In 周惠明 v 挪信新能源科技 ( 南通 ) 有限公司 & Anor [2025] HKCFI 1503, the Applicant secured worldwide Mareva injunctions and the appointment of interim receivers over all of the Respondents’ assets worldwide, as well as similar orders over assets in a Third Party’s name held on behalf of the Respondents, within months after the applications were taken out in aid of enforcement of arbitral awards.
Factual Background
In August 2024, the Applicant applied to the Hong Kong Court to enforce 4 awards made by the Shanghai Arbitration Commission (上海仲裁委员会). Amid various acts of dissipation, the Applicant secured worldwide Mareva injunctions against the Respondents and a Third Party holding assets on the Respondent’s behalf, together with orders that the parties should disclose the status of their assets. Leave to enforce the awards as judgments was also granted.
The Respondents not only failed to meet their disclosure obligations, but rather applied to set aside the Hong Kong Court’s leave to enforce the awards. Against this background, in December 2024, the Applicant applied for interim receivership orders over all of the Respondents’ assets around the world, and over specific assets in the name of the Third Party held on behalf of the Respondent.
The Court initially appointed interim Special Managers for the specific purpose of investigating the Respondents’ asset position. The Special Managers then appointed directors for some of the Respondents’ corporate vehicles pursuant to the Court’s orders.
The Judgment
After hearing forceful arguments from the parties, the Court granted the interim receivership sought, dismissed the Respondents’ setting-aside application, and continued the worldwide Mareva injunctions obtained by the Applicant.
As to the receivership and injunction orders against the Respondents, the Court accepted the Applicant’s submissions that with the dismissal of the Respondents’ setting-aside application, the present action is within the “post-judgment territory”, such that (1) the Court need not consider the underlying merits of the award, and (2) risk of dissipation will be more easily inferred. The Court further accepted that (1) the Respondents’ incomplete disclosures demonstrated a risk of dissipation justifying continuing the worldwide Mareva injunctions, and (2) the insufficiency of the Mareva injunctions and the likelihood of receivers by way of equitable execution being appointed justified appointing interim receivers to safeguard the Respondents’ assets.
As to the receivership and injunction orders against the Third Party, the Court likewise accepted the Applicant’s submissions that the Third Party acquired the Respondents’ assets without consideration, and hence was prima facie a nominee holding the assets on the Respondents’ behalf. This, together with the Third Party’s evasiveness regarding the status of the assets said to be held on the Respondents’ behalf, amply justified injunction and receivership orders being granted against the Third Party as well.
Key Takeaways
- Grant of Interim Receivership on a Worldwide Basis
The present case demonstrates the Hong Kong Court’s powers to grant an interim receivership order over assets abroad, provided that the respondent is personally within the jurisdiction of the Hong Kong Court.
This feature makes Hong Kong an attractive jurisdiction in which arbitral awards can be enforced against those within the jurisdiction. Applicants can use Hong Kong as a one-stop shop to obtain orders preserving assets around the world, avoiding the need to obtain separate enforcement orders in each jurisdiction where assets are held.
- Grant of Interim Receivership against Third Parties
The present case additionally reaffirms the Court’s powers to grant interim receivership over assets held by third parties, if there is a good reason to suppose that assets held by third parties would be susceptible to a procedure leading to satisfaction of a judgment against the respondent. The Court further observed that if the Court is going to grant interim receivership orders against the respondent, the same orders should be made to preserve the assets held in the name of third-party nominees on behalf of the respondent.
- Use of Interim Receivership Orders to Pave Way for Receivership by way of Equitable Execution
The Court recognized that in the post-judgment context, the likelihood of appointing receivers by way of equitable execution is a relevant consideration. Specifically, respondents cannot complain of any prejudice arising from the appointment of interim receivers where appointment of receivers by way of equitable execution is inevitable.
This feature is highly relevant to the enforcement of arbitral awards, since an application to set aside the permission to enforce an arbitral award may practically be a free “stay of execution” for the respondent. Applying for post-judgment interim receivership can effectively preserve and gain control over the respondent’s assets to pave way for eventual execution, notwithstanding the respondent’s attempts to derail the same.
Here, the Court accepted the Applicant’s argument that receivers by way of equitable execution was likely to be appointed because (1) the Respondents resorted to an unmeritorious setting-aside application to prevent enforcement, and (2) the opacity of the Respondents’ affairs meant no sensible commercial party would acquire their assets without court-appointed receives, if sale of those assets is needed to meet the awards.
- Flexibility of the Court’s Powers to Identify and Preserve Assets
The bespoke appointment of Special Managers for the specific purpose of investigating into the Respondents’ asset position demonstrates the Court’s creative readiness to use its powers to identify and preserve assets, in cases where the traditional injunction and disclosure orders are insufficient.
The immediate appointment of Special Managers could therefore be a useful device which future interim receivership applicants may rely on to achieve specific purposes as required by the situation, pending final determination of the receivership application.
- Expansive Terms of Receivership
This case also serves as a reminder that the powers of interim receivers necessarily have to be drafted broadly since a Court-appointed receiver derives all of his powers from the appointment order and does not have any inherent powers.
In the instant case, the Applicant secured powers for the receivers to do “all things reasonably necessary” to preserve the value of the Respondents’ assets, including (among other things) the power to manage, carry on and liquidate the Respondents’ businesses and those of their subsidiaries.
The full judgment can be found at this link.
Mr Christopher Chain SC, leading Mr Vincent Chiu and Mr Alex Yeung, instructed by Messrs Grandall Zimmern Law Firm, acted for the Applicant.
