Kei Kin Hung v Hua She Asset Management (Shanghai) Co Ltd

This is an application by Kei Kin Hung to set aside an order granting the respondent,

The application is brought under s. 103(2)(c) of the Arbitration Act 1996 (the “Act”) which provides that:

Hua She resists the application on the basis that Mr Kei unsuccessfully applied to have the award set aside by the supervisory court of the arbitration on the same or substantially the same grounds as are now raised in England and that he is accordingly estopped from having a second bite at the cherry. Alternatively, it would be an abuse of process for him to do so.

The evidence was less than complete in some respects and on some relevant points was positively exiguous. Mr George Hayman QC who appeared on behalf of Mr Kei submitted that one of the reasons for this was because Mr Kei had been suffering from serious mental health issues since at least August 2021. He relied on a medical report dated 19 August 2021 from a Hong Kong psychiatrist, Dr Choi, who diagnosed Mr Kei as suffering from severe depression with psychotic symptoms, and as lacking the mental capacity required to give instructions and testify in court. Further, on 4 October 2021, a Mr Zhu Lei was appointed to act as Mr Kei’s litigation friend and has conducted the proceedings on his behalf since then. Mr Hayman submitted orally that Mr Zhu has been unable to get instructions directly from Mr Kei and has had to obtain such information as he can from third parties. I note, however, that there is no evidence from Mr Zhu as to what, if any, attempts he has made to get instructions from Mr Kei.

On behalf of Hua She, Ms Lisa Lacob, while not challenging Dr Choi’s report, suggested that Mr Kei’s supposed inability to give instructions and engage with the proceedings was both intermittent and selective. I return to this below. Meanwhile, recognising that I do not necessarily have the full picture, and that at least some allowance should be made for Mr Kei’s ill health, I find the relevant facts on the evidence before me to be as follows.

Mr Kei is a PRC national, whose original name transliterated as Qi Jianhong in mandarin Chinese. He is and was at all material times a 95% shareholder in a PRC company, Beijing Yaolai Investment Co. Ltd (“Beijing Yaolai”), of which he was also the legal representative until 1 September 2020.

In about 2009 Mr Kei moved from the PRC to become a permanent resident of Hong Kong, and at the same time adopted the Cantonese transliteration of his name, viz. Kei Kin Hung. (Footnote: ¹) Dr Choi’s report nonetheless indicates that he has more recently been living in London with his family with a view to applying for residency here.

Hua She is a company incorporated in the PRC engaged in the business of investment management.

The arbitration in question related to claims by Hua She:

Both the Agreement and the Guarantee contained arbitration clauses, pursuant to which arbitration proceedings were commenced by Hua She against Beijing Yaolai and Mr Kei on 16 April 2020 before the Shanghai International Economic and Trade Commission under the rules of the Shanghai International Arbitration Centre (“SHIAC”).

At this date, Mr Kei was no longer resident in the PRC and it is his case that he knew nothing about the commencement of the proceedings. The hearing was listed for 20 August 2020, but in the absence of Mr Kei, Beijing Yaolai’s lawyer, Ms Liu Xianghui, applied for an adjournment.The basis on which the adjournment was sought and the precise course of events thereafter were matters of some controversy before me but the best evidence before the court is contained in:

Mr Kei denies that he ever gave authority for this power of attorney to be granted to Ms Liu but, be that as it may, Ms Liu appeared for both respondents at the hearing and advanced separate arguments on behalf of each of them.

The tribunal issued its award on 26 October 2020, substantially upholding Hua She’s claims against both respondents in the sum of over RMB 188,072,095.57 (equivalent currently to around £22.3 million). It accepted a defence that there had been a part payment of the debt (albeit in a smaller amount than asserted by Beijing Yaolai) but rejected a separate defence put forward by Ms Liu on behalf of Mr Kei that Hua She should be required to rely on other security in priority to the Guarantee.

