In brief The Court of Final Appeal (CFA) has, in its recent judgment (link to Judgment), considered the applicable test for determining whether a Quistclose trust exists. In simple terms, a Quistclose trust (named after a House of Lords decision) is a type of trust that comes into existence when a person transfers money or property to another person by way of a loan or otherwise, with the intention that the money or property be used for a specific…
In brief A recent decision of the Hong Kong Court reaffirmed the robust approach taken by the Court in examining the enforceability of a non-compete clause in an employment context even at the interim-interim stage. A former employer has the burden of proof to adduce evidence to substantiate that a non-compete clause is reasonable and necessary for the protection of the former employer’s legitimate business interests for it to be enforceable. The Court will take…
In brief On 10 April 2024, the Hong Kong Court of Final Appeal (CFA), Hong Kong’s highest court, delivered its judgment in Tam Sze Leung & Ors v Commissioner of Police [2024] HKCFA 8, affirming the validity of the ‘No Consent Regime’ (“Regime”) of the Hong Kong Police (“Police”). As we set out in our previous alerts (here, here and here), the Regime encompassed a practice of issuing “Letters of No Consent” (LNCs) to financial institutions for customer accounts that…
In brief On 29 January 2024, the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (“Arrangement”) has taken effect simultaneously in both Hong Kong and the Mainland. The Arrangement establishes the mechanism for the reciprocal recognition and enforcement of judgments in civil and commercial matters between the Mainland and Hong Kong. Certain procedural steps must be taken by…
In brief This recent Court of First Instance judgment ([2023] HKCFI 2932) is another unsuccessful judicial review against the decision of the Listing Review Committee (LRC) of The Stock Exchange of Hong Kong Limited to impose disciplinary sanctions on two independent non-executive directors (INED) (“Applicants”) of a listed company (“ListCo”). These applications remain to be an uphill battle. In June 2023, the LRC upheld the Listing Committee’s decision that the Applicants should be publicly censured…
In brief A recent decision by the Court of First Instance in Re Gatecoin Limited[1] ruled that cryptocurrencies are “property” and are capable of being held on trust. This is a welcomed decision, clarifying the nature of cryptocurrencies and the interests of investors when depositing cryptocurrencies with exchanges. Key takeaways The decision affirms the proprietary nature of cryptocurrencies in Hong Kong. The decision has significant implications for players in the cryptocurrency market: Gatecoin Limited (“Gatecoin”) operated…
In brief The long overdue “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill” (“RE Bill”) was passed by the Hong Kong Legislative Council on 26 October 2022. The RE Bill implements the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region”, which was signed between the Supreme People’s Court of the Mainland and the HKSAR…
In brief In one of the first cases in Hong Kong in which the court has granted freezing injunctions over bitcoins, the Court of First Instance has now handed down judgment in the trial of Nico Constantijn v Stive Jean-Paul Dan [2022] HKCFI 1254. The court held that the defendant acted as the plaintiff’s sales agent in respect of the plaintiff’s bitcoins. The court found the defendant had breached his fiduciary duties in failing to account to…
In brief The Hong Kong court has delivered an important judgment on the interpretation of Rule 2.10 of the Takeovers Code and provided practical guidance on the types of court meeting that may be approved for privatisation of a Hong Kong incorporated company pursuant to a scheme of arrangement under the Companies Ordinance and the Takeovers Code. In view of the pandemic-related travel restrictions, the Court also directed a hybrid court meeting, allowing overseas shareholders…
From a civil litigation and insolvency perspective, we look at the key impacts of the Hong Kong Courts’ recent General Adjournment of Proceedings (GAP) from 7 March 2022 to 11 April 2022 and related governmental closures. Key Takeaways 1. The recent implementation of GAP has resulted in a de facto stay of new actions and proceedings, and adjournment of existing actions, including bankruptcy and winding-up petitions. 2. While monitoring the GAP situation, debtors and creditors…