Hong Kong court introduces Pilot Scheme for e-discovery; significant changes ahead, by Philipp Hanusch and Karen Dicks
New Practice Direction SL1.2
On 1 September 2014, a new Pilot Scheme for Discovery and Provision of Electronically Stored Documents (Practice Direction SL1.2) came into effect. It will be reviewed on or before 1 September 2015. Full article
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Ernst & Young ordered to produce accounting records and audit papers to the SFC, by Peter So and Karen Dicks
On 23 May 2014, Hong Kong’s High Court (Court of First Instance) handed down an unprecedented judgment, ordering Ernst & Young Hong Kong (“EY”) to produce to the SFC accounting records and audit papers (“the Documents”) relating to its work as reporting accountants and auditor for Standard Water Limited (“SW”), a company carrying on business in the PRC. SW had engaged EY for the purpose of its intended IPO and listing of its shares on the Stock Exchange of Hong Kong (“the Stock Exchange”).
The case raises important issues in relation to the legal obligations of Hong Kong accounting firms to disclose information about listing applicants carrying on business outside Hong Kong. It is the first case under section 185 of the Securities and Futures Ordinance (“SFO”) where the court has been asked by the SFC to inquire into a Hong Kong auditor’s non-compliance with statutory notices (“Notices”) issued by the SFC (under section 183 of the SFO) and to order compliance with such. Full article
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Intervention by the putative defendant in an application for leave to bring derivative action, by Joseph Kwan and KC Tai
Apart from the application which used to be known as a “s.168A petition” (now s.724 of the new Companies Ordinance (Cap. 622) (“CO”)) and a petition for the winding up of a company on the just and equitable ground under s.177(1)(f) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), applications for leave to bring a derivative action against a wrongdoer for misconduct committed against the company are also commonly seen in a shareholders’ dispute. This article will look at two cases where the putative defendants were allowed to join in the leave application. Full article
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The fact that one dispute has been referred to arbitration does not mean that the arbitration clause has been performed or discharged, in respect of further disputes, by KK Cheung
In court proceedings, the Plaintiff sought a refund of deposits, totalling almost US$6 million from the Defendants TS and B, under contracts with them and US$400,000 from another Defendant, J, who had guaranteed B's performance under B's contract with the Plaintiff.
The Defendants applied for the court proceedings to be stayed for arbitration pursuant to arbitration clauses in the contracts and guarantee. The Plaintiff opposed the application arguing that the arbitration clauses were inoperative because the parties agreement to refer disputes to arbitration had already been performed. Full article
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What constitute sufficient reasons for an arbitration award?, by Genevieve Lam
In the recent case, Arima Photovoltaic & Optical Corporation v Flextronics Computing Sales and Marketing (L) Ltd, CACV 194/2012, 4 June 2014, the Court of Appeal dismissed an appeal by the Plaintiff seeking to set aside an arbitral award on the basis that the arbitral tribunal’s ruling did not constitute a reasoned award and therefore breached Articles 34(2)(a)(iii) and (iv) and 34(2)(b)(ii) of the UNCITRAL Model Law on Arbitration which was given the force of law by the old Arbitration Ordinance (Cap.341). Full article