DP WORLD DJIBOUTI FZCO AND OTHERS v. CHINA MERCHANTS PORT HOLDINGS CO LTD

HCA 1951/2018

[2025] HKCFI 6320

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1951 OF 2018

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BETWEEN

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D E C I S I O N

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Introduction

1.  This is an action brought by the three Plaintiffs against the Defendant (“CMPH/Defendant”), claiming that CMPH had procured the breach by the Djibouti Republic of the exclusive rights of the 2^nd Plaintiff (“DID”) and of the 3^rd Plaintiff (“DCT”) to operate and manage the ports in Djibouti pursuant to their concession agreements made with the Republic of Djibouti.

2.  By its summons issued on 28 February 2023, the Defendant seeks to strike out the claims made by DCT, on the ground that it no longer has the legal capacity to continue or pursue the action which had initially been commenced by lawyers instructed by DCT’s board of directors, whose powers have now been ousted and replaced by officials appointed by the Djibouti Court, and as a result of DCT having ultimately been dissolved by order of the Djibouti Court.

3.  The dispute between the parties has now centered on 3 summonses which are before the Court (“Summonses”):

(1) CMPH’s summons dated 28 February 2023 (amended on 16 April 2024) (“Authority Summons”) for:

i. an order that the name of DCT as the 3^rd Plaintiff and its claims in these proceedings be struck out, on the ground that these proceedings were brought or continued without proper authority; or

ii. alternatively, an order that there be a trial of preliminary issue on whether DCT’s action was issued and the subsequent proceedings were conducted by Deacons with the proper authority of DCT (“Authority Issue”), and a stay of these proceedings pending the trial of preliminary issue.

(2) DCT’s summons[1] dated 25 July 2023 for an anti-suit injunction against CMPH (“1^st ASI Summons”):

i. restraining CMPH from taking steps to pursue the proceedings commenced by CMPH against the Plaintiffs (“1^st Djibouti Action”) by way of the “Summons to Appear before the President of the Court of First Instance of Djibouti” dated 12 July 2023 (“Djibouti Summons”) in the Court of First Instance of Djibouti (“Djibouti CFI”);

ii. restraining CMPH from commencing any other legal proceedings in respect of the Authority Issue; and

iii. ordering CMPH to withdraw the Djibouti Summons.

(3) DCT’s summons dated 24 November 2023 (“2^nd ASI Summons”) seeking anti-suit relief against CMPH:

i. restraining CMPH from taking any steps in the proceedings commenced by CMPH in the Djibouti CFI by way of the “Writ of Summons for Proceedings on the Merits” in case no 212/23 (“2^nd Djibouti Action”) pending the final determination of these proceedings; and

ii. ordering CMPH to apply to the Djibouti CFI to withdraw (or stay pending the determination of these proceedings) the 2^nd Djibouti Action.

4.  The hearings of these summonses were adjourned several times, for reasons explained below. Eventually, substantive submissions were made by the parties and heard on 4, 6 and 7 August 2025. I reserved my judgment at the conclusion of the hearing, and this is my decision.

Background

5.  The background facts are not in dispute and have been set out in my judgment dated 20 December 2019 on CMPH’s application to stay this action on the ground of forum non conveniens (“Stay Decision”). The parties have helpfully produced an Agreed Chronology. These background facts will not be further repeated here. Those material to this decision will only be summarised below, adoping the definitions used in the Stay Decision and the Agreed Chronology.

6.  Given the numerous intertwining applications and foreign proceedings, the narrative below does not necessarily set out the events in chronological order. All definitions adopted herein are for convenience only and without prejudice to the parties’ arguments.

Articles Proceedings

7.  On 20 September 2018, the Republic commenced proceedings in the Djibouti Court seeking to: (i) invalidate certain provisions in DCT’s Articles relating to the voting rights of directors and shareholders and the constitution of the board; and (ii) annul the 18 February 2018 Resolution (pursuant to which the Termination Arbitration and this Action were commenced) (“18 February 2018 Resolution”), on the ground that they were contrary to Djibouti public policy (“Articles Proceedings”).

8.  On 23 October 2018, DPWD intervened in the Articles Proceedings and objected to the Djibouti CFI’s jurisdiction over the dispute.

9.  On 29 January 2019, the Djibouti CFI allowed DPWD’s intervention but dismissed DPWD’s jurisdiction objection, deciding that the proceedings should proceed on the merits.

10.  On 28 February 2019, DPWD appealed to the Djibouti Court of Appeal (“Djibouti CA”) in respect of its jurisdiction challenge in the Articles Proceedings. This appeal was dismissed by the Djibouti CA on 22 May 2019.

11.  On 2 October 2022, DPWD’s further appeal from the Djibouti CA Decision to the Djibouti Supreme Court was dismissed.

12.  Pending decision by the Djibouti Supreme Court on DPWD’s jurisdictional challenge, the hearing on the merits of the Articles Proceedings proceeded.

13.  On 31 December 2019, the Djibouti CFI held, inter alia, that Article 42A of DCT’s Articles was null and void on the ground of public policy, and that the 18 February 2018 Resolution was also null, since they amount to performance of an unlawful agreement, being the invalidated articles (“Djibouti CFI Articles Judgment”). In the Djibouti CFI Articles Judgment, it was held, inter alia, that:

(1) The articles concerning the composition of DCT’s board should be invalidated;

(2) The articles concerning the removal of directors, the appointment / removal of the chairman, the appointment of the CEO and directors, and provisions governing the directors’ and shareholders’ voting rights (ie Articles 21.5, 42A[2]) were contrary to the mandatory provisions of the Djibouti Commercial Code, and should be “deemed unwritten”; and

(3) The 18 February 2018 Resolution, which authorized the commencement of the Articles Arbitration and the present Action, was declared null and void since the passing of this resolution amounted to performance of an unlawful agreement (ie the invalidated articles).

14.  On 11 October 2023, the Djibouti CA upheld the Djibouti CFI’s decision on the merits in the Articles Proceedings (“Djibouti CA Articles Judgment”). The Djibouti CA declared that DPDW’s appeal was lodged “out of time”, upheld the Djibouti CFI Articles Judgment, and dismissed the “unfounded grounds” of appeal raised by DPDW. The Plaintiffs contend that there was no reasoning, in this 2-page judgment, as to why or how DPDW’s grounds of appeal were “unfounded”.

15.  On 20 December 2023, DPWD lodged an appeal to the Djibouti Supreme Court against Djibouti CA’s decision dated 11 October 2023. As at the date of the hearing before this Court in August 2025, the Djibouti Supreme Court had not handed down its decision on the appeal.

Administrator Proceedings

16.  On 26 September 2018, the Republic applied under an “emergency procedure” to the Djibouti CFI for the appointment of a provisional administrator for DCT. This application was made without notice to DCT or DPWD, its shareholder (“Administrator Proceedings”). On the next day, the Djibouti CFI granted an ex parte order appointing Ms Chantal Tadoral as the provisional administrator of DCT (“Administrator”), on the ground that there were conflicts between the shareholders (ie PDSA and DPWD) that would hinder DCT’s effective operation (“Appointment Order”). The Administrator was to replace DCT’s board until the “crisis” between the shareholders was resolved.

17.  On 4 October 2018, DCT’s board lodged a challenge to the appointment of the Administrator before the Djibouti CFI. This challenge was dismissed by the Djibouti CFI on 15 November 2018.

18.  DCT’s board appealed against the Djibouti CFI’s decision on 21 November 2018. The appeal was heard by the Djibouti CA on 17 December 2018, and dismissed on 3 January 2019,

19.  On the same day, DCT further appealed to the Djibouti Supreme Court. Also on the same day, the Administrator’s Stay Application[3] in the Rescission Arbitration was dismissed on the grounds that (i) the arbitration had proceeded without challenge from the Republic or the Administrator, and (ii) no further participation by either side was required before the tribunal delivers its award.

