The Court of First Instance (CFI) sets aside a Mareva injunction in Shengjing Bank Co., Ltd. (Beijing Zhongguancun Branch) v. Zhang Hongwei [2025] HKCFI 1753, emphasising the critical importance of full and frank disclosure in ex parte applications.
Case Summary
The Plaintiff bank alleged that the Defendant made fraudulent misrepresentations to secure credit facilities totaling RMB1.69 billion for a business group he controlled. The Plaintiff obtained a Mareva injunction, which was continued at the return date hearing. The Defendant applied to set aside the injunction, contending, among other grounds, that the Plaintiff failed to disclose material facts regarding related proceedings in the PRC.
Key Legal Issues
The Court addressed the following:
- Whether the Plaintiff fulfilled its duty to make full and frank disclosure during the ex parte application for the Mareva injunction.
- The relevance of undisclosed PRC proceedings to the Hong Kong action.
- Whether the material non-disclosure warranted setting aside the injunction.
Court Findings
The Court set aside the injunction, finding that the Plaintiff’s failure to disclose two sets of PRC proceedings was a deliberate and material non-disclosure. Key findings included:
- The PRC proceedings, involving the same credit facilities and the 2023 Guarantee, were highly relevant to the Hong Kong action, as they could reduce the Plaintiff’s claimed damages (§21).
- The PRC Preservation Order, covering RMB578.4 million in assets, potentially mitigated the Plaintiff’s losses, undermining the need for the Hong Kong injunction (§22).
- The Plaintiff failed to explain why the fraudulent misrepresentation claim was not pursued in the PRC proceedings, given the exclusive jurisdiction clause in the 2023 Guarantee (§24).
- The non-disclosure was deliberate, as the Plaintiff’s counsel acknowledged “good reasons” for omitting the PRC proceedings (§31(1)).
- The Plaintiff’s inability to provide satisfactory answers, even at the hearing, justified immediate setting aside of the injunction (§31(3)).
Key Takeaways
This case reinforces the stringent duty of full and frank disclosure in ex parte applications. Applicants must disclose all material facts, including related proceedings, even if they arise from different causes of action. Deliberate non-disclosure risks the immediate discharge of injunctive relief and cost penalties on an indemnity basis.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=168317&currpage=T
Mr William Wong SC, leading Mr Martin Kok, acted for the Defendant.