Armed with the award but not having received any payment, Hua She set about trying to enforce it. First stop was the BVI on the basis that Mr Kei was the sole beneficial shareholder of a BVI company, Sparkle Roll Holdings Ltd (“Sparkle Holdings”) which held a substantial interest in a Hong Kong listed company, Sparkle Roll Group Ltd (“Sparkle Group”). On 9 November 2020, the BVI court registered the award as a judgment and granted worldwide freezing and disclosure orders against Mr Kei and Sparkle Holdings. On 1 December 2020, it continued the freezing order and granted a charge over Mr Kei’s shares in Sparkle Holdings.

On 13 January 2021, Mr Kei applied to set aside these orders. In support of the application, he served an affirmation dated 11 January 2021, in which he asserted (amongst other things) that:

In a second affirmation, Mr Kei claimed that he only became aware of the arbitration award and the BVI action on 14 December 2020 after his lawyers had discovered that someone had been attempting to serve papers on him in Hong Kong and had sent him copies of the documents in question.

Mr Kei failed to give any meaningful asset disclosure pursuant to the BVI order and, following a peremptory order, his application was struck out and he was debarred from taking any further part in the proceedings. It appears that between the date of the arbitration award and the BVI freezing order, Mr Kei had been steadily disposing of his interests in Sparkle Group. Shortly after the debarring order, and in prima facie breach of the freezing order, he caused the remainder of Sparkle Holdings’ shares in Sparkle Group to be transferred away, leaving Sparkle Holdings as an empty shell. By the end of March 2021, he had substantially divested himself of his interest in Sparkle Group. It is fair to say that Mr Kei, while admitting the transfers, denies any breach of the freezing order.

Having drawn a blank in the BVI, Hua She then turned its attention to Hong Kong. During the course of February and March 2021, the Hong Kong courts likewise registered the award and granted worldwide freezing and disclosure orders against Mr Kei. However, no asset disclosure at all was made in response to this order.

In May/June 2021, Hua She uncovered grounds for thinking that Mr Kei might have substantial assets in England. Two properties and a horse were identified and on 16 July 2021 at a without notice hearing, Knowles J entered judgment against Mr Kei in terms of the award and granted a domestic freezing injunction against his assets. No disclosure order was made at this stage. I am informed by Ms Lacob that the only reason

On 20 August 2021, Mr Kei made the present application to set aside the order of Knowles J.

The application was supported by a witness statement of Lin Hou, a solicitor advocate with Zhong Lun Law Firm representing Mr Kei. The primary ground relied upon by Mr Lin was that Mr Kei did not sign the Guarantee. From this it was said to follow that:

It was further submitted that Hua She had, in breach of its duty of full and frank disclosure, failed to disclose to Knowles J:

Importantly, Lin Hou also deposed to the fact that Mr Kei had taken steps to investigate relations between Beijing Yaolai and Hua She and that, although investigations were still ongoing, preliminary findings had shown that Hua She had caused Beijing Yaolai to transfer shares in five subsidiaries (the “Tangshan companies”) without consideration to a company associated with Hua She controlled by one Liu Zheng. It was said that the Tangshan companies between them owned property worth some RMB 2.57 billion (subject to mortgages) and that this transfer had in substance effected an offset of Beijing Yaolai’s debt to Hua She. It was asserted that these facts likewise had not been disclosed either in the arbitration or to the English court.

This is the first occasion on which any suggestion was made that the debt in respect of which Hua She was claiming had in fact been settled prior to the commencement of the arbitration. The submission seems to have been based on further investigations carried out during the course of 2021 by Mr Donald Li. Although not exhibited to Lin Hou’s statement, there is a report from Mr Li dated 19 August 2021 in the documents before the court which contains the following relevant findings: (i) the shares of the Tangshan companies were originally pledged to Hua She to secure a separate loan; (ii) the loan

Lin Hou’s witness statement also claimed for the first time that Mr Kei was suffering from serious mental health problems and sought an extension of time for serving further evidence, relying in this respect on Dr Choi’s report.

