India related commercial contracts: dispute resolution and governing law clauses

We are delighted to share with you the sixth edition of our well-regarded Guide on Dispute Resolution and Governing Law Clauses in India-related Commercial Contracts.


The Guide is intended to assist in-house counsel who handle India-related commercial contracts on behalf of non-Indian companies and who need to have a practical understanding of the nuances of drafting dispute resolution and governing law clauses in the Indian context.

The full digital edition can be downloaded in PDF by clicking on this link.

Leave a Comment

Filed under Announcements, Miscellaneous

Foreign companies in Hong Kong: You can’t have your cake and eat it too


In the recent decision of Shandong Chenming Paper Holdings v Arjowiggins HKK 2 Ltd, the High Court of Hong Kong has provided further guidance on the winding up of foreign companies in Hong Kong.


Shandong Chenming Paper Holding (the “Company“) is a paper conglomerate incorporated in the People’s Republic of CHina with a dual listing in Shenzhen and Hong Kong. The Company and Arjowiggins HKK2 Ltd (“Arjo“) entered into a joint venture partnership in 2005 for the purpose of manufacturing paper products. Disputes subsequently arose and an arbitration proceeding was commenced in November 2015, resulting in an award of RMB 167,860,000 damages in favour of Arjo.

On 7 December 2015, Arjo obtained leave from the Honourable Madam Justice Mimmie Chan to enforce the arbitral award.

Since the Company did not appeal to the ruling and yet refused to pay (there was no suggestion that the Company did not have the funds to satisfy the arbitral award), Arjo served a statutory demand for the payment totalling approximately RMB 302 million, which includes the contractual damages, legal and tribunal fees plus interest. In response, the Company sought to restrain Arjo from submitting a winding-up petition, arguing that Hong Kong Court lacked the jurisdiction to wind-up the Company.

The Decision

The Court’s jurisdiction to wind up foreign companies under section 327 of the Companies (Winding-up and Miscellaneous Provisions) Ordinance (Cap 32) is well known. As this power is discretionary, the Court has developed ‘self-imposed constraints’ to justify the exercise of its discretion (the three core requirements), including that:

  1. there had to be a sufficient connection with Hong Kong, but this did not necessarily have to consist in the presence of assets within the jurisdiction;
  2. there must be a reasonable possibility that the winding-up order would benefit those apply for it; and
  3. the court must be able to exercise jurisdiction over one or more persons in the distribution of the company’s assets.

The Company, while accepting that the first and third of the above requirements were satisfied, argued that the second requirement (that Arjo would derive sufficient benefits from a winding-up order) was not satisfied.

In this regard, the Company argued that it had no assets in or businesses conducted from Hong Kong and the sole connection with Hong Kong was its listing on the HKEX. This follows that a liquidator appointed in Hong Kong will be able to achieve nothing, and that a winding-up order would be ‘an exercise in futility’.

Arjo contended the share listing status as a ‘valuable and realisable’ asset in Hong Kong. In addition, Arjo argued that a restructuring of the Company and its assets during the arbitration process was a matter which ought to be investigated by a liquidator.

While the Honourable Mr Justice Harris found that the value of the Company’s listing status in Hong Kong was, viewed realistically, not capable of providing a material benefit to Arjo or other creditors, he held that the availability of the restructured assets to a liquidator was material to the second requirement.

In addition, Mr Justice Harris held that a winding up order would exert considerable pressure on the Company’s management to satisfy its debts to Arjo and this would indirectly constitute a ‘benefit’ to Arjo capable of satisfying the second requirement.  However, notwithstanding this finding, Mr Justice Harris held that there was an additional matter which justified the “moderation” of the requirement that benefit to Arjo be shown.

Mr Justice Harris found that the Company, while having a primary listing in Hong Kong, had simply refused to pay the arbitral award (which had become enforceable as an order of the Court).  He found that there was a strong public interest to disabuse foreign companies of the idea that they can take the benefit of access to Hong Kong’s financial system without the burden of complying with the law. The refusal to honour the arbitration award and the listing in Hong Kong showed contempt for the integrity of Hong Kong’s legal system.


The judgment of the Court in this matter confirms that while the “three core requirements” remain critical to the exercise of the Court’s discretion, the application of those requirements can be moderated if the circumstances clearly call for it.  In this case, it was clear that Company was trying to take the benefit of Hong Kong’s financial system while at the same time, trying to disregard the integrity of its legal system, and Mr Justice Harris, in dismissing the matter, held that it was necessary to “disabuse other mainland companies of the idea” that they can have their cake and eat it too.

