In the recent case Provisional Liquidators of China Medical Technologies Inc v Samson Tsang Tak Yung [2015] HKEC 224, HCCW No.435 of 2012, the liquidators’ application to produce the “private papers” (such as bank statements and purported divorce documents) of the company’s former CFO was rejected by the Court.

Under section 221 of the Companies (Winding-up and Miscellaneous Provisions) Ordinance, Cap.32 of the Laws of Hong Kong (the “Ordinance”), the Court is empowered to order persons who have information relating to the “affairs, or property of the company” to be examined on oath (section 221 (1) and (2)) or to produce documents “relating to the company” (section 221(3)).

The liquidators in the case sought production of a wide-ranging of documents from the former CFO on the basis that he and his associates had allegedly been misappropriating the funds of the company following its IPO and issuance of bonds. In essence, the justifications for the production of the “private papers” put forward by the liquidators were that (1) the liquidators are responsible for the recovery of the company’s property and this included contingent claims on behalf of the company and (2) with reference to the similar powers in other common law jurisdictions the power of production should not be limited to documents “relating to the company” but included documents relating to the “affairs, or property” of the company”.

While granting wide orders for production against the CFO and orders for his examination, the Court refused to order production of the his private papers, considering that the power of production under section 221(3) of the Ordinance does not cover a defendant’s private papers and that “an order for production of private papers is more intrusive than an examination at which [the defendant] can be asked questions about his financial circumstances”.

It has been reported that leave to appeal against the decision has been granted. It remains to be seen whether the decision will be upheld in the appellate court.

On 4 December 2014, an insurance agent was sentenced to jail for 4 weeks for a contravention of section 50B(1)(c)(i) under the Personal Data (Privacy) Ordinance, Cap. 486 of the Laws of Hong Kong (“PDPO”). Under the said provision, a person commits an offence if he makes a statement to the Privacy Commissioner (“Commissioner”) which he knows is false or does not believe to be true or knowingly mislead the Commissioner, and is liable for a maximum fine of HK$10,000 and 6 months’ imprisonment.

The case followed a complaint lodged by an individual to the Office of the Commissioner claiming that the insurance agent had obtained her personal data through unfair means. During the investigation, the insurance agent falsely represented to the Commissioner that he had been assigned to work with the complainant when he was employed by his then employer which was denied by the employer. The insurance agent was convicted for the contravention of the said section 50B(1)(c)(i) of PDPO.

In addition to the above, other non-compliances of the PDPO may also lead to a prison sanction, such as:

1. Section 35C – use of personal data in direct marketing without taking specified action;
2. Section 35E – use of personal data for direct marketing without consent;
3. Section 50A – contravention of enforcement notice issued by the Commissioner; and
4. Section 64 – disclosure of personal data obtained without consent from data users with an intent to make a gain or to cause loss to the data subject or causing psychological harm to the data subject.

Given the first individual being sentenced to jail under PDPO, public and institutions should be more aware of the use of personal data and ensure compliance with the provisions in PDPO at all times.

The China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules 2015 (“the 2015 Rules”) applies to CIETAC arbitrations commenced on or after 1 January 2015, or where the parties agree to apply the 2015 Rules for arbitrations commenced before 1 January 2015.  Given Hong Kong has a separate judicial and arbitration regime, certain special provisions are provided for in the 2015 Rules for CIETAC arbitrations.  This article will provide a brief summary on the special provisions for CIETAC arbitrations administered by CIETACHong   KongArbitrationCenter.

Article 74 – Place of Arbitration and Law Applicable to the Arbitral Proceedings

This Article provided that unless otherwise agreed by the parties, for an arbitration administered by the CIETACHong KongArbitrationCenter, the default place of arbitration shall be Hong Kong.  The arbitration law of Hong Kong is the applicable law to the arbitral proceedings and the arbitral award made in a CIETAC Hong Kong arbitration shall be a Hong Kong award.

Article 75 – Decision on Jurisdiction

Firstly, in Article 75, it provided that any objection to an arbitration agreement and/or the jurisdiction over an arbitration case must be raised in writing before the submission of the first substantive defense whereas in the general provisions (Article 6.4) of the 2015 Rules, any objections can be made before the first oral hearing.

Secondly, Article 75 stated that the arbitral tribunal shall have the power to determine the existence and validity of the arbitration agreement and its jurisdiction over the arbitration case. In the contrary, under the general provisions (Article 6.1), the arbitral tribunal can only make such determination when CIETAC delegates the relevant power to the tribunal.

This special provision has brought the 2015 Rules applicable to the CIETAC Hong Kong more consistent with the international arbitration rules in relation to any jurisdictional challenges.

Article 76 – Nomination or Appointment of Arbitrator

The CIETAC Panel of Arbitrators is to be recommended in arbitration cases administered by the CIETACHong KongArbitrationCenter.  However, this Article also provided the option to the parties to nominate their preferred arbitrators from outside the CIETAC’s Panel of Arbitrators.  Consensus between the parties on nomination is not necessary.

Clearly, this gave some flexibility to the parties as compared to the general provisions (Article 26.2) where agreement between all parties must be reached.  Nonetheless, one should also note that even consensus between the parties is not a prerequisite, the nominated arbitrator is subject to the confirmation of the Chairman of CIETAC before he/she can be appointed.

Article 77 – Interim Measures and Emergency Relief

This Article conferred the power on the arbitral tribunal to order appropriate interim measures when requested by one of the parties, or if the arbitral tribunal has not yet been formed, a party may apply for emergency relief pursuant to the CIETAC Emergency Arbitrator Procedures.  This provided a more extensive power to the arbitral tribunal as compared to the CIETAC tribunals in mainland arbitrations.

Although Article 23 in the general provisions allows the parties to apply for an emergency arbitrator to grant any urgent interim relief, under PRC law, the power to grant such measures is generally reserved to PRC courts.  Therefore, CIETAC does not have the power to actually grant such relief to the parties and will have to forward such application to the relevant PRC courts.

The China International Economic and Trade Arbitration Commission (“CIETAC”) Arbitration Rules 2015 (“the 2015 Rules”) has come into effect on 1 January 2015, which will apply to all CIETAC arbitrations commenced on or after 1 January 2015. For arbitration proceedings commenced before 1 January 2015, parties may also agree to adopt the 2015 Rules.

One of the highlights of the new 2015 Rules is the introduction of emergency arbitrators under Art.23, which is in line with s.22B of Hong Kong’s Arbitration Ordinance. S.22B provides that any emergency relief granted, whether in or outside Hong Kong, by an emergency arbitrator is enforceable in the same manner as a court order with leave of the court. Such emergency relief may include:-

• Interim injunction to prevent actions which are likely to cause harm or prejudice to the arbitral process;
• Relief for preservation of assets;
• Security for costs of the arbitration, etc.

Another highlight of the 2015 Rules is that provisions which address multi-party disputes are introduced. Article 18 enables a party to file a request for joinder with CIETAC to join an additional party to the arbitration proceedings, and a decision shall be made by CIETAC after hearing submissions from all parties. CIETAC may also consolidate two or more arbitrations into a single arbitration under certain conditions stipulated in Article 19.

Please contact our Eric Lui or Heidi Chui for any enquiries or further information about this news.