Meanwhile, on 8 October 2021, in the light of its concerns that Mr Kei was seeking to obstruct enforcement and may have dissipated his assets in breach of the BVI freezing order, Hua She obtained a variation to the English freezing order. This now required Mr Kei to make disclosure of any assets valued at more than £10,000 in the UK, including the properties identified in the UK, and to give details of all his bank accounts in the UK.

On 22 October 2021, Mr Kei’s litigation friend, Mr Zhu, served a witness statement in support of the present application, confirming that he had been given instructions on behalf of Mr Kei to make an application to the supervisory court in Shanghai to set aside the arbitration award. He also exhibited the Donald Li report and submitted that the share transfer without consideration amounted to a set-off of the debt.

As foreshadowed by Mr Zhu, an application was made on behalf of Mr Kei on 3 November 2021 to the Shanghai Second Intermediate People’s Court as the relevant supervisory court of the arbitration to set aside the award. It is common ground that under Article 58 of the Arbitration Law of the PRC, there are only limited grounds on which such an application can be made, including the following on which Mr Kei’s application was founded:

In support of the application under Article 58(3), Mr Kei stated that Ms Liu had been appointed by Beijing Yaolai to represent him without his consent. He claimed that Ms Liu had been doubtful about the validity of the power of attorney and had consulted SHIAC who had informed her that it needed to be signed in person. Accordingly, he submitted that under SHIAC Rules the power of attorney was invalid in the absence of

In support of the application under Article 58(5), Mr Kei asserted that Hua She had withheld from the tribunal the fact that it had acquired an equity pledge of the Tangshan companies in September 2017 and had subsequently illegally procured the transfer of the entire equity in these companies to an affiliate company without payment of any consideration. He submitted that the withholding of this information was sufficient to impact the impartiality of the arbitration. It is noteworthy that Mr Kei did not submit that the share transfer had effected any offset of the debt for which Hua She was claiming.

In the light of the Shanghai proceedings, Mr Kei applied for and was granted permission by the English court to amend his application in this jurisdiction to seek alternatively an adjournment or stay of enforcement pursuant to s. 103(5) of the Act pending the decision of the Shanghai court.

On 10 December 2021, Hua She submitted its response in the Shanghai proceedings. The first point on which it relied was that, even accepting Mr Kei’s evidence that he only received a copy of the award on 14 December 2020, the application was well outside the applicable six month time limit. As regards the power of attorney, Hua She denied that Ms Liu had consulted SHIAC or been told by them that a handwritten signature was required as alleged. In relation to the allegation of concealment, Hua She stated that the equity pledge and share transfer relied upon were irrelevant to the claim made in the arbitration and related to a different transaction. Hua She also asserted that Mr Kei was attempting to resist and delay enforcement and to dissipate his assets.

The Shanghai proceedings were heard by the court on 17 December 2021. A few days earlier, on 14 December 2021, the court took what I understand to be the unusual step of interviewing Ms Liu as to the circumstances surrounding the power of attorney and her representation of Mr Kei. The material part of the transcript of her interview is set out at paragraph 11.i) above.

At the hearing, the court invited both parties to make submissions on the transcript of Ms Liu’s interview. Mr Kei’s lawyer relied on it as support for his submission that the power of attorney given to Ms Liu had not been authorised by Mr Kei himself, and that Beijing Yaolai had affixed his signature seal without his knowledge or authorisation. He submitted that service on Ms Liu was accordingly insufficient to constitute proper service on Mr Kei. For its part, Hua She asserted that the change in legal representative of Beijing Yaolai did not take place until 1 September 2020, after commencement of the arbitration, and that since the authority of Mr Kei was required for such a change to take place, it was impossible for him not to have known about the proceedings.

