Our Partners Mr. Roy Leung and Ms. Jenny Wong have been leading the litigation team of our firm since the end of 2020, representing China CITIC Bank Corporation Limited Tianjin Branch, China CITIC Bank International (China) Limited Beijing Branch, and China CITIC Bank International Limited (collectively “CITIC”) in multiple litigations before the High Court of Hong Kong involving an HK$8 billion syndicated loan and related mortgages and guarantees with tycoon Mr. Pan Sutong and his controlled company Silver Starlight Limited, including proceedings to resist injunction application and the corresponding appeal (Case Nos. HCMP222/2021 and CACV301/2021), his application to set aside statutory demand (Case No. HCSD3/2021), company winding-up petition (Case No. HCCW295/2021), and bankruptcy petition against him personally (Case No. HCB6548/2021).

Amid rounds of highly contested legal battles, our firm had already successfully obtained judgments in favour of CITIC at the High Court and Court of Appeal hearings. Subsequently, we proceeded to file bankruptcy and winding-up petitions against Pan Sutong and Silver Starlight Limited swiftly. The series of proceedings moved at a cracking pace. Even after the heard-together hearing for bankruptcy petition and winding-up petition, Pan Sutong and Silver Starlight Limited still fought relentlessly and made last-minute attempt to seek postponement for the determination of the petitions, which were all dismissed by the Honourable Madam Justice Linda Chan of the High Court. Ultimately, the Court ruled in our favour and granted bankruptcy order against Pan Sutong and winding-up order against Silver Starlight Limited on 8 July 2022.

Pan Sutong and Silver Starlight Limited subsequently appealed to the Court of Appeal against the bankruptcy order and winding-up order (Case Nos. CACV266/2022 and CACV265/2022). Additionally, Pan Sutong and Silver Starlight Limited respectively appealed to the Court of Appeal and applied for leave to appeal against the decision of the Honourable Madam Justice Linda Chan of the High Court to refuse the postponement for the determination of the petitions (Case Nos. CACV261/2022 and CAMP294/2022). Along with Pan Sutong’s earlier appeal to the Court of Appeal against the decision of Deputy High Court Judge Le Pichon to dismiss his application to set aside statutory demand (Case Number: CACV525/2021), Pan Sutong and Silver Starlight Limited have collectively lodged a total of five appeals with the Court of Appeal.

The five appeals involve different legal and factual disputes, including: (1) Whether Pan Sutong and Silver Starlight Limited are bound by the previous judgments in HCMP222/2021, CACV301/2021, and HCSD3/2021 and are precluded from re-litigating several issues by doctrine of res judicata; (2) Whether the Court should consider and admit new evidence sought to be adduced by Pan Sutong and Silver Starlight Limited in handling HCSD3/2021, HCCW295/2021, and HCB6548/2021; (3) Whether the Court should dismiss the application by Pan Sutong and Silver Starlight Limited for postponement of the determination of petitions; (4) The jurisdiction of the Hong Kong court to wind up the overseas company Silver Starlight Limited; and (5) Whether there is a bona fide dispute by Pan Sutong and Silver Starlight Limited regarding the debts in question. The issues involved in the case are intricate and intertwined. Given the complexity of the case, the Court of Appeal directed that the five appeal proceedings be heard together and dealt with at a combined hearing.

The appeal proceedings lasted for over a year. During the complex appeal process, our firm took the initiative to apply to the Court of Appeal and successfully obtained leave to adduce new evidence which strengthens CITIC’s case in opposition to the appeals made by Pan Sutong and Silver Starlight Limited. Furthermore, we advanced further protective measures to safeguard our client’s best interest. Considering the dire financial situation of Pan Sutong and Silver Starlight Limited and the apparent risk that they may not be able to bear the legal costs incurred by our client during the appeal proceedings, we applied to the Court of Appeal for security for costs from Pan Sutong and Silver Starlight Limited. We requested Pan Sutong and Silver Starlight Limited to first pay a sum of money as security for costs to the Court, or else the entire appeal proceedings would be dismissed. Our firm successfully obtained a security for costs order for the client, compelling Pan Sutong and Silver Starlight Limited to pay the security for costs to the Court before the appeal hearing.

Meanwhile, our firm collaborated closely with the counsel team, engaging in thorough communication, studying and analyzing the grounds for appeal, skeleton submissions and list of authorities of Pan Sutong and Silver Starlight Limited meticulously. The aim was to enhance our grounds for opposition, present a strong case before the Court of Appeal, and refute the appeal grounds put forward by Pan Sutong and Silver Starlight Limited. Ultimately, the Court of Appeal accepted our arguments and evidence in relation to the legal and factual disputes, upheld the decisions of lower court, and dismissed all five appeals. The summary of the judgment is as follows:

1. The Court of Appeal clearly supported the High Court Judge’s decision to reject the submission of new evidence by Pan Sutong and Silver Starlight Limited, agreeing that the so-called new evidence was “the very antithesis of credible evidence”, and was so unsubstantiated as to be insufficient to have any actual impact on the outcome of the appeal decision.

2. The Court of Appeal supported the decision of the Honourable Madam Justice Linda Chan of the High Court to refuse to postpone the determination of the petitions, believing that sufficient opportunities had been provided to Pan Sutong and Silver Starlight Limited to present their arguments and there was no breach of natural justice. The Court of Appeal considered that the relevant arguments were insufficient to have any actual impact on the outcome of the appeal decision; thus, the decision made by the Judge in exercising her discretion was unassailable.

3. With respect to the dispute on the debt in question, the Court of Appeal referred to common law precedents, asserting that in bankruptcy and winding-up cases, unless under special circumstances, litigants shall not re-argue the issue of bona fide dispute over the debt once their arguments had been dismissed by the lower court, so as to avoid wasting the court’s time and litigants’ resources. Considering that the new evidence presented by Pan Sutong and Silver Starlight Limited does not constitute special circumstances, and that the judgments in HCMP222/2021, CACV301/2021, and HCSD3/2021 have already determined that there was no bona fide dispute over the debt in question, the Court of Appeal ruled that Pan Sutong and Silver Starlight Limited are bound by the aforementioned judgments and shall not re-litigate this issue.

4. Although the Court of Appeal acknowledged that Silver Starlight Limited could re-litigate the issue of jurisdiction, the Court of Appeal adopted our submissions that even upon reconsideration, the Court of Appeal would still uphold the original ruling, affirming the jurisdiction of the Hong Kong court to wind up Silver Starlight Limited.

The Court of Appeal dismissed all five appeals. Along with two new evidence applications taken out by our firm, the Court of Appeal granted costs orders for all seven proceedings in favour of CITIC and, extraordinarily, with 3 Certificates of Counsel.

The series of cases are led by our partners Mr. Roy Leung and Ms. Jenny Wong, with the assistance of our litigation solicitors including Ms. Winnie Hui. Our firm has extensive experience in actions for recovery of substantial debts, company winding-up proceedings, and personal bankruptcy proceedings. We strive to prioritize clients, assist and support clients in proposing comprehensive legal actions, and spare no effort to safeguard clients’ interests.