Summary:

The Court of Appeal in Citic Pacific Limited v Secretary for Justice (2015 HKEC 1263) disagreed with the narrow approach in Three Rivers (No.5) to the definition of “client”. In the context of corporations where the information may be acquired from employees in different departments or at various levels of the corporate structure, the court considered that the process of gathering information for the purpose of obtaining legal advice needs to be protected. The Court of Appeal also held that the “client” is simply the corporation, and the question is “which of its employees should be regarded as being authorized to act for it in the process of obtaining legal advice.”

Relying on the constitutionally entrenched right of legal professional privilege (hereinafter, “LPP”) (which is protected by Article 35 of the Basic Law), the Court of Appeal adopted a broader test for legal advice privilege than that previously adopted. It held that the “dominant purpose test” espoused by Tomlinson J (as he then was) in Three Rivers (No.5) sets the proper limit for legal advice privilege, i.e. an internal confidential document produced or brought into existence with the dominant purpose that it or its contents are used to obtain legal advice is privileged from production.

Conclusion

The impact of the Court of Appeal judgment is two-fold. Firstly, a broader definition of “client” has been embraced, one that is not just limited to the legal department of a corporate entity. Secondly, the “dominant purpose test” is considered more appropriate in setting the proper limit to legal advice privilege. As a result of this case, this means that documents produced by employees for the dominant purpose of obtaining legal advice are likely to be privileged.

Further, the Court of Appeal also noted the unsatisfactory nature of the procedure by which the matter had proceeded before the judge (the judge did not have the assistance he should have had from the parties in examining the documents), and urged the Department of Justice and the legal profession to consider the English experience of engaging an independent lawyer to deal with LPP material.

The latest figures released by the Australian Immigration Department have revealed that the number of Australian Temporary Work (Skilled) (Subclass 457) visa applications rose by 15% between 2014 and 2015. Such rise in “457 visa” applications mainly concerns accommodation and food services (37%), IT (31%), and professional, scientific and technical services (27%).

Source: http://www.workpermit.com/news/2015-07-17/australian-457-visa-applications-up-15

On 10 February, 2015, the National Development and Reform Commission (“NDRC”) announced a record fine of 6.088 billion yuan on Qualcomm for its alleged abuse of its dominant position on several specific markets in violation of the Anti-monopoly Law of the People’s Republic of China (“Anti-Monopoly Law”).

In Article 17 of the Anti-Monopoly Law, section 1 prohibits the sale of commodities at an unfairly high or low price; and section 5 prescribes the unreasonable tie-in sale of commodities or the addition of other unreasonable trading conditions.

There were examinations on Qualcomm’s market share for licenses of various standard essential patents (“SEP”) using wireless communications technology, and sales of CDMA, WCDMA and LTE baseband chips and it was proved that Qualcomm held a dominant position in each market. Qualcomm was found to have abused its dominant position by charging unfairly high royalty fees, tying the sale of SEPs with the sale of non-SEPs, and imposing unreasonable conditions on the sale of baseband chips.

In cases involving abuse of market dominance, the Anti-Monopoly Law permits fines of one to ten percent of the turnover for the preceding year. Qualcomm was fined less than ten percent of its China-based turnover due to its willingness to cooperate during the investigation and agreement to implement a rectification plan.

On 26 June 2015, the Litigation and Arbitration Committee of AllBright Law Offices and representatives from SWC co-hosted the International Dispute Resolution Forum 2015 (Qingdao) held at Garden Hotel, Qingdao for discussion and sharing on problems facing PRC corporations in cross-border transactions.

Our partners Mr. Eric Lui and Ms. Heidi Chui and Ms. Katy Lai of our litigation team attended the Forum. The Forum covered topics including how to gain an upper hand in cross-border disputes, intellectual property protection and litigation, how to manage risks in international ocean freight and risks and strategies in cross-border dispute resolution. Mr. Lui gave a presentation on questions commonly raised and key areas for PRC corporations involved in litigation overseas.

Please contact our Mr Lui for any enquiries or further information about this event.

SW partners Ms Catherine Por and Ms Wendy Lam attended the “Towards the Well-Being of the Child through the Hague Child Abduction and Protection of Children Conventions: An Asia Pacific Symposium” in Macao on 25th and 26th June 2015.

The Symposium was co-organised by the Hague Conference on Private International Law, the Department of Justice of the Hong Kong SAR and the Law Reform and International Law Bureau of the Macao SAR.

The Symposium focused on the complementarity between the 1980 Hague Child Abduction and 1996 Hague Protection of Children Conventions and the utility of mediation in achieving the objectives of the Conventions. Central Authority delegates and judges from different jurisdictions shared their experiences during the event.

Please contact our Ms Catherine Por or Ms Wendy Lam for any enquiries or further information about this news.

In a recent English case, Shagang South-Asia (Hong Kong) Trading Co. Ltd v Daewoo Logistics Corp. [2015] EWHC 194 (Comm), the High Court of England and Wales considered the situation where the contract provides for the arbitration to take place in one jurisdiction but to apply the laws of another jurisdiction.

The underlying dispute of the case involves two clauses in a fixture note between the owner of vessels (“the Owners”) and the charterers (“the Charterers”). Clause 23 of the note stated that “Arbitration: Arbitration to be held in Hong Kong. English Law to be applied.” Clause 24 stated that “Other terms/conditions and charter party details base on Gencon 1994 Charter Party.”

As the parties did not state which of the alternatives in clause 19 of the Gencon form should apply, English law and London arbitration became automatically applicable under clause 19(a).

The Owners then began arbitration in London and appointed an arbitrator as the sole arbitrator under clause 19(a). The Charterers disputed the appointment but the arbitrator ruled that the English Arbitration Act was applicable and he was properly appointed under clause 19(a).

The award of the arbitration was appealed in the High Court of England and Wales. The issue before the court was whether the arbitration was subject to English law or Hong Kong law.

The court considered the argument that the parties were based in Asia and that London is less convenient for the arbitration but held that it was not a determining factor. The judges gave significant weight to the words “arbitration to be held in Hong Kong” and ruled that the words implied a choice of Hong Kong as the seat of arbitration and Hong Kong law is applicable. “Significant contrary indicia” is necessary to displace the presumption.

The decision clarifies that the choice of an arbitration seat will imply a choice of the procedural law of that seat. Parties should also bear in mind the importance of clear drafting, especially in expressing their intentions on the arbitration venue and governing law clearly in the contractual documents. It is also worth noting that the judges in the case had also made positive comments on the Hong Kong arbitration system, stating that Hong Kong is a “well known and respected arbitration forum”.