The Shanghai court rendered its decision on 27 December 2021 dismissing Mr Kei’s application. It set out the facts of the case, including that the power of attorney submitted by Ms Liu had been stamped with Mr Kei’s signature seal but not signed by him personally. It also recorded Mr Kei’s submission that his signature seal had been

The court found expressly (i) that Mr Kei was a 95% shareholder of Beijing Yaolai and also its legal representative prior to 1 September 2020 and (ii) that he had himself placed his signature seal with the company for it to use. In these circumstances, it held that the tribunal did not violate any provisions of the SHIAC arbitration rules in accepting the power of attorney as valid authorisation of Ms Liu to represent Mr Kei in the arbitration. Accordingly, service of the award on Ms Liu was procedurally valid and Mr Kei’s application was time-barred.

The court nonetheless went on to address the concealment allegation. It held that this had not been established as the representative jointly authorised by Beijing Yaolai and Mr Kei (i.e., Ms Liu) had participated fully in the arbitration but had not requested Hua She to submit the allegedly concealed evidence.

The only other evidence to which it is necessary to refer is a witness statement of Mr Yuan Lin dated 11 February 2021 which was served as part of Mr Kei’s reply evidence in this application. Mr Yuan is an employee of Beijing Yaolai who joined the company in September 2019 as Head of the Debt Restructuring Management Committee. In his statement he relies on information given to him by Liu Zheng to support an assertion that the debt claimed by Hua She had already been settled in full by Beijing Yaolai prior to commencement of the arbitration. While Mr Yuan accepts that he knew about the arbitration proceedings and indeed was the exclusive point of contact between Beijing Yaolai and Ms Liu, he states that he was completely unaware of this fact at the time and that it had only recently come to his attention following his own investigations into the historical commercial dealings between Beijing Yaolai and Hua She. Accordingly, he had not been able to make Ms Liu aware of the defence and mistakenly thought that the debts claimed were genuine.

More specifically, Mr Yuan states that he became aware in the summer of 2021 from Donald Li that the shares in the Tangshan companies had been transferred to Liu

During the course of these communications, Liu Zheng explained to Mr Yuan that the share transfer had taken place because Beijing Yaolai wanted an extension of time for repayment of its outstanding liabilities. However, Hua She was concerned that Beijing Yaolai was in dire financial straits and at risk of claims from other creditors. Accordingly, it was agreed that the equity in the Tangshan companies would be transferred to a nominee company for nil consideration and that Hua She could then either sell the shares or the underlying assets or use them to raise further funds to cover

Mr Yuan accepts that Liu Zheng did not actually state expressly during their exchanges that the purpose of the share transfer was to settle Beijing Yaolai’s outstanding debts; this was an assumption which he, Mr Yuan, had made given the explanation for the transfer.

This, then, is the factual and procedural background against which the present application falls to be determined.

Unsurprisingly, there was little dispute as regards the applicable legal principles. They have in any event been comprehensively considered very recently by Butcher J in Carpatsky Petroleum Corp. v Ukrnafta, [2020] EWHC 769 (Comm) whose exposition at [120]-[126] I gratefully adopt and incorporate.

In summary:

It was accepted by Mr Hayman that Mr Kei’s application was doomed to failure unless he could bring himself within s. 103 as a starting point. His argument was two-fold:

Ms Lacob’s response on behalf of Hua She was that substantially the same arguments had been raised before the Shanghai court and that Mr Kei was therefore issue estopped from raising them again and/or to permit him to do so would be an abuse of process.

Mr Hayman’s riposte to this was that there were exceptional circumstances because Hua She must have known that the debt had been settled by the share transfer but nonetheless concealed that fact from the arbitration tribunal and the Shanghai court and instead gave a misleading explanation for the transfer. It continued to conceal this fact from the BVI and Hong Kong courts and also from the English court in breach of its duty of full and frank disclosure.

