Page 16 - 2017 Policy Watch
P. 16
icy Watch: The Circuit Courts of the Supreme People’s Court
CPExeiraocmpulipet l’seCsCoouourfrtstt(hcoaefsetWhs)oerkSuopfretmhee rights to inherit property from Huang Guanfang’s estate.
On September 2nd 2010, the Plaintiffs Huang Yiming and
A typical case of the First Circuit Court Su Yuedi initiated a lawsuit in the High People’s Court of
Guangdong requesting an order compelling the termination
Severable application of the laws in Hong Kong- of the Memorandum, the Equity Purchase Agreement and
related cases all their the supplementary agreements and requested
Chow Tai Fook Company, Pacific Gain Company and Baoyi
Case Brief: Company jointly compensate them for the principal and
interest of the transfer price and compensate them for their
Chow Tai Fook Nominee Limited of Hong Kong (“Chow losses. The High People’s Court of Guangdong supported
Tai Fook Company”) and Pacific Gain Development Limited part of the Plaintiffs’ claims, ordered in the first instance
of Hong Kong (“Pacific Gain Company”), and Huang the confirmation of termination of the Memorandum, the
Guanfang from Mainland China entered into an Equity Equity Purchase Agreement and all their supplementary
Purchase Agreement dated June 19th 2000 where the agreements; and Chow Tai Fook Company and Pacific
Parties agreed that Chow Tai Fook Company and Pacific Gain Company were ordered to return the funds paid by
Gain Company would transfer a 100% of the equity of Baoyi Huang Guanfang to Huang Yiming and Su Yuedi, provided,
Development Limited (“Baoyi Company”) held by them and however, the liquidated damages agreed in the contract in
the shareholders’ creditor’s rights to Huang Guanfang, in the amount of HK$25,000,000 should be deducted from
consideration for a shareholders’ loan in the total amount said repayment. Both Parties disputed the judgment of the
of HK$184.5 million. Article 27 of the Agreement specified first instance and appealed to the Supreme People’s Court,
that the Agreement shall be governed and interpreted by who issued a Civil Judgment (2015) Min Si Zhong Zi No. 9,
Hong Kong law and the Parties agreed that the courts of rejecting the appeal and sustaining the original judgment.
Hong Kong shall have exclusive jurisdiction of any disputes.
The Parties previously drafted a Memorandum on June 1st The Judgment of the First Circuit Court of the Supreme
2000, agreeing that Baoyi Company shall obtain the State- People’s Court held as follows:
owned Land Use Certificate for the land parcel involved from
the Bureau of Land and Resources of Shunde Municipality (1) as to the determination on the nature of this case
and other prerequisite conditions. Article 17.1 specified raised by Huang Yiming and Su Yuedi, the Law on Choice of
that this Memorandum shall be governed and interpreted Law for Foreign-related Civil Relationships of our country,
by Hong Kong law. Thereafter, the Parities entered into four Article 8 reads, “Lex fori shall apply to the determination
supplementary agreements successively, making revisions the nature of foreign-related civil relations.” Namely, lex
on the currency for payment, payment schedule, payment fori – the Mainland law shall apply to the determination
of interest, etc.The fourth supplementary agreement signed of the nature of this case. Determination of the nature of a
on January 25th 2002 confirmed that Huang Guanfang had case is actually determination of the cause of action. Seen
paid HK$20,000,000 and RMB93,500,000 and the interest from the content of this case as a contract dispute, it mainly
required in the Agreement in the amount of RMB4,861,217, includes the transfer of two rights, one is the transfer of all
and newly agreed to payment of the remaining balance the equity held by Chow Tai Fook Company and Pacifica
and interest. Thereafter, Huang Guanfang did not make Gain Company in Baoyi Company to Huang Guanfang,
any payments. On May 30th 2006, Chow Tai Fook Company and the other is the transfer of Chow Tai Fook Company
and Pacific Gain Company notified Huang Guanfang that and Pacifica Gain Company’s creditor’s rights in Pacific
he had seriously breached the contract and the Agreement Gain Company to Huang Guanfang. Therefore, this case is
was terminated immediately. Huang Guanfang was from essentially a contract dispute over the transfer of equity and
Shunde, Foshan. He died on 19th January 2008 in Shunde. shareholders’ creditor’s rights. According to the Provisions
He had two sons, Huang Yiming and Huang Shiming. Both of the Supreme People’s Court on the Causes of Action of
his wife Su Yuedi and his son Huang Shiming waived their
16
CPExeiraocmpulipet l’seCsCoouourfrtstt(hcoaefsetWhs)oerkSuopfretmhee rights to inherit property from Huang Guanfang’s estate.