Gareth Thomas
Gareth Thomas
Partner, Head of commercial litigation Hong Kong
Email | Profile
+852 2101 4025
Jeremy Haywood
Jeremy Haywood
+852 2101 4120

Leave a Comment

Filed under Hong Kong, Insolvency

Apology legislation passed in Hong Kong – what does it mean for you?

On 13 July, Hong Kong’s Legislative Council passed a law (the Apology Law) intended to facilitate the resolution of civil disputes in the territory. The Apology Law, which is expected to be gazetted and come into force shortly, reforms the legal consequences of making any sort of apology (written, oral or by conduct). An apology will not constitute an admission of fault or liability (even if it includes such an admission), nor may it be admissible in evidence to the detriment of the apology maker. This is the case unless the maker of the apology wishes it to be admitted or it falls to be admitted in the usual way through discovery, oral evidence or an equivalent tribunal process.

Hong Kong is the first jurisdiction in Asia to enact apology legislation and its Apology Law is the broadest enacted to date worldwide. The driver behind it is that apologies may in some circumstances ‘unlock’ disputes and lead to settlement without recourse to formal legal action. Since parties (and their lawyers and insurers) may be reluctant to do anything that may be construed as an admission of liability, apologies have to date been sparse. The Apology Law seeks to incentivise disputing parties to make apologies, whether in the direct aftermath of an accident or dispute, or further down the line, should the dispute escalate.

The law has far-reaching consequences for anyone involved in contentious civil disputes, whether before the courts or tribunals in Hong Kong. The Apology Law has the scope substantially to change the way insurance, evidence and settlement are approached in civil proceedings and regulatory and disciplinary matters. The scope for ‘tactical’ apologies by counterparties should be borne in mind as set out below.

Continue reading

Leave a Comment

Filed under ADR, Announcements, Hong Kong

Former Chief Secretary and property tycoon lose appeal in Hong Kong’s highest profile corruption case

The convictions of former Chief Secretary of Hong Kong, Rafael Hui, former Sun Hung Kai chairman, Thomas Kwok, and two others have been upheld by Hong Kong's Court of Final Appeal. The appellants have resumed serving their sentences for conspiracy to commit misconduct in public office.

In a case that has occupied the legal, political and business community, the judgment provides important clarification on the scope of the common law offence, in particular what is required for conspiracy to commit misconduct in public office. The judgment confirms the well-established principle that benefits offered to develop or retain goodwill may fall foul of Hong Kong’s bribery laws.

Continue reading

Leave a Comment

Filed under Hong Kong

Hong Kong allows third party funding for arbitration and mediation

Hong Kong's Legislative Council has passed a law allowing third parties to fund arbitrations seated in the territory, as well as work done in Hong Kong for arbitrations seated elsewhere, and for mediations. This development has been long anticipated, and will be widely welcomed by Hong Kong's thriving arbitration community, which views it as essential to Hong Kong maintaining its status as one of the world's most popular arbitral seats.

The new law, in the form of amendments to the Arbitration Ordinance (Cap. 609), abolishes the doctrines of champerty and maintenance for arbitration, clearing the way for parties with no legitimate interest in the proceedings to fund them, in return for a share in any award or settlement. Third parties can include lawyers and law firms, although not if they act for any party to the proceedings. Similar amendments are made to the Mediation Ordinance (Cap. 620).

The amendments are expected to take effect later this year, to allow time for development of an appropriate funder code of conduct.

Continue reading

Leave a Comment

Filed under ADR, Arbitration, Funding, Hong Kong

Global Pound Conference Hong Kong  – a mandate for change

Hong Kong's status as a leading international dispute resolution hub is well-known. It enjoys a strong, independent judiciary as well as world class international arbitration services. Mediation and other forms of ADR are heavily supported by a myriad of institutions. Although not a compulsory requirement, mediation in the context of civil litigation tends to be interpreted by commercial parties as a mandatory step. Against this backdrop, delegates voted at the recent Global Pound Conference Hong Kong, which saw over 200 delegates from across Hong Kong's disputes market congregate to discuss their approach to commercial dispute resolution. Hong Kong's Secretary for Justice, Chief Justice and Solicitor General headlined the conference.