I put it to Mr Hayman that the substance of this allegation came perilously close to asserting that Hua She had obtained the award by fraud. If so, the public policy exception in s. 103(3) of the Act would be engaged and wholly different considerations would apply. Not least, such a case would need to be properly set out with the degree of particularity appropriate to an allegation of fraud. In response, Mr Hayman expressly confirmed that he did not put his case in this way and that he was not relying on s.103(3). The scope of his application was instead confined to s. 103(2)(c) on the basis outlined above. He further accepted that the alleged concealment on which he relied was not per se a ground for refusing enforcement under s. 103; rather he was relying on it as a factor bringing the case within the category of exceptional circumstances which would defeat Hua She’s argument based on issue estoppel/abuse. But of course, as Mr Hayman also realistically accepted, the question of exceptional circumstances does not arise at all unless Mr Kei can prove (the burden of proof being expressly on him) that the case falls within s. 103(2)(c) to begin with.

Mr Kei’s argument is that he was unable to present his case because he was not given proper notice of the arbitration proceedings and was therefore not properly represented. Both parties made their submissions before me on the basis that the validity of Ms Liu’s appointment had been raised before the Shanghai court and that there was therefore a prima facie issue estoppel unless Mr Kei could establish exceptional circumstances.

However, it seemed to me that there was a potential distinction to be drawn between procedural validity and actual knowledge, since it is by no means impossible that Mr Kei may have been validly served and/or represented for the purposes of the applicable procedural rules without ever actually becoming aware of the proceedings. For example, a litigant may provide an address for service and service at that address might be sufficient for the purposes of the particular arbitration rules, but there may be noone at that address at the relevant time to receive service or to inform the litigant that it had taken place.

I note, in particular, that in using the word “otherwise”, s. 103(2)(c) expressly contemplates that a party may find itself unable to present its case for reasons going beyond mere procedural invalidity. I therefore queried with the parties whether there could be an issue estoppel if the Shanghai court had adjudicated only on the procedural validity of the service which had taken place and not on the question of actual knowledge.

In response, Ms Lacob submitted: (1) that I should not adopt too narrow a focus when assessing whether the same or substantially the same issues had been raised before the Shanghai court; (2) the Shanghai court had at least implicitly found that Mr Kei had actual knowledge of the proceedings; (3) in any event, the weight of the evidence suggested that he did know about them.

It is clear from his submissions to the Shanghai court (see paragraphs 29-32 above) that Mr Kei relied on both his lack of actual knowledge and the alleged procedural invalidity relating to Ms Liu’s power of attorney, and that Hua She’s response was that he must have known about the arbitration. The question of actual knowledge was therefore squarely before the court.

The Shanghai court’s findings are set out in paragraph 35-37 above. Ms Lacob submitted, in reliance on expert evidence adduced by Mr Kei, that actual authority was relevant to the validity of the power of attorney as a matter of Chinese law and that the Shanghai court must therefore have decided that Mr Kei knew about the proceedings otherwise it could not have held that the power of attorney was procedurally valid.

I am not persuaded by this. The expert evidence in question was based on the premise that Article 17 of the SHIAC rules required a power of attorney to be notarised by virtue of Article 264 of the Civil Procedure Law of the PRC. However, it is by no means obvious – at least to me – that Article 264 in fact applies to Mr Kei. I would certainly be reluctant to make any findings on this basis without more detailed investigation and analysis of Chinese law in this regard.

That said, I accept that the submission was squarely put before the Shanghai court that the power of attorney was invalid without Mr Kei’s actual knowledge and that Hua She submitted in response that he did have such knowledge. The court’s findings must be read in this context. It is therefore significant that the court did not say that the question of knowledge was irrelevant to the procedural validity of the power of attorney, which (if it was the case) might have been expected given the nature of Mr Kei’s submissions. I am therefore inclined to accept Ms Lacob’s argument that there was an implicit finding of knowledge sufficient to support an issue estoppel.