20.  On 8 September 2019, DCT’s appeal to the Djibouti Supreme Court was dismissed by the Preliminary Examination Division, on the basis that the pleadings therein were filed out of time. There was no consideration of the merits of the appeal.

21.  On 14 October 2019, DCT’s board applied to reopen the proceedings before the Plenary Assembly of the Djibouti Supreme Court, for the Assembly to review the decision of 8 September 2019. Such application was dismissed on 27 February 2020.

22.  On 3 June 2020, DPWD commenced fresh proceedings in the Djibouti CFI to challenge the appointment of the Administrator on the merits (“New Administrator Proceedings”).

23.  In the meantime, the Administrator indicated her opposition to the DPWD-nominated Directors’ representation of DCT in the pursuit of these proceedings. By letter dated 26 August 2020 (“26 Aug 2020 Letter”), the Administrator wrote to CMPH’s former solicitors, Baker & McKenzie, stating that none of the directors of DCT’s board (including Albanna) and the purported legal representatives of DCT (including Deacons) was authorized to represent or to give instructions on behalf of DCT in this Action, nor had any approval been sought from the Administrator. The Administrator stated, however, that since it was not her task to make any decisions which might give rise to considerable costs being incurred by DCT and which might be assimilated to a “disposal”, she was of the opinion that her intervention in the ongoing proceedings in Hong Kong was not desirable.

24.  On 23 February 2022, the Djibouti CFI dismissed DPWD’s challenge in the New Administrator Proceedings. DPWD appealed, and the Republic cross-appealed, to the Djibouti CA.

25.  On 19 March 2025, more than 3 years later, the Djibouti CA handed down its judgment dismissing DPWD’s appeal in the New Administrator Proceedings. The reasoned decision was handed down on 3 April 2025. On 2 April 2025, DPWD filed an appeal to the Djibouti Supreme Court against the Djibouti CA’s decision of 19 March 2025.

Authority Summons

26.  On 28 February 2023, CMPH took out the Authority Summons. In essence, CMPH challenges the authority of Deacons to act for DCT in the present Action, on the basis that DCT had been placed in provisional administration by the Djibouti Court, and that accordingly, the board of DCT (who instructed Deacons in this Action) had been displaced by the Administrator.

1^st Djibouti Action and 1^st ASI Summons

27.  The procedural history in the paragraphs below are relevant to the 1^st and 2^nd ASI.

28.  On 31 May 2023, Albanna (on behalf of DPWD) gave notice (“1^st EGM Notice”) to PDSA (as shareholder) of an EGM of DCT scheduled for 22 June 2023 (“Initial EGM”). The stated purposes of the EGM was to pass a shareholders’ resolution to confirm the appointment and continuation of Deacons as DCT’s legal representative in this Action (“Proposed Resolution”).

29.  On 22 June 2023, the Initial EGM took place. PDSA was absent. It is CMPH’s contention that the Initial EGM was inquorate. In any event, no resolution was passed at the Initial EGM.

30.  On 23 June 2023, DPWD sent to PDSA a further notice (“2^nd EGM Notice”) of an EGM of DCT scheduled for 17 July 2023 (“Reconvened EGM”), for the purposes of passing the Proposed Resolution.

31.  It is CMPH’s case that it only became aware of the 1^st EGM Notice in early June 2023, and of the 2^nd EGM notice in late June 2023.

32.  On 12 July 2023, CMPH applied without notice to the Djibouti Court for interim relief against DPWD, the DPWD-nominated Directors, and DCT in the 1^st Djibouti Action. This was by way of the Djibouti Summons. It is CMPH’s case that the attempt to convene the Initial EGM and the Reconvened EGM and to pass the Purported Resolution constituted the tort of manifestly unlawful disturbance under Djibouti law. By the Djibouti Summons, CMPH sought interim measures requiring the DPWD-nominated Directors to, inter alia, immediately cease representing DCT and giving further instructions to Deacons. CMPH further sought measures restraining DPWD from relying upon any resolution purportedly passed to confirm or ratify Deacons’ authority to sue in this Action. The Djibouti Summons was returnable the next day, on 13 July 2023 at 10am, which required the respondents therein (ie DPWD and the DPWD-nominated Directors) to appear before the Djibouti CFI.

33.  According to CMPH, service on a respondent outside jurisdiction is effected through the Public Prosecutor’s office (“Office”) under Djibouti law. On CMPH’s case, due service was effected on 12 July 2023, once the writ had been served on the Office. However, the Plaintiffs dispute that there was due service of the Djibouti Summons.

34.  On 13 July 2023, the Djibouti CFI held its first hearing of the Djibouti Summons. DPWD and the DPWD-nominated Directors did not attend the hearing.

35.  On 16 July 2023 (ie 1 day before the Reconvened EGM), Albanna received an email from a Ms Mariam Burton of a Djibouti law firm representing CMPH Cabinet Avocats & Associes ABAYAZID et ABDOURAHMAN (“CAA”), which was stated to be only “for information purposes”, and which attached the Djibouti Summons. The sending and receipt of this email is undisputed.

36.  On 17 July 2023, the Reconvened EGM took place in the absence of PDSA, at which the Proposed Resolution was passed.

37.  On 25 July 2023, the Plaintiffs took out the 1^st ASI Summons in this action, to restrain the continuation of the Djibouti Summons.

38.  On 28 July 2023, DHCJ MK Liu granted an interim-interim injunction in these proceedings, restraining CMPH from (i) taking any steps to pursue and/or prosecute the proceedings commenced by the Djibouti Summons and (ii) commencing any other legal proceedings (in Djibouti or elsewhere), in respect of the issue of whether the proceedings herein were instituted without the authority of DCT (“28 July HK Order”).

39.  In the interim, the Djibouti Summons had been adjourned to 27 July 2023. On 31 July 2023, the Djibouti CFI granted an order in the absence of any of the Defendants, allowing the claims in the Djibouti Summons. These included an order that the DPWD-nominated Directors should cease to represent DCT in this Action, and should cease to give further instructions to Deacons and other law firms on behalf of DCT (“Djibouti Interim Decision”).

40.  It is common ground between the parties that the 1^st ASI Summons has been rendered academic as a result of the Djibouti Interim Decision. Paragraphs 1(1)(i) and 1(2) of the 1^st ASI Summons are rendered unnecessary as the 1^st Djibouti Action had come to an end. Paragraph 1(1)(iii) had been subsumed and overtaken by the 2^nd ASI Summons as a result of the commencement of the 2^nd Djibouti Action. The only outstanding issue concerning the 1^st ASI Summons is on costs.

2^nd Djibouti Action and 2^nd ASI Summons

41.  On 19 July 2023, CMPH instructed its Djibouti lawyer, Mr Mohamed Abayazid (“Abayazid”) of CAA, to prepare for the commencement of the 2^nd Djibouti Action. According to CMPH, the 2^nd Djibouti Action was a protective writ to preserve the claim for damages which did not form part of the interim measures sought in the Djibouti Summons, and which might otherwise have become time-barred under Djibouti law. On CMPH’s case, the Djibouti Summons could not encompass a request for compensation against DCT, DPWD, and the DPWD-nominated Directors.

42.  On 27 July 2023, CMPH instructed a bailiff (“Bailiff”) to commence the 2^nd Djibouti Action. On CMPH”s case (which is disputed by the Plaintiffs), this was done by arranging for service of the proceedings on the defendants (ie DCT, DPWD, and the DPWD-nominated Directors) and for filing of the papers with the Court Registry thereafter. The commencement date of the 2^nd Djibouti Action is disputed.

