Posts Tagged Chinachem v Century Venture
Chinachem: Forum non conveniens, non-exclusive choice of court and concurrent proceedings in Hong Kong and Mainland China.
I reported earlier on the waiver of privilege issues in Chinachem. The Hong Kong High Court has now also ruled on the issue of application of forum non conveniens in the event of concurrent proceedings in Hong Kong and mainland China. In a lengthy judgment (particularly resulting from extensive summary of counsel arguments but also of relevant precedent), Ng J recalls English precedent on forum non conveniens (Spiliada evidently being featured) and the way in which said precedent has been applied in Hong Kong. (Carrie Tai has excellent overview here).
Contract between the parties included choice of court and choice of law as follows: ‘This Agreement shall be governed by the laws of Hong Kong and it shall be construed by the laws of Hong Kong. Both parties agree to submit to the non-exclusive jurisdiction of the courts of Hong Kong.’
Ng J in the end rejects all arguments suggesting a stay in favour of the mainland proceedings. In doing so, she confirmed the tendency of Hong Kong courts (like indeed their English common law counterparts) to only brush aside choice of court in exceptional circumstance. Even if that choice of court is, such as here, non-exclusive. The concurrent proceedings stand.
It must be those late nights spent marking exam papers. (Thank goodness there is the World Cup to take the edge off that exercise this year). Either that or generally the twisted mind of a conflicts lawyer. I can see one or two conflicts issues in Chinachem which the Hong Kong High Court did not pick up on: probably because parties did not raise them and /or because the dispute was not ‘international’. In which case, let’s call this blog posting Fantasy Conflicts.
In Chinachem Financial Services v Century Ventures Holdings Ltd, the Hong Kong High Court held on the issue of implied waiver of privilege. Gareth Thomas and Dominic Geiser have a summary of the case here, including a review of its implications in Hong Kong dispute resolution. It is the discussion on waiver of privilege which is of interest to this blog. Both parties to the dispute are PRC (Mainland) based. They entered into an agreement whereby defendant would assist with the appeals stage of a dispute between plaintiff and third party. After a short while, disagreement ensued on the scope of the advice and plaintiff took legal advice from a Hong Kong based law firm but with international roots. This legal advice was later handed over to defendant by Plaintiff’s former CEO, in an alleged breach of his fiduciary duties. Did the hand-over and alleged partial use of the advice in the proceedings amount to waiver of privilege?
Ramanathan SC (at 130 ff) reviewed US, Australian, and English precedent (in particular Paragon v Freshfields and subsequent case-law) and in the end opted for the English approach. In doing so he presumably applied lex fori to the waiver issue, it being procedural? (And without consideration of the intervening nature of the lex causae of the contract between the law firm and plaintiff, or third party effect thereof. Lex contractus of this contract may well have been English given the roots of the firm involved. Lex contractus for the agreement between the parties presumably was ‘Chinese’ or ‘Mainland Chinese’). In this case, the open-minded comparative law approach is commendable (and of particular note, the fact that the judge opted for the English approach citing inter alia human rights impact and related relevance to Hong Kong (at 135)).
Finally, the Hong Kong proceedings were started 7 March 2013. Proceedings by defendant on the mainland, seeking essentially the reverse of plaintiff’s action in Hong Kong, had been initiated ‘early 2013’ (at 21). Yet any form of lis alibi pendens does not seem to have been entertained – presumably because mainland China generally has no structured approach to lis alibi pendens and Hong Kong is not willing to employ one unilaterally.
Fantasy over. Back to marking exams. Geert.