But it is not necessary for me to go so far, because I am in any event not satisfied that Mr Kei had no knowledge of the arbitration. I take into account, in particular, the following:

In short, the only concrete evidence to support Mr Kei’s assertion that he did not know about the arbitration is the undisputed fact that he did not sign the power of attorney in person. In my judgment this falls a long way short of proving on a balance of probabilities as required by s. 103(2) that Mr Kei did not have actual knowledge of the arbitration and so was unable to present his defence.

That in itself is sufficient to dispose of this application and accordingly the question of whether there are exceptional circumstances capable of defeating an argument of issue estoppel or abuse of process does not strictly arise. Nonetheless, the submissions on this issue formed a substantial part of the argument on both sides and it is right that I express my views briefly.

As explained in paragraphs 45-48 above, Mr Hayman does not rely on the share transfer as an independent ground for setting aside the enforcement order under s. 103(2). Moreover, he expressly confirmed that there was no challenge to Mr Yuan’s evidence that Mr Kei was himself a party to the alleged settlement agreement. In those circumstances, his argument ran as follows:

It follows that the argument under this head must be approached on the hypothesis (contrary to my findings above) that Mr Kei has established that he had no knowledge of the arbitration and so was unable to raise the defence for that reason.

Two broad questions therefore arise:

I am satisfied on the basis of the evidence before me that the loan in respect of which the shares of the Tangshan companies were originally pledged was repaid to the knowledge of Hua She and that the subsequent share transfer must therefore have had some different purpose. Moreover, there is force in Mr Hayman’s submission that Hua She has been decidedly coy about that purpose. Before the Shanghai court, it simply denied that either the equity pledges or the share transfer had any relevance to its claim; it did not either then or now attempt to explain the real rationale of the transaction.

Notwithstanding this reticence, I note that:

While the evidence does not enable me to make a finding one way or the other, all of this casts some doubt on Mr Kei’s assertion that there had been an agreed settlement of Beijing Yaolai’s debt by set-off. Nonetheless, it is not disputed that Beijing Yaolai was in serious financial difficulties in 2018 and I am prepared to assume in Mr Kei’s favour that he has at least an arguable case that the purpose of the transfer was to avoid the consequences of Beijing Yaolai’s insolvency and that it may have given rise to an offset of the debt claimed by Hua She in the arbitration.

However, an arguable case is not sufficient basis in my judgment for an allegation of concealment. Absent a finding that there was a settlement/set-off, there can have been nothing for Hua She to conceal unless it knew that Mr Kei had already raised the point or had reason to believe that he might do so in the future. It is one thing to say that Hua She knew for a fact that its claim had been settled and deliberately concealed this from the court. But short of that, the most it could have been expected to disclose was any potential defence of which it was or ought to have been aware.

As to this:

It is true that there is an air of unreality about the Shanghai court’s later finding that there was no concealment because Ms Liu could have requested the concealed evidence to be disclosed. I accept that Mr Yuan did not know about the evidence and that Mr Kei could not have made any such request because, ex hypothesi, he did not know about the arbitration. Nonetheless, this seems to me to be irrelevant. For the reasons given, Mr Kei fails to satisfy me that there was any relevant concealment at all.

I reach a similar conclusion in relation to the alleged failure to make full and frank disclosure to the BVI, Hong Kong and English courts. (Footnote: ³) As appears from the factual narrative set out above, Mr Kei did not refer to the share transfer at all in the BVI proceedings, despite being party to the alleged settlement agreement. Indeed, it was not until the present application in August 2021 that a defence of settlement or set-off was first raised by him. It is not disputed that Hua She put before Knowles J the defences

This leaves the proceedings before the Shanghai court. Mr Kei’s application to the Shanghai court under Article 58(5) substantially reflected Mr Li’s report of 19 August 2021, alleging concealment by Hua She of the fact that it had previously held equity pledges of the shares of the Tangshan companies, and then subsequently illegally procured an outright transfer of the shares without consideration. Nothing at all was said about any settlement agreement or set off, despite the evidence served in support of the English application, only that the award should be set aside because the value of the companies transferred exceeded the amount of the debt.