43.  According to CMPH, the 28 July HK Order was only brought to CAA’s attention on 29 July 2023, and CAA had refrained from taking any further steps in the 2^nd Djibouti Action.

44.  On 1 August 2023, the Writ of Summons for the 2^nd Djibouti Action was filed by the Bailiff with the Djibouti Court’s Registry. The Plaintiffs contend that the 2^nd Djibouti Action commenced on this date was in breach of the 28 July HK Order.

45.  On 4 August 2023, DHCJ MK Liu ordered continuation of the 28 July HK Order until the final determination of the 1^st ASI Summons or until further order of the Court.

46.  On 19 September 2023, the first hearing of the 2^nd Djibouti Action took place. CMPH did not attend the hearing. According to DPWD, its attorney discovered the 2^nd Djibouti Action from the docket of the Djibouti CFI.

47.  On 21 September 2023, Deacons wrote to Reed Smith Richards Butler LLP (“RSRB”) with reference to the 2^nd Djibouti Action, stating that they had reason to believe that CMPH had acted in breach of the 28 July HK Order and requested more information relating to the 2^nd Djibouti Action. On 28 September 2023, RSRB wrote to Deacons in reply, denying that CMPH was in breach of the 28 July HK Order.

48.  On 24 October 2023, Deacons wrote to RSRB reiterating that CMPH was in breach of the 28 July HK Order and stating that their clients intend to apply for leave to amend the 1^st ASI Summons in light of the developments (such that the injunction captures both 1^st and 2^nd Djibouti Actions). On 20 November 2023, RSRB provided a substantive response to Deacons’ letter dated 24 October 2023, denying breach of 28 July HK Order or that it had provided false or misleading evidence.

49.  On 24 November 2023, DPWD and DCT applied for the 2^nd ASI Summons, a further anti-suit injunction against CMPH, inter alia, restraining it from pursuing the 2^nd Djibouti Action and compelling it to withdraw or apply for a stay of the same.

50.  On 1 December 2023, at the first hearing of the 2^nd ASI Summons before Recorder Eugene Fung SC, CMPH gave an undertaking to the effect that it shall forthwith apply to the Djibouti CFI for a stay of the 2^nd Djibouti Action and, should the stay be refused, it shall not rely on or refer to any judgment of the Djibouti Court arising from the 2^nd Djibouti Action for the purpose of the hearing on 16 and 17 April 2024 before this Court (“Undertaking”). Accordingly, no interim-interim injunction was granted.

51.  On 5 December 2023, CAA orally applied to the Djibouti CFI for a stay of the 2^nd Djibouti Action.

52.  On 30 April 2024, the President of the Civil Chamber of the Djibouti CFI orally requested CMPH’s application for stay of the 2^nd Djibouti Action to be made in writing. Such a written request was made by CMPH on 7 May 2024, through its counsel in Djibouti.

53.  Eventually on 16 May 2024, CAA received a copy of the decision from the Djibouti CFI dated 14 May 2024 granting the stay application made on 5 December 2023. It is not clear why it took almost half a year for the Djibouti Court to indicate its request for stay to be made in writing and for the stay to be granted, while the Djibouti Dissolution Proceedings (defined below) was underway.

Djibouti Dissolution Proceedings

54.  The history set out below is relevant to the Authority Summons.

55.  On 16 October 2023, the Administrator (on behalf of DCT) issued a summons against DPWD and the Republic, returnable before the Djibouti CFI on 20 December 2023, seeking a declaration that DCT be dissolved and a liquidator be appointed (“Dissolution Proceedings”). The Plaintiffs disagree that the Administrator was acting on behalf of DCT. They also claim that neither DCT's directors nor controlling shareholder (DPWD) were served with or notified of the hearing of the summons for the Dissolution.

56.  On 20 December 2023, at the hearing of the Djibouti Dissolution Proceedings, the Djibouti CFI delivered an oral judgment declaring the dissolution of DCT and appointing Mr Youssouf Omar Youssouf (“Liquidator”) as the liquidator of DCT (“Djibouti Dissolution Judgment”). The Plaintiffs claim that they were not represented at the hearing.

57.  On CMPH’s case, the Djibouti Dissolution Judgment was served on and transmitted to DPWD via transmission from the Djibouti Ministry of Justice to Mr Sajid of the Ministry of Foreign Affairs of UAE via the Djibouti Ministry of Foreign Affairs and the Djibouti Embassy in Abu Dhabi, UAE (“Djibouti Embassy”) between 27 December 2023 to 30 January 2024. The parties dispute the effective date of service of the Djibouti Dissolution Judgment on DPWD, and whether Mr Sajid (who signed to acknowledge service of the Judgment) was indeed a representative of the Ministry of Foreign Affairs of UAE.

58.  On 28 March 2024, the Registry of Court of Appeal issued a Certificate of Non-Appeal (“Certificate of Non-Appeal”) confirming that the Djibouti Dissolution Judgment was served on DPWD on 27 December 2023, and certifying that no appeal was lodged by DPWD within time pursuant to the Djibouti Civil Procedure Code. On the same day, the Djibouti Dissolution Judgment was re-issued in an enforceable form (grosse exécutoire).

59.  On 5 April 2024 and 14 April 2024, notice of DCT’s dissolution and the appointment of the Liquidator was published in La Nation, Djibouti’s legal gazette, and in DCT’s records maintained with the Djiboutian Registry of Commerce respectively.

60.  On 24 April 2024, DPWD brought an appeal against the dissolution before the Djibouti CA (“Djibouti Dissolution Appeal”).

61.  Hearings of the Djibouti Dissolution Appeal took place on 22 May 2024, 16 June 2024, 18 September 2024, 16 October 2024, 20 November 2024, 22 January 2025, 5 February 2025 and 26 February 2025.

(1) At the hearing on 16 June 2024, the Dissolution Appeal was adjourned to 18 September 2024 for “contradictoire” (to allow time for parties and their local counsel to be properly constituted).

(2) DCT and the Republic filed submissions on 18 September 2024 and 13 October 2024 respectively.

(3) On 15 October 2024, Lamisse Mohamed Saïd was appointed as the Public Prosecutor (“Public Prosecutor”) in office before the Djibouti CA.

(4) On 16 October 2024, the hearing was adjourned for submissions from DPWD.

(5) On 20 November 2024, DCT (acting through the Administrator) filed additional submissions. The hearing was adjourned to 11 December 2024 for reply submissions.

(6) On 11 December 2024, DPWD filed written submissions. The Republic and DCT stated that they did not intend to file additional submissions and Djibouti CA decided to “close” the proceedings and to deliver its judgment on 15 January 2025.

(7) On 18 December 2024, DPWD sent a letter to the Djibouti CA objecting to the procedural order made on 11 December 2024 and seeking an oral hearing.

(8) On 15 January 2025, Me Camille Kamil (DPWD’s Djibouti lawyer) (“Kamil”) did not file any submission for DPWD but requested an adjournment, referring to the letter dated 18 December 2024. The Djibouti CA reopened the proceedings under the Djibouti Dissolution Appeal and adjourned the case to a hearing on 22 January 2025.

(9) On 22 January 2025, the Djibouti CA reconvened and ordered oral submissions to be made by Kamil for DPWD. He objected and stated that he had no instructions to deliver oral arguments. The Djibouti CA “closed” the proceedings and stated it would deliver its judgment on 5 February 2025.

(10) On 5 February 2025, the Djibouti CA reconvened and reopened the case to allow the Public Prosecutor to intervene and make submissions.

(11) On 12 February 2025, the Public Prosecutor filed submissions. The Public Prosecutor’s submissions included submissions on service and adopted 27 December 2023 as the date of service of the Djibouti Dissolution Judgment. Kamil of DPWD asked for an adjournment to file reply submissions for DPWD which was granted.