Click here for our ebulletin on the Hong Kong results, and here for an article on technology in dispute resolution, featuring partner May Tai.

Click here to download our synopsis and infographics on the Hong Kong data as featured on our ADR hub.

Click here to download the aggregated results from the first 18 Global Pound Conference events, which have taken place in 12 countries in Africa, the Americas, Asia, Europe and the Middle East. This includes the very first analysis of the overall trends set to shape the future of dispute resolution globally.

The above provide insights for all stakeholders  – commercial parties, lawyers, experts, judges, arbitrators, mediators and government – on the areas of focus for Hong Kong as it seeks to maintain  – and expand – its position as a leading dispute resolution centre.


Leave a Comment

Filed under ADR

“Dishonesty at its highest level and gravity” – when solicitors commit offences against client estates

This blog post will consider a number of recent cases in England where solicitors have been convicted of offences or struck off the register for misappropriating client funds from deceased estates. These shed light on the surprising levels of abuse uncovered by the Courts and the English Solicitors Regulation Authority (the “SRA”), and the zero tolerance approach taken to solicitors who seek to personally benefit from the trust placed in them by their clients.

A number of common themes run through the cases, namely that offenders have often sought to explain and justify their actions through desperation, ill health and financial hardship. Further, the solicitors in question generally practised in local firms or as sole practitioners, where clients place a high degree of trust in them due to their geographical proximity and personal familiarity. Finally, the offences appear to have taken place over a number of years, with initial abuse turning into a pattern of offending.

During its investigations the SRA asserted that it is only in exceptional circumstances that a solicitor found to have acted dishonestly will avoid being struck off the register. Explanations and mitigating circumstances advanced in the cases below were not sufficient to overcome the serious breaches committed and the need to uphold public confidence in the legal profession.

Continue reading

Leave a Comment

Filed under Private wealth and trusts

Wikileaked? Singapore Court upholds privilege over hacked documents

In the recent decision of Wee Shuo Woon v HT S.R.L [2017] SGCA 23, the Court of Appeal considered whether evidence which had been made available on WikiLeaks as a result of the Respondent's ("HT S.R.L."') computer systems being hacked had lost its confidential and legally privileged status. 

The decision, which has taken on added significance in the wake of recent global cyber-attacks, indicates that the Singapore courts will be slow to admit evidence obtained as a result of such incidents.  In particular, the Court held that the equity in favour of restraining the use of privileged documents was even stronger in the case of documents obtained in a cyber-attack than in the case of those obtained by virtue of a party's innocent mistake.  The order to exclude such evidence was upheld.

Continue reading

Leave a Comment

Filed under ADR, Data protection

Singapore Court of Appeal confirms the validity of “unilateral option to arbitrate” clauses

In the recent decision of Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte Ltd [2017] SGCA 32, the Singapore Court of Appeal confirmed that the Singapore courts will enforce a dispute resolution clause which gives only one party the option to arbitrate.  The court also clarified the requirements and threshold for a stay of proceedings to be granted under section 6 of the Singapore International Arbitration Act ("IAA").

Continue reading

Leave a Comment

Filed under South East Asia

SFC and HKMA continue to prioritise AML/CFT compliance with six new disciplinary actions

Since early March 2017, the Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) have collectively taken disciplinary actions against five regulated entities and an individual relating to breaches of anti-money laundering (AML) and counter financing of terrorism (CFT) regulatory requirements. The entities were fined amounts ranging from HK$2.6 million to HK$7 million, whereas the individual was banned from re-entering the industry for nine months.

Both the SFC and the HKMA have made it clear that AML and CFT compliance will continue to be a priority in 2017, and the recent disciplinary actions demonstrate swift action on their part. The SFC has set up a temporary specialised team within its Enforcement Division to tackle know-your-client and AML/CFT control failings. The raft of disciplinary actions serves as a warning that the SFC and the HKMA are prepared to impose tough sanctions and that regulated entities should take action now to ensure compliance with the relevant requirements.

Please click here to view our full briefing.

William Hallatt
William Hallatt
Partner, Financial Services Regulatory
Email | Profile
+852 2101 4036
Hannah Cassidy
Hannah Cassidy
Registered foreign lawyer (England and Wales), Hong Kong
+852 2101 4133

Leave a Comment

Filed under Enforcement, Financial Services Regulation, Hong Kong