In the recent case of Prema Birkdale Horticulture (Macau) Ltd v Venetian Orient Ltd & Anor [2009] HKCU 1163, the Court of First Instance confirmed that it has jurisdiction to grant interim relief in relation to proceedings which have been or are to be commenced in a place outside Hong Kong under section 21M of the High Court Ordinance.

Background of the Case  

The Plaintiff, Prema Birkdale Horticulture (Macau) Ltd (the “Trade Contractor”), had entered into a trade contract with the 1^st Defendant, Venetian Orient Limited (the “Owner”), to provide specialist landscaping and horticultural services for a resort-casino in Macau (the “Trade Contract”).  Pursuant to the terms of the Trade Contract, the performance of the Trade Contract was governed by the laws of Macau and any dispute arising thereunder was to be determined by Macanese Arbitration proceedings.  

Whilst the Owner paid the Trade Contractor a sum of MOP33 million being the advance payment of sums due under the Trade Contract, the 2^nd Defendant, Export Finance and Insurance Corporation (the “Credit Agency”), issued an Advance Payment Bond (the “Bond”) in favour of the Owner to repay such sum of the said advance payment as demanded by the Owner.  Upon making payment to the Owner under the Bond, the Credit Agency was entitled to claim payment of the sums already paid out to the Owner from the directors of the Trade Contractor pursuant to the terms of a Deed of Guarantee and Indemnity (the “Deed”).  

The crux of the dispute concerned the alleged failure of the Owner to issue interim certificates in respect of work done by the Trade Contractor under the Trade Contract, which if so issued shall reduce the amount of the Bond and thereby reducing the potential liability of the directors of the Trade Contractor under the Deed. Since the Owner had made a demand under the Bond which the Trade Contractor asserted was wrongful, the Trade Contractor took out the present application seeking various interim reliefs on the basis that, as Macau and Hong Kong are parties to the New York Convention, any arbitration award to be obtained by the Trade Contractor in Macau could be registered and enforced in Hong Kong, and thus the Court has jurisdiction to grant the interim reliefs sought pursuant to section 2GC(1A) of the Arbitration Ordinance (“AO”) (Cap. 341).  

Jurisdiction of the Court of First Instance  

Prior to the amendments contained in the Civil Justice (Miscellaneous Amendments) Ordinance 2008, the rule established in the English case of Siskina [1979] AC 210 (which was followed in the Hong Kong case of Mercedes Benz A.G. v Leiduck [1996] 1 AC 284) would have prevented a plaintiff from taking out an application seeking interim relief in the absence of substantive proceedings in Hong Kong.  In order to qualify for interim relief, the plaintiff had to satisfy the Court that it had a good cause of action over which the Court would have jurisdiction.  

Under the new section 21M of the High Court Ordinance (“HCO”) (Cap. 4), the Court of First Instance (the “Court”) may appoint a receiver or grant interim relief in relation to proceedings which (1) have been or are to be commenced in a place outside Hong Kong; and (2) are capable of giving rise to a judgment which may be enforced in Hong Kong under any Ordinance or common law.  The law does not require the plaintiff to show that the subject matter of those proceedings would, apart from this section, give rise to a cause of action over which the Court would have jurisdiction, nor does it require the plaintiff to show that the interim relief sought is ancillary or incidental to any proceedings in Hong Kong.  That being said, the Court may refuse an application for appointment of a receiver or interim relief if, in the opinion of the Court, the fact the Court has no jurisdiction, apart from this section, in relation to the subject matter of the proceedings concerned makes it unjust or inconvenient for the Court to grant the application (s 21M(4) HCO).  

Likewise, under section 2GC(1A) of the AO, the Court or a judge of the Court may also grant interim injunction or other interim relief in relation to arbitration proceedings that have been or are to be commenced in a place outside Hong Kong, provided that the arbitration proceedings are capable of giving rise to an arbitral award which may be enforced in Hong Kong under this Ordinance or any other Ordinance.  However, the Court may decline to make an order under this section on the ground that (1) the matter is currently the subject of arbitration proceedings; and (2) the Court or the judge considers it more appropriate for the matter to be dealt with by the relevant arbitral tribunal (s2GC(6) AO).

The Decision

In his decision, Deputy High Court Judge Bharwaney SC confirmed that the Court had jurisdiction to grant the interim relief sought under the new section 21M of the HCO and section 2GC(1A) of the AO.  Nevertheless, he emphasized that when exercising the newly founded jurisdiction, the Court must still abide by the general principles governing the grant of interim injunctions and other interim reliefs.  Upon close examination of the evidence, the learned Judge was convinced that there was insufficient material upon which the Court could act to grant the interim relief sought.

As the learned Judge had already ruled that the Trade Contractor’s application was bound to fail, he did not regard this as an appropriate occasion on which to pronounce whether the new jurisdiction under section 21M of the HCO could only be invoked for application in relation to court, and not arbitration, proceedings; or whether the jurisdiction under section 21M of the HCO is co- terminus with the jurisdiction under section 2GC of the AO.