Wisdom Newsletter – Shipping (Issue 37)


Anti-Suit Injunction: Is multiplicity of proceedings necessarily unconscionable?

Plain Sail Holdings Ltd v Lau Wing Yan [2020] HKCFI 653

This case concerns an application by the Plaintiffs for orders restraining the Defendants from pursuing proceedings against the Plaintiffs in relation to vessels formerly known as MV “BBG Hope” and MV “BBG Glory” (“Vessels”) and specifically certain proceedings commenced against the Plaintiffs in Second Maritime Court in Panama (“Panama Proceedings”).

After a careful consideration of the relevant factors and arguments, Madam Recorder Yvonne Cheng SC dismissed the Plaintiffs’ application.


The Defendant and another individual Mr. Chu Kong (“Chu”) each own 50% of a BVI Company known as Ocean Sino Limited (“OSL”). OSL owned a Hong Kong Company known as PBM Asset Management Limited (“PBM”), which owned 49% of the share in BGA Holdings Limited (“BGAH”). BGAG wholly owned (directly and directly) various subsidiaries (“BGAH Subsidiaries”) that ultimately owned the Vessels.

The BGAH Subsidiaries entered into an addendum agreement to loan agreement with Premier Bright Holdings Limited (“Premier”) to, inter alia, grant a ship mortgage over the Vessels in favor of Premier’s nominee, Lohas Finance Limited (“Lohas”). On BGAH Subsidiaries’ default of the loan, the Vessels were put to sale and acquired by the Plaintiff.

The Defendant said that the aforesaid loan agreements, nomination agreement of Lohas and the mortgage was made without his knowledge. He further claimed that the default loan agreement was engineered by Chu for his benefit.

Proceedings commenced by the Defendant

The Defendant issued 2 in rem writs in Hong Kong respectively against the Vessels as well as 2 admiralty actions seeking orders to rectify the register of the HK Shipping Registry in relation to the Vessels (“HK Proceedings”). The BGAH Subsidiaries issued Summons to strike out the writs in the HK Proceedings, which were subsequently withdrawn. The writs in the Hong Kong Proceedings were never served on the Plaintiff.

The Defendant commenced 2 actions in rem in Singapore. The writs of both actions had already expired at the time of hearing of the Plaintiff’s application.

The Defendant commenced the Panama Proceedings for, inter alia, a declaration that the mortgage and sale of the Vessel were invalid and obtained an injunction to prohibit the transfer, sale, disposal, cancellation from the Panamanian Registry or recording encumbrances or mortgages on the Vessels and ordered various directorates of the Panamanian Maritime Authority to abstain from, and ban, the recording of any such acts (“Panama Injunction”). The Plaintiff sought to appeal the Panama Injunction and challenged the jurisdiction of the Panamanian Court, both the appeal and the jurisdictional challenge were dismissed.


The learned judge noted that an anti-suit injunction may be granted where the conduct of the party to be restrained is unconscionable, vexatious or oppressive. Her Ladyship also referred to, inter alia, the following principles, established by the leading authorities:

(1) Where the Court is not enforcing an exclusive jurisdiction agreement, an anti-suit injunction should only be made in exceptional circumstances where justice requires intervention of the Court.

(2) It is a minimum but insufficient requirement for the applicant to show that the local forum is the natural forum (that is, clearly more appropriate than other forum). It does not suffice to show that the local forum is merely a natural forum, that is, one that is not inappropriate.

(3) After satisfying that local forum is the natural forum, the Court should then consider whether justice requires the claimant in the foreign court be restrained from proceeding there.

After considering the facts of the case, the Court was not persuaded that Hong Kong was clearly the more appropriate forum.

More remarkably, the Court held that it in any event did not consider the foreign proceedings to be unconscionable. The learned judge rejected the Plaintiff’s argument that there was no legitimate reason behind the multiplicity of the proceedings. Specifically, Her Ladyship took note that:

(1) the Hong Kong Proceedings were commenced against the backdrop of BGAH, Lohuas and Chu’s refusal to desist from selling the Vessel. Moreover, at the material time, the Vessels flew the Kong flags and were registered in Hong Kong.

(2) The Singapore Proceedings were commenced because the Defendant heard from the brokers the Vessels were to be delivered to their buyers respectively in Singapore and between Singapore to Japan.

(3) The Panama Proceedings were commenced due to change of the Vessels’ registration to Panama.

(4) the Defendant did not thereafter pursue the Hong Kong Proceedings nor the Singapore Proceedings.

The Court also held that since the Defendant had all along not proceeded with the Hong Kong Proceedings (the writs of which were never served on the Plaintiff) and now agreed to undertake not to proceed with them, it could not be said the Singapore Proceedings or the Panama Proceedings were commenced in bad faith for the purpose of frustrating Hong Kong proceedings or that there are proceedings in Hong Kong which needed to be protected by the grant of a restraining order.

The Court also rejected the Plaintiff’s argument that the Panama Proceedings was hopeless. Specifically, it was noted that that the Plaintiff was unable to show that the Panama Proceedings was “so utterly absurd that it cannot possibly succeed” or “plainly bound to fail’ in circumstances where the Plaintiff’s appeal of the Panama Injunction and its application to annual the Panama Proceedings were both dismissed by the Panama Court.

In similar vein, the Court dismissed the Plaintiff’s argument that the Defendant knew his claims in Panama Proceedings was hopeless. The basis of the Plaintiff’s argument that was that A Chan J had held in the judgment concerning the costs of the striking out applications of the Hong Kong Proceedings, which were analogous with the Panama Proceedings, that the Hong Kong Proceedings were plainly unsustainable. However, Madam Recorder Yvonne Cheng SC noted that A Chan  J was not expressing any view on the merits of the Panama Proceedings, which in any event could not be said to be hopeless in the light of the Panama Court’s dismissal of the Plaintiff’s appeal and jurisdictional challenge.


A party relying on a contractual entitlement not to be sue in a foreign jurisdiction has, in the absence of some special circumstances, a legitimate interest under the contract to enforce that contractual right against the other party to the contract. Thus, where a foreign suit is brought in breach of a Hong Kong jurisdiction or arbitration clause, the Court will ordinarily grant an anti-suit injunction to restrain the said foreign suit.

On the other hand, where a party relies on conduct which is unconscionable for a non-contractual reason, the legitimate interest must be the existence of local proceedings which need to be protected by the grant of an anti-suit injunction. Specifically, this case shows that multiplicity of proceedings is not unconscionable per se and will not amount to a ground for granting an anti-suit injunction at least insofar as there are legitimate grounds for bringing proceedings in more than one jurisdictions. It also demonstrates that the Hong Kong Court will be reluctant in finding a foreign action to be hopeless in circumstances where the foreign court has allowed the action to proceed.

This is a welcome decision to those operating in the maritime world, who often have legitimate needs to commence proceedings in multiple jurisdictions, for the purpose of protecting their interests.