(12) On 19 February 2025, DPWD filed submissions in reply to the Public Prosecutor’s submissions and requested an adjournment for one month. The Djibouti CA adjourned the case to 26 February 2025.

(13) On 24 February 2025, the Public Prosecutor submitted an “Exhibits List” to the Djibouti CA (without accompanying submissions). The “Exhibits List” constitute further evidence submitted by the Public Prosecutor containing, inter alia, letters from the Djibouti Embassy to the UAE Ministry of Foreign Affairs and from the Djibouti Embassy to the Djibouti Ministry of Foreign Affairs.

(14) According to the Plaintiffs, on 25 February 2025, Kamil received the docket which showed that the hearing of the Djibouti Dissolution Appeal scheduled for the next day was for written and possibly oral submissions, and not for decision.

62.  The parties disagree as to what happened at the hearing on 26 February 2025. CMPH's case is based on what it had been informed by third parties in Djibouti, and the Plaintiffs maintain that only they had first hand information on the events of the Djibouti proceedings, as DPWD was the actual party involved.

(1) CMPH’s case is that Kamil presented oral arguments before the Djibouti CA. The Public Prosecutor only referred to his oral submissions. Kamil did not request for any further adjournment to deal with the “Exhibits List” and the alleged new evidence filed by the Public Prosecutor. The Djibouti CA then withdrew for deliberation and thereafter, handed down its decision, dismissing DPWD”s appeal against the Djibouti Dissolution Judgment.

(2) The Plaintiffs’ case is that Kamil opposed the way the Djibouti CA had managed the proceedings since 11 December 2024. No adversarial debate took place on the “Exhibits List” submitted by the Public Prosecutor. The Republic and DCT (acting through the Administrator) did not attend the hearing. The Public Prosecutor only referred to his written submissions which pre-dated the “Exhibits List”.

63.  On 27 February 2025, the full judgment of the Djibouti Dissolution Appeal (“Djibouti CA Dissolution Judgment”) was made available. The Djibouti CA declared the appeal to be inadmissible for being out of time. It considered that the Djibouti Dissolution Judgment was served on 23 January 2024, and that the Djibouti Dissolution Appeal filed on 24 April 2024 was more than 3 months from such service.

Hearing of the Amended Authority Summons, 1^st ASI Summons and 2^nd ASI Summons

64.  On 11 March 2024, following the Djibouti Dissolution Judgment dated 20 December 2023, CMPH applied to amend the Authority Summons to include the further ground that DCT’s board had been displaced by the Liquidator (“Amended Authority Summons”). At the hearing of the Amended Authority Summons, 1^st ASI Summons and 2^nd ASI Summons (“Summonses”) on 16 April 2024, I allowed the amendment application and directed that parties may adduce evidence concerning the new ground. I also adjourned the hearing of the Summonses to a date to be fixed. The adjourned hearing was subsequently rescheduled for 3 March 2025.

65.  Given that the Djibouti CA Dissolution Judgment was only handed down shortly before the adjourned hearing on 3 March 2025, and the parties considered that the outcome and the manner of handling of the Djibouti Dissolution Appeal was relevant to the Summonses before this Court, both parties sought leave to adduce additional evidence. In the end, this Court further adjourned the hearing of the Summonses, and granted leave for the following affidavits to be filed:

(1) the 8^th Affidavit of Isabelle Michou (“Michou 8”), for DPWD and DCT;

(2) the affidavit of Aurelie Lopez (“Lopez 1”) and the 7^th affirmation of Mohamed Abayazid (“Abayazid 7”), for CMPH;

(3) the 9^th affidavit of Isabelle Michou (“Michou 9”), for DPWD and DCT;

(4) the 2^nd affidavit of Aurelie Lopez (“Lopez 2”), the 8^th affirmation of Mohamed Abayazid (“Abayazid 8”) and the 9^th expert opinion of Mrs Fatouma Mahamoud (“Fatouma 9”), for CMPH.

Submissions

66.  Both parties agree that the Amended Authority Summons should be heard first, before the ASI Summonses. If the Court decides in favour of CMPH on the Amended Authority Summons, the ASI Summonses might become academic.

67.  On the Amended Authority Summons, it is CMPH’s case that any one of the following 3 grounds would be sufficient to strike out the Plaintiffs’ claims on the ground of want of authority:

(1) The 18 February 2018 Resolution has been declared null and void by the judgment of the Djibouti Court in the Articles Proceedings (“Resolution Nullity Ground”). The Djibouti CA Articles Judgment is effective and enforceable. There is no dispute by the Plaintiffs that there is no stay of the Djibouti CA Articles Judgment, notwithstanding the further appeal to the Djibouti Supreme Court;

(2) Upon the appointment of the Administrator over DCT by the Appointment Order dated 27 September 2018, the authority of the DPWD-nominated Directors to act on behalf of DCT in the present Action has been divested, and therefore Deacons’ authority to act on behalf of DCT was automatically terminated (“Administrator Ground”); and/or

(3) By the Dissolution Judgment dated 20 December 2023, DCT was dissolved and the Liquidator was appointed. This confirmed that the DPWD-nominated Directors (and Deacons who act on the instructions of the DPWD-nominated Directors) have no authority to act on behalf of DCT (“Dissolution Ground”).

68.  The Plaintiffs’ response is as follows:

(1) On the Resolution Nullity Ground: The Djibouti CFI Articles Judgment and the Djibouti CA Articles Judgment are not binding on this Court and do not preclude this Court from finding that the 18 February 2018 Resolution was valid. The Djibouti CFI Articles Judgment and the Djibouti CA Articles Judgment are plainly wrong.

(2) On the Administrator Ground: The Appointment Order should not be recognized on the grounds that it is contrary to the public policy of Hong Kong and against principles of natural justice. Even if recognition is given to the Appointment Order, the appointment of the Administrator in and of itself does not put an end to Deacons’ authority to represent DCT, given that the Administrator has taken no action to intervene in these proceedings. In any event, the authority of Deacons was confirmed by the Proposed Resolution passed on 17 July 2023 at the Reconvened EGM (“July 2023 Resolution”).

(3) On the Dissolution Ground: The Djibouti Dissolution Judgment was suspended pending appeal,[4] and in any event, should not be recognized on the grounds that it is contrary to the public policy of Hong Kong and against principles of natural justice. Further, even if recognition of the Djibouti Dissolution Judgment is given by this Court, the dissolution of DCT does not in and of itself put an end to Deacons’ authority to represent DCT given that no liquidator appears to be actively attempting to exercise control over DCT and/or to intervene in these proceedings.

69.  As a result of the adjournment caused by the Djibouti CA Dissolution Judgment, the parties have filed further submissions, which supplemented their respective positions on the Dissolution Ground.

(1) The Plaintiffs’ primary argument is that, the Djibouti CA Dissolution Judgment was based on the new evidence filed by the Public Prosecutor just two days prior to the hearing before the Djibouti CA, the Plaintiffs did not have the opportunity to address the new evidence, and the Djibouti CA Dissolution Judgment was rendered in highly irregular and unusual circumstances, such that the decision made by the Djibouti CA, that the Djibouti Dissolution Appeal was “inadmissible” for being out of time, was wholly without basis and was perverse. Therefore, this Court should not give recognition to the Djibouti CA Dissolution Judgment, as it involved breaches of the principles of natural justice and there is evidence of bias and/or lack of good faith on the part of the Djibouti CA.

(2) On CMPH’s part, it was submitted that there is no ground to impeach the Djibouti CA Dissolution Judgment. DPWD had been given sufficient opportunity to present its case, including on whether the appeal was out of time. The significance of the new “Exhibits List” was overplayed and DPWD did not seek any adjournment to deal with it. DPWD also failed to exhaust the available remedy of appealing to the Djibouti Supreme Court, and therefore cannot complain about breach of natural justice.

