relief in the absence of substantive proceedings” (colloquially known as “Injunctions in aid of overseas court proceedings”).