In Re Sirnaomics Limited [2025] HKCFI 4284, DHCJ Gary CC Lam stayed an unfair prejudice petition under section 724 of the Companies Ordinance, with the respondents arguing that disputes over restrictive share legends fell within arbitration clauses in earlier agreements.
Jurisprudential Methodology
The Court adopted an approach widely supported by common law authorities (including Hong Kong, Singapore, Australia, and the UK) for identifying disputes subject to arbitration, drawing from the UK Supreme Court’s Republic of Mozambique v Privinvest and Privy Council’s FamilyMart decisions to promote legal certainty and uniformity.
- Courts should not be “overly respectful” to pleading formulations designed to avoid arbitration
- Equal scrutiny should apply to defendant formulations aimed at securing stays
- The overarching consideration is identifying the “true substance of the matter or dispute”
- A practical and common-sense approach should be adopted
Practical Application
The Court found that despite the petitioners formulating their claim based on breach of “Tripartite Understanding,” implied terms in Articles of Association, and Braganza duties, the true substance was enforcement of a Members’ Agreement clause governing share certificate legends.
Read the judgment here at:
Lai Chun Ho and Han Sheng Lim represented the Petitioners.
Jasmine Cheung and Billy Liu represented the 1st Respondent.
Charlie Liu represented the 2nd Respondent.