Applicable legal principles

70.  All the 3 grounds relied upon by CMPH in support of its Amended Authority Summons involve the question of whether the Hong Kong Court should recognize the judgments of the Djibouti Courts issued in the Articles Proceedings, the Administrator Proceedings and the Dissolution Proceedings. In summary, CMPH contends that if the Hong Kong Court gives recognition to any of these judgments, it would mean that DCT and Deacons can no longer pursue DCT’s claims in the action for want of authority.

71.  The applicable legal principles in this regard are not in serious dispute between the parties. As summarized by Counsel for the Plaintiffs, they are:

(1) While a foreign judgment may not be impeached in Hong Kong on merits, it may be impeached if:

(i) it offends against the Hong Kong Court’s views of “substantial justice”, such as where the proceedings in which the judgment was obtained were opposed to “natural justice” (Qu Jian Qin v Hu Jing[2020] HKCFI 2788 at para 21; Dicey, Morris & Collins on the Conflict of Laws (16^th Edition), para 14-R-158, 14-159); or

(ii) it is “so wrong as to be evidence of bias, or [is] such that no court acting in good faith could have arrived at it”: Maximov v Open Joint Stock Co ‘Novolipetsky Metallurgichesky Kombinat’ [2017] 2 CLC 121, at para 15.

(2) These principles apply to judgments inpersonam as much as they apply to judgments in rem. It is important to appreciate that “choice of law” is a separate question from “recognition of foreign judgments”. Thus, even where a person’s status is derived from a foreign judgment (applying foreign law), the English Court applies its rule on recognition of foreign judgments to determine whether that status should be recognized, and does not simply accept without more the position under the relevant foreign law: see Koza Ltd v Koza Altin IsletmeleriAS [2022] EWCA Civ 1284 at para 59,139, 140, 144.

(3) While considerations of international comity will militate against any finding that a foreign court or foreign court system is corrupt or lacking in independence in the absence of cogent evidence, the true position is that there is no rule that the English Court will not examine questions of this nature: see Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Limited [2012] 1 WLR 1804 at para 101.

72.  The Plaintiffs have further made reference to various authorities to illustrate the meaning of “natural justice” (or “substantial justice”). These are:

(1) As explained by Atkins LJ in Jacobson v Frachon (1927) 138 LT 386, at 392, natural justice encompasses two key requirements, namely (i) notice is given to the litigant that the court is about to proceed to determine the rights between him and the other litigant and (ii) having given him that notice, the litigant is afforded an opportunity of substantially presenting his case before the court.

(2) In Adams v Cape Industries Plc [1990] 1 Ch 433 the English Court of Appeal clarified that the defence of breach of natural justice is not restricted to the two situations identified by Atkins LJ. The Court referred to the test stated by Lindley MR in Pemberton v Hughes [1899] 1 Ch 781, 790, and explained the key question as being “whether the procedural defect alleged by [the party resisting enforcement of the foreign judgment] was such as to constitute a breach of an English court’s views of substantial justice”.

(3) Where there is evidence of a “perverse” refusal by the foreign court to apply the law in a judicial manner, it may be possible to oppose recognition on the ground that the behavior of the court infringed natural justice: see OJSC Bank of Moscow v Chernyakov [2016] EWHC 2583 (Comm) at para 7.

73.  In the context of the present case which involves an application to strike out for want of authority to sue, relevant principles are also set out in Kammy Town Limited v Super Glory Corporation Limited HCA 3524/2003, 14 January 2005 (at paras 9 to 22). They are summarized by Counsel for CMPH as follows:

(1) A point on lack of authority must be taken out by a defendant at the earliest opportunity.

(2) The burden lies with those suing in the name of the plaintiff to prove authorization.

(3) The authority issue cannot be raised by way of defence at trial. It must be definitively determined at the outset. The matter should not be left to be determined at trial together with the substantive issues between the parties, since the determination of the latter would become a total waste of time and resources if the point on lack of authority is upheld.

(4) The “plain and obvious” requirement does not apply to striking out on the basis of lack of authority to sue.

(5) A court faced with an application for striking out on the ground of want of authority to sue can either (a) decide the issue summarily on affidavit; or (b) particularly where there are serious factual disputes, adjourn the application to a trial of preliminary issue.

74.  On behalf of CMPH, Counsel has further highlighted the relevant principles concerning the constitution and internal management of a company. Of pertinence, all matters concerning the constitution of a corporation are governed by the law of the place of incorporation: Dicey, Morris & Collins on The Conflict of Laws (16^th edition) para 30R-020. As pointed out in the Stay Decision (at paras 102-103) the English courts have been reluctant to intervene in domestic issues between members of a foreign corporation: Dicey para 30-029; Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] AC 853, 919G, 939A, 972E; Re China Properties Group Limited (HCCW 67/2022, 29.2.2024) para 28.

75.  The arguments made by Counsel for the Plaintiffs in this case against the judgments of the Djibouti Courts are premised also on the fact that the prior judgments of another court are not admissible as evidence of facts or conclusions found between different parties (Secretary of State for Trade & Industry v Bairstow [2004] Ch 1 (at paras 26-27); Capital Century v Li Dianxiao[2018] HKCFI 729 at para 23). For res judicata to apply, any prior judicial decision relied on must: (1) be pronounced by a tribunal which has jurisdiction over the parties and the subject matter; (2) be final and on the merits; (3) determine a question raised in the later litigation; and (4) involve the same parties or their privies, or is a decision in rem (Re Yip Lim Po [2022] 3 HKLRD 356).

76.  Counsel for the Plaintiffs further rely on the rule originated from Hollington v F Hewthorn Co Ltd [1943] KB 587, that the finding of a previous court is only a form of opinion, and that such opinion evidence is irrelevant for any other decision of another court. Counsel referred to the observations made by Christopher Clarke LJ in Roger v Hoyle [2015] QB 265 (at paras 39-40):

“39. As the judge rightly recognized the foundation on which the rule must now rest is that findings of fact made by another decision-maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (“the trial judge”), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision-maker nor an expert in any relevant discipline, of which decision-making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard.

40. In essence, as the judge rightly said, the foundation of the rule must now be the preservation of the fairness of the trial in which the decision is entrusted to the trial judge alone.”

77.  In China Medical Technologies Inc v Bi Xiao Qiong[2020] HKCA 541, the Court of Appeal also held the Hong Kong court is duty bound to assess and evaluate the evidence before it, independently of the judgment of any other court. The judgment of the other court is “at most a record of how another court viewed the evidence”, “an expression of opinion” by the other court, and is not relevant for the disposal of the matter before the Hong Kong court. The Court of Appeal explained that the foreign judgment in question added nothing to the evidence and was irrelevant to the determination of the appeal in terms of factual evaluation.

78.  The Plaintiffs accept that decisions of foreign courts may be relied upon as evidence of foreign law, as opposed to any findings of facts and conclusions made in the judgment. However, Counsel for the Plaintiffs highlighted that the court is still not bound to apply a foreign decision if it is satisfied, as a result of all the evidence, that the decision does not accurately represent the foreign law (Dicey, Morris and Collins, The Conflict of Laws (16^th edition) Vol 1, para 3-019). Citing Shenzhen Development Bank Company Ltd v New Century Int’l (Holdings) Limited HCA 2976/2001, unreported, 31 July 2002, Counsel for the Plaintiffs pointed out that where there is conflicting expert evidence on foreign law before the court, the judge is entitled and obliged to use his legal training and to form his own view on the meaning of foreign law, even if the expert’s opinion as to its meaning is different from his/her own.