This is extraordinary. Mr Hayman submitted that Mr Yuan’s evidence was not available to Mr Kei at that date but I am unable to accept this. According to Mr Yuan, his own investigations were prompted by Donald Li’s findings. No evidence has been put before the court from either Mr Yuan or Mr Kei as to what communications were taking place between the two of them during the course of 2021, but it was not contended that Mr Yuan could have become aware of Mr Li’s investigations otherwise than from Mr Kei. In those circumstances, it simply beggars belief that Mr Yuan did not tell Mr Kei about the information he had obtained from Liu Zheng culminating in their exchanges in the first week in September 2021. Indeed, the reference to set-off in Zhu Lei’s statement of

No explanation has been put before the court as to why he did not do so. Mr Kei’s litigation friend does not say that he has ever attempted to find out from Mr Kei why this was, and Mr Yuan merely says that he does not know why the defence has never previously been raised. Plainly Mr Kei could with reasonable diligence have raised the point and if there was any concealment by Hua She at that stage it cannot have had any causative effect.

This in turn led to a debate in argument as to whether Mr Kei was issue estopped from raising his concealment argument (even in the guise of “exceptional circumstances”) on the basis that it had been adjudicated upon by the Shanghai court, alternatively whether taking the point when it could have been taken earlier was an abuse of process. While the share transfer was in issue before the Shanghai court (albeit not in the context of settlement/set-off), I would have been reluctant to find any issue estoppel on the basis of the Shanghai court’s somewhat illogical decision on concealment (see paragraph 68 above), particularly since it was also obiter given that the application was primarily dismissed on grounds of time-bar. However, to the extent that the specific issue of settlement/set-off was not raised before the court it clearly could and should have been. Ms Lacob was therefore on strong ground in arguing that it is an abuse of process for Mr Kei to seek a second bite of the cherry: see the discussion in Alexander Bros Ltd

But it is unnecessary to get into any of this since, in my judgment, Mr Kei has failed at the first hurdle to establish that there was any relevant concealment by Hua She. To the extent that its explanation of the share transfer before the Shanghai court left something to be desired, this in itself cannot have caused him any prejudice as by then he had all the information required to run the point himself. Accordingly, there are no circumstances which in my view can be categorised as exceptional.

Should I have been minded to find that there was indeed a prima facie case for setting aside the order, Ms Lacob invited me as a fall-back to exercise my residual discretion not to do so.

I do not propose to deal with this argument in any detail as it does not arise on my findings. Suffice it to say that she made a number of forceful points based on Mr Kei’s conduct, and suggested that these disclosed a pattern of non-compliance and obfuscation by him in a clear attempt to avoid or delay any meaningful enforcement. She drew attention to the following:

In the light of Dr Choi’s report, there can be little doubt that Mr Kei is currently suffering from a serious depressive illness and I have every sympathy for him in that regard. Nonetheless, it does not appear to have impeded him from engaging meaningfully over the last 18 months in various sets of legal proceedings. There are clearly issues as to his credibility arising from the matters relied on by Ms Lacob and, as she submits, there is a striking absence of evidence from Mr Zhu as to why he has not sought relevant instructions from Mr Kei or, if he has, what response he received.

Had it been necessary to do so, therefore, I would have needed to consider very carefully whether it was indeed appropriate to set aside the enforcement order or whether I should exercise my discretion to maintain it. In the event, of course, the question does not arise and I express no opinion on the point.

No separate argument was addressed by counsel regarding the freezing order but this clearly stands or falls together with the enforcement order. The amended application under s. 103(5) has fallen away following the decision of the Shanghai court and was not pursued.

Accordingly, the application is hereby dismissed.