On September 2nd 2010, the Plaintiffs Huang Yiming and
A typical case of the First Circuit Court Su Yuedi initiated a lawsuit in the High People’s Court of
Guangdong requesting an order compelling the termination
Severable application of the laws in Hong Kong- of the Memorandum, the Equity Purchase Agreement and
related cases all their the supplementary agreements and requested
Chow Tai Fook Company, Pacific Gain Company and Baoyi
Case Brief: Company jointly compensate them for the principal and
interest of the transfer price and compensate them for their
Chow Tai Fook Nominee Limited of Hong Kong (“Chow losses. The High People’s Court of Guangdong supported
Tai Fook Company”) and Pacific Gain Development Limited part of the Plaintiffs’ claims, ordered in the first instance
of Hong Kong (“Pacific Gain Company”), and Huang the confirmation of termination of the Memorandum, the
Guanfang from Mainland China entered into an Equity Equity Purchase Agreement and all their supplementary
Purchase Agreement dated June 19th 2000 where the agreements; and Chow Tai Fook Company and Pacific
Parties agreed that Chow Tai Fook Company and Pacific Gain Company were ordered to return the funds paid by
Gain Company would transfer a 100% of the equity of Baoyi Huang Guanfang to Huang Yiming and Su Yuedi, provided,
Development Limited (“Baoyi Company”) held by them and however, the liquidated damages agreed in the contract in
the shareholders’ creditor’s rights to Huang Guanfang, in the amount of HK$25,000,000 should be deducted from
consideration for a shareholders’ loan in the total amount said repayment. Both Parties disputed the judgment of the
of HK$184.5 million. Article 27 of the Agreement specified first instance and appealed to the Supreme People’s Court,
that the Agreement shall be governed and interpreted by who issued a Civil Judgment (2015) Min Si Zhong Zi No. 9,
Hong Kong law and the Parties agreed that the courts of rejecting the appeal and sustaining the original judgment.
Hong Kong shall have exclusive jurisdiction of any disputes.
The Parties previously drafted a Memorandum on June 1st The Judgment of the First Circuit Court of the Supreme
2000, agreeing that Baoyi Company shall obtain the State- People’s Court held as follows:
owned Land Use Certificate for the land parcel involved from
the Bureau of Land and Resources of Shunde Municipality (1) as to the determination on the nature of this case
and other prerequisite conditions. Article 17.1 specified raised by Huang Yiming and Su Yuedi, the Law on Choice of
that this Memorandum shall be governed and interpreted Law for Foreign-related Civil Relationships of our country,
by Hong Kong law. Thereafter, the Parities entered into four Article 8 reads, “Lex fori shall apply to the determination
supplementary agreements successively, making revisions the nature of foreign-related civil relations.” Namely, lex
on the currency for payment, payment schedule, payment fori – the Mainland law shall apply to the determination
of interest, etc.The fourth supplementary agreement signed of the nature of this case. Determination of the nature of a
on January 25th 2002 confirmed that Huang Guanfang had case is actually determination of the cause of action. Seen
paid HK$20,000,000 and RMB93,500,000 and the interest from the content of this case as a contract dispute, it mainly
required in the Agreement in the amount of RMB4,861,217, includes the transfer of two rights, one is the transfer of all
and newly agreed to payment of the remaining balance the equity held by Chow Tai Fook Company and Pacifica
and interest. Thereafter, Huang Guanfang did not make Gain Company in Baoyi Company to Huang Guanfang,
any payments. On May 30th 2006, Chow Tai Fook Company and the other is the transfer of Chow Tai Fook Company
and Pacific Gain Company notified Huang Guanfang that and Pacifica Gain Company’s creditor’s rights in Pacific
he had seriously breached the contract and the Agreement Gain Company to Huang Guanfang. Therefore, this case is
was terminated immediately. Huang Guanfang was from essentially a contract dispute over the transfer of equity and
Shunde, Foshan. He died on 19th January 2008 in Shunde. shareholders’ creditor’s rights. According to the Provisions
He had two sons, Huang Yiming and Huang Shiming. Both of the Supreme People’s Court on the Causes of Action of
his wife Su Yuedi and his son Huang Shiming waived their
16