79.  On behalf of CMPH, Counsel submitted that it is an abuse for a party to initiate legal proceedings which constitute a collateral attack upon a final decision made against that party by another court of competent jurisdiction, where the party had full opportunity to contest the decision, if the pursuit of the same issue in the new proceedings would result in manifest injustice, or bring the administration of justice into disrepute amongst right-thinking people (China North Industries Investment Ltd v Chum [2010] 5 HKLRD 1). It was highlighted that abuse can be found even where the parties to the subsequent proceedings are not the same, and cannot be described as privies of the original party. Counsel highlighted that the same principle applies when it comes to a collateral attack against a foreign judgment.

80.  Counsel for CMPH also contended that the Hollington rule does not exclude reliance on the evidence referred to in earlier judgments (such as the contents of documents or the evidence of witnesses), or statements of fact made in earlier judgments (Capital Century). The rule in Hollington is also not engaged when foreign court decisions are relied on as evidence of foreign law, because foreign law, treated as a question of fact, is always an issue on which opinion evidence is admissible. Counsel contended that, a fortiori, the earlier judgments are admissible to show that these judgments and the findings therein had been made, as opposed to their being admitted as evidence of the facts found (Wei Xing v Willwin Development (Asia) Co Ltd HCMP 1922/2016, 13 April 2017).

81.  At this initial stage, it may be useful to point out that according to Counsel for the Plaintiffs, none of the judgments of the Djibouti Courts sought to be relied upon by the Defendant in this case contain any proposition of Djibouti law as expressed, particularly when they do not contain any analysis or reasons.

Dissolution Ground

82.  In terms of finality and being the most recent in the chronology of events affecting the Summonses for determination, I will first deal with the Dissolution Ground.

83.  The first argument made for the Plaintiffs against the Dissolution Ground was that the Dissolution Judgment of 20 December 2023, whereby DCT was dissolved and a liquidator was appointed for DCT, had been suspended pending the appeal to the Djibouti CA. Such argument was superceded by subsequent events, as the Dissolution CA Judgment was made on 26 February 2023, whereby the appeal was dismissed as being out of time. There is no further question of the Dissolution Judgment being in suspension.

84.  After the issue of the Dissolution CA Judgment, the Plaintiffs’ further submission on the evidence filed is that (as per Michou 8) DPWD did not have a fair opportunity to be heard in the appeal process. According to the Plaintiffs, the appeal process was “farcical”, as the Djibouti CA had initially closed the case, after taking allegedly unusual steps to speed up the process in order to procure a ruling from the Djibouti CA prior to the hearing of the Authority Summons in Hong Kong, and then the Djibouti CA reopened the case on its own accord to permit the Public Prosecutor to make submissions. The Plaintiffs complain that the Public Prosecutor had submitted new evidence just 2 days before the hearing at which the Dissolution CA Judgment was rendered, relying on new evidence on which they did not have the opportunity to make their submissions.

85.  The Plaintiffs further maintain that the date of service of the Dissolution Judgment, as accepted by the Djibouti CA, was manifestly wrong, perverse and unjustifiable. It was by virtue of its finding on the date of service that the appeal was adjudged out of time, and dismissed on that ground.

86.  In the premises, the Plaintiffs submit that the Dissolution CA Judgment (1) involved breaches of principles of natural justice and/or procedural defects which constitute a denial of substantive justice; and (2) that the error made in the Djibouti CA Judgment as to service was so wrong as to be evidence of bias and/or lack of good faith on the part of the Djibouti CA in arriving at the conclusion reached by it, that the appeal should be dismissed as it was one day out of time.

87.  These questions raise the issues of whether the Dissolution Judgment and the Dissolution CA Judgment were rendered in breach of principles of natural justice and/or substantial justice as recognized by the Hong Kong Courts; and whether the Plaintiffs had to exhaust all local remedies available under Djibouti law in respect of the defects in the Djibouti process of which they now complain, before they can claim before the Hong Kong Court that recognition of the judgments of the Djibouti Courts should be refused. If they were so required, the further question is whether the Plaintiffs had in fact exhausted its local remedies.

88.  From the authorities cited by the parties, the judgment in Koza Ltd v Koza Altin Isletmeleri AS [2022] EWCA Civ 1284 is helpful in its references to the cases which explain the operation of the principles involved in the recognition of foreign judgments. At paragraph 58 of the judgment of Sir Julian Flaux, it was explained that the deferential approach adopted by English courts under the foreign act of state doctrine to foreign legislation or executive acts has no application to foreign judgments, which attract a different principle. The case of Deutsche Bank AG London Branch v Receivers; Central Bank of Venezuela v Governor and Company of the Bank of England [2021] UKSC 57, and the judgment of Lord Lloyd-Jones JSC was then cited:

“157. Although judicial rulings of a foreign state are manifestations of state sovereignty, it is now clear that they do not themselves attract the operation of any rule of foreign act of state applicable in this jurisdiction and, as a result, are not entitled to the deference which may be shown to legislative and executive acts of a foreign state. So much was established by Lord Collins delivering the judgment of the Judicial Committee of the Privy Council in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7; [2012] 1 WLR 1804, para 101:

“The true position is that there is no rule that the English court (or Manx court) will not examine the question whether the foreign court or the foreign court system is corrupt or lacking in independence. The rule is that considerations of international comity will militate against any such finding in the absence of cogent evidence. That, and not the act of state doctrine or the principle of judicial restraint in Buttes Gas & Oil Co v Hammer (No 3) …, is the basis of Lord Diplock’s dictum in The Abidin Daver … and the decisions which follow it. Otherwise the paradoxical result would follow that, the worse the system of justice in the foreign country, the less it would be permissible to make adverse findings on it.

158. Rix LJ was able to build on this foundation when delivering the judgment of the Court of Appeal in Yukos Capital(No 2) [2014] QB 458, which held justiciable the issue whether judicial acts had been part of a “campaign waged by the Russian state for political reasons against the Yukos group and its former CEO” (paras 29(ii), 90). This difference of approach does not reflect any hierarchical inferiority of judicial acts but rather reflects a shared understanding of how courts should behave under the rule of law. As Lord Mance put it in Belhaj v Straw [2017] AC 964, para 73(ii):

“If one believes in justice, it is on the basis that all courts will or should subscribe to and exhibit similar standards of independence, objectivity and due process to those with which English courts identify.”

159. As a result, courts in this jurisdiction are more willing to investigate whether a foreign court is acting in a way that meets the standards expected of a court and whether there has occurred or is likely to occur a failure of substantial justice. For this reason, foreign judgments fall to be assessed under different rules from those applicable to legislative and executive acts and are simply less impervious to review. The matter is admirably expressed by Rix LJ in Yukos [2014] QB 458, para 87:

“So the position is, to put the matter broadly, that whereas in a proper case comity would seem to require (at any rate as a principle of restraint rather than abstention) that the validity or lawfulness of the legislative or executive acts of a foreign friendly state acting within its territory should not be the subject of adjudication in our courts, comity only cautions that the judicial acts of a foreign state acting within its territory should not be challenged without cogent evidence. If then the question is asked – Well, why should acts of a foreign judiciary be treated differently from other acts of state, and what is the basis of that difference? – the answer, in our judgment, is that judicial acts are not acts of state for the purposes of the act of state doctrine. The doctrine in its classic statements has never referred to judicial acts of state, it has referred to legislative or executive (or governmental or official) acts of a foreign sovereign. … It is not hard to understand why there should be a distinction. Sovereigns act on their own plane: they are responsible to their own peoples, but internationally they are responsible only in accordance with international law and internationally recognised norms. Courts, however, are always responsible for their acts, both domestically and internationally. Domestically they are responsible up to the level of their supreme court, and internationally they are responsible in the sense that their judgments are recognisable and enforceable in other nations only to the extent that they have observed what we would call substantive or natural justice, what in the United States is called due process, and what internationally is more and more being referred to as the rule of law. In other words the judicial acts of a foreign state are judged by judicial standards, including international standards regarding jurisdiction, in accordance with doctrines separate from the act of state doctrine, even if the dictates of comity still have an important role to play. As Lindley MR said in Pemberton v Hughes [1899] 1 Ch 781, 790: ‘If a judgment is pronounced by a foreign court over persons within its jurisdiction and in a matter with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice’.” (Emphasis added)

In the result, the Court of Appeal therefore agreed with the holding of Hamblen J at first instance, [2011] EWHC 1461 (Comm); [2012] 1 All ER (Comm) 479, para 201, that “there is no rule against passing judgment on the judiciary of a foreign country”.”

89.  Counsel for the Plaintiffs highlighted the fact that the principle of non-recognition of judgments obtained in breach of natural justice applies equally to judgments in rem, as demonstrated by the case of Koza Ltd itself, and by Altimo Holdingsand Investment Ltd v Kyrgyz Mobil Tel Limited [2012] 1 WLR 1804.

90.  Adams v Cape Industries PLC [1990] 1 Ch 433 has been cited in many of authorities on the issue, and the judgment of the Court of Appeal sets out guidance on the legal principles. Slade LJ first referred to the judgment of Lindley MR in Pemberton v Hughes [1899] 1 Ch 781, where he said:

“If a judgment is pronounced by a foreign court over persons within its jurisdiction and in the manner with which it is competent to deal, English courts never investigate the propriety of the proceedings in the foreign court, unless they offend against English views of substantial justice. Where no substantial justice, according to English notions, is offended, all that English courts look to is the finality of the judgment and the jurisdiction of the court, in this sense and to this extent -namely, its competence to entertain the sort of case which it did deal with, and its competence to require the defendant to appear before it. If the court had jurisdiction in this sense and to this extent, the courts of this country never inquire whether the jurisdiction has been properly or improperly exercised, provided always that no substantial justice, according to English notions, has been committed.”

91.  On the question of natural justice, Slade LJ explained this by reference to the judgment of Atkin LJ in Jacobson v Frachon, 138 LT 386, where it was observed:

““The Master of the Rolls seems to prefer, and I can quite understand the use of the expression, ‘contrary to the principles of natural justice;’ the principles it is not always easy to define or to invite everybody to agree about, whereas with our own principles of justice we are familiar. Those principles seem to me to involve this, first of all that the court being a court of competent jurisdiction, has given notice to the litigant that they are about to proceed to determine the rights between him and the other litigant; the other is that having given him that notice, it does afford him an opportunity of substantially presenting his case before the court. Both those considerations appear to be essential if they are to be in accordance with natural justice.” (Emphasis added.)

We have had the benefit of very careful and detailed analyses in argument of the judgment in Jacobsonv. Frachon. We intend no disrespect to such arguments if we do not prolong an already very long judgment (in which we have already decided that the defendants succeed on the presence issue) by recapitulating these analyses. We will summarise our conclusions in relation to Jacobson v. Frachon, 138 L.T. 386, as follows:

(1) Atkin L.J. in his judgment was not attempting to make an exclusive or comprehensive statement of the circumstances in which our courts will treat the procedure adopted by a foreign court in reaching its decision as offending against the principles of natural justice.

(2) Lord Hanworth M.R. was clearly of the view, at p. 390, which we share, that the requirements of due notice and proper opportunity to be heard will, in the majority of cases which can be expected to arise, sufficiently comprise the concept of natural justice in a procedural context, but he prudently qualified his statement by saying that they “almost, if not entirely” comprise it.

(3) We therefore reject the contention that the decision of this court in Jacobson v. Frachon restricted the defence of breach of procedural natural justice to the requirements of due notice and opportunity to put a case. Scott J. was entitled, in our view, to direct himself by reference to the test stated by Lord Lindley M.R. in Pemberton v Hughes [1899] 1 Ch. 781, 790, and to consider whether the procedural defect alleged by Cape was such as to constitute a breach of an English court's views of substantial justice. The point was not concluded against the defendants merely because they had been given proper notice of the application for default judgment and would, if they had attended, have been allowed full opportunity to put their case. …”

92.  Slade LJ then considered the requirement of using remedies which are available in the foreign court, and whether and how this would affect the English Court’s assessment of its view of the overall justice of the foreign judgment. His summary as set out in the judgment is as follows:

“It is at least clear that our law does not oblige a defendant who can show that a foreign judgment has been obtained by fraud to have used any available remedy in the foreign court with reference to that fraud if he is successfully to impeach that judgment in our courts: see Abouloff v. Oppenheimer & Co. (1882) 10 Q.B.D. 295 and Jet Holdings Inc. v. Patel [1990] 1 Q.B. 335. The position may well be the same in cases wherethere has been a breach of natural justice of the two primary kinds considered by Atkin L.J. in Jacobson v. Frachon,138 L.T. 386, 392, namely, absence of notice of the proceedings or failure to afford the defendant an opportunity of substantially presenting his case.

In this judgment, however, we are dealing with a case where, although there was in our view a departure from the basic principles of natural justice in the assessment of the amount of a default judgment, nevertheless (a) the error which led to this departure was an honest error on the part of all concerned; (b) the defendants had proper notice of the proceedings and could have presented their case on its merits if they had chosen to do so, but chose not to do so; (c) the procedural rules applicable in the Tyler Court were themselves fair and just; (d) the defendants had the right to apply to set aside the judgment on the grounds that the procedure for the assessment of damages was irregular under the relevant rules and such application would presumably have been allowed if made in due time.

Against this background, we are not persuaded that possession of and failure to exercise this right by the defendants can be disregarded as being wholly irrelevant in determining whether the proceedings in the Tyler Court, which we think must be viewed as a whole, offend against English views of substantial justice, within the principles stated by Lord Lindley M.R. in Pemberton v Hughes [1899] 1 Ch. 781, 790, as the plaintiffs would submit.

It is well established that a defendant, shown to have been subject to the jurisdiction of a foreign court, cannot seek to persuade our court to examine the correctness of the judgment whether on the facts, or as to the application by the foreign court of its own law or, when relevant, of the law of this country. A foreign judgment is not impeachable merely because it is “manifestly wrong”: Godard v. Gray, L.R. 6 Q.B. 139; Castrique v. Imrie (1870) L.R. 4 H.L. 414 and Robinson v Fenner [1913] 3 K.B. 835, 842. In any such case it could be said that there has been a breach of natural justice, but it is not a type of breach which our courts will consider relevant. In effect, their attitude is that the only way in which the defendant can seek to correct an error of substance made by the foreign court is by using such means for correction of error as may be provided under the foreign system.

This being the position where there has been an error of substance, it would, in our judgment, be anomalous if our courts were obliged wholly to disregard the existence of a perfectly good remedy under a foreign system of procedure in considering whether the defective operation of that procedure has led to a breach of natural justice.

…

Since the ultimate question is whether there has been proof of substantial injustice caused by the proceedings, it would, in our opinion, be unrealistic in fact and incorrect in principle to ignore entirely the possibility of the correction of error within the procedure of a foreign court which itself provides fair procedural rules and a fair opportunity for remedy. The court must, in our judgment, have regard to the availability of a remedy in deciding whether in the circumstances of any particular case substantial injustice has been proved. However, the relevance of the existence of the remedy and the weight to be attached to it must depend on factors which include the nature of the procedural defect itself, the point in the proceedings at which it occurred and the knowledge and means of knowledge of the defendants of the defect and the reasonableness in the circumstances of requiring or expecting that they made use of the remedy in all the particular circumstances.”

93.  On behalf of the Plaintiffs in this case, Counsel places reliance on Agbara v The Shell Petroleum Development Company of Nigeria Limited [2019] EWHC 3340 (QB), to emphasize that there is no absolute rule that a litigant resisting recognition of a foreign judgment must exhaust all remedies available in the foreign court to correct the irregularity or injustice complained of.

94.  Agbara concerned whether it would be “just and convenient” for a foreign judgment to be enforced in the UK under section 9 of the Administration of Justice Act. At paragraphs 32 and 33 of the judgment of Jason Coppel QC, it was observed that breach of natural justice is a well-established defence to a common law action to enforce a judgment, and whether or not there has been a breach of natural justice, and whether such a breach should justify the exercise of a discretion against registering the judgment, must be determined with due regard to international comity and respect for the foreign legal system. In the judgment, the learned deputy judge examined the procedures in the foreign jurisdiction, and concluded that there was a serious breach of natural justice on the facts, as Shell was not given the opportunity to be heard in the trial which took place and the judgment was obtained in substantial breach of natural justice.

95.  The court then proceeded to consider the next question, of whether the force of that substantial breach is lessened or removed by Shell’s unsuccessful appeal against the judgment. At paragraph 40, the learned judge explained:

“40. Shell has had the opportunity to appeal and the reasons for why no such appeal has succeeded have been procedural rather than substantive. Shell failed to file an Appellant’s brief before the Court of Appeal and then failed to apply for permission to appeal to the Supreme Court when permission was required. Further, Shell withdrew its appeal from the decisions of the Judge made on 25 February 2008, ostensibly because it had become unnecessary in circumstances where a new judge was to be allocated to the claim and would hear it afresh.

41. I do not consider that Shell’s failure to pursue an appeal in accordance with Nigerian procedural rules should lessen to any significant extent the force in the analysis under s. 9(1) AJA of the serious breach of natural justice which occurred on 25 February 2008. First, there is authority that a party complaining of a breach of natural justice in the obtaining of a foreign judgment which is of the most serious kind is not required to demonstrate that it has exhausted its remedies by way of appeal against that judgment in the jurisdiction in which it was obtained.

…

42. It was not necessary for the Court of Appeal in Adams to reach a definitive conclusion on that point, because the alleged breach of natural justice in that case was not of the most serious kind. The breach in the present case does fall into the most serious category but, strictly, the point raised in Adams does not arise for determination here either, as I am only considering whether it would be “just and convenient” to register the judgment not whether there is an absolute bar to registration at common law. Nevertheless, it does seem to me that there is a material analogy between a judgment obtained by fraud and one which has been obtained following the other party being unjustly prevented from presenting its case, such that it ought not to be necessary for domestic remedies to be exhausted in the latter situation. In weighing up whether it is just and convenient for the judgment to be enforced in the UK, I should therefore be cautious in any criticism of Shell regarding its attempts to appeal the judgment.”

96.  For the Plaintiffs, Counsel submitted that where there is a breach of natural justice of the two primary kinds, involving lack of due notice of the proceedings and a party being prevented from presenting its case, it ought not be necessary for the domestic remedies to be exhausted.

97.  Counsel for the Plaintiffs did point out that in Cancrie Investments Ltd v Mr Zulfiqur Al Tanveer Haider [2024] EWHC 1876, the court referred to the judgment in Agbara cited above, but interpreted it as not laying down any definitive rule that exhaustion of local remedies is not necessary even for the most serious breach of natural justice. At paragraph 101 of the judgment in Cancrie, the learned deputy judge observed as follows:

“Although the judge in the Agbara case urged caution when dealing with cases of the most serious breach of natural justice including where one party is unjustly prevented from preventing their case, I do not understand him to be suggesting that one should not still adopt the factual approach described in Cape v Adams but only that in such a case the availability of a domestic remedy will be of much less significance.”

98.  I turn to the application of the above relevant principles to the facts of the present case.

Lack of notice of the Dissolution Proceedings

99.  The Plaintiffs have maintained throughout that they had never been served with the papers initiating the Dissolution Proceedings, nor ever notified of the relevant summons (Michou 7, paragraphs 12-18; Lucas 1, paragraphs 30-33). This was notwithstanding the serious nature of the proceedings, affecting the dissolution of DCT. According to the evidence of the Plaintiffs’ experts on French law and Djibouti law, DPWD as the controlling shareholder of DCT obviously had an interest in the Dissolution Proceedings and in the relief sought, but as neither DCT nor any of the directors appointed by DPWD to DCT had been notified of the proceedings, they were not present at the hearing and did not have the opportunity to present their case and objections to the dissolution.

100.  There is no evidence as to how the summons initiating the Dissolution Proceedings were served. The only reference was made in the Dissolution Judgment itself, when it stated that “the Defendant (DPWD) was “summoned via the Public Prosecutor” but did not appear at the hearing on 20 December 2023 when the Dissolution Judgment was made (“20/12 Hearing”). On the part of the CMPH, it was not in a position to adduce any evidence in this regard since it was not a party to the Dissolution Proceedings. The fact remains that there was no evidence at all to contradict the evidence of the Plaintiffs, that they had not been notified of nor served with the documents initiating the Dissolution Proceedings.

101.  CMPH’s Djibouti law expert sought to draw the distinction between being properly served with the Dissolution Proceedings, and being notified and having notice of the proceedings. The emphasis made for CMPH was that irrespective of how and whether the Dissolution Proceedings were served on DPWD, Kamil, who was the local agent appointed by the Plaintiffs’ lawyers, was in court at the 20/12 Hearing, when the Dissolution Judgment was pronounced. The Defendant also claims that Kamil was given a copy of the “Role”, which is akin to our Court List, on the same day. The Role listed, as one of the “New Matters” to be dealt with by the Djibouti Commercial Court on the day, the Dissolution Proceedings concerning DCT and DPWD. There is no dispute that Kamil did not in any event make any submissions on behalf of any of the Plaintiffs when he was in court at the 20/12 Hearing.

102.  The Role is similar to the Court List of the Hong Kong courts, and is issued shortly before the day of a hearing, listing matters to be put before the Djibouti Court on the day. It sets out matters “set down for decision”, matters which had been adjourned before, and “new matters”.

103.  The fact of Kamil’s presence in court was explained as follows, and there does not appear to be substantial difference in the separate accounts given.

104.  According to Abayazid 7 filed for CMPH, there are about 30 practising advocates in Djibouti, and they all typically meet at the Court House in the morning on Wednesdays, which is when the main hearings before the Djibouti CFI and the Djibouti CA take place. The list of the matters to be heard (ie the Role) is made available by the Djibouti Court registry to all advocates. At the hearing, the Court typically follows the order of the matters as they appear in the Role. The Court first deals with the matters which have been set down for decision at the hearing and issues the Court’s decision orally. The dispositive part of the decision is reproduced in the form of an Extrait de plumitif prepared by the Court clerk and made available at the Court registry after the hearing. Matters which had been adjourned at previous hearings are then dealt with, followed by new matters.

105.  Abayazid was present at the 20/12 Hearing when the dissolution of DCT was ordered. I read his evidence (paragraph 16 of Abayazid 7) to mean that he was in court as advocate because his name appeared in 3 matters listed in the Role, for adjourned matters. According to Abayazid, he observed that Kamil was also present. The Republic of Djibouti and DCT were also represented at the 20/12 Hearing.

106.  Kamil’s role was explained in Michou 9 (at paragraph 7). The Plaintiffs claim that Kamil is a “corresponding lawyer” who was appointed by the Djibouti Bar Association to represent DPWD, after its former attorney passed away in 2021, and there were difficulties in finding new representation for the Plaintiffs in Djibouti. According to Michou, Kamil’s role was “to facilitate procedural steps in the various Djibouti proceedings”. Typically, Michou and his team would draft and prepare written submissions and court filings, obtain instructions from DPWD, and then Kamil would facilitate the filing of the documents and appear on behalf of DPWD in the Djibouti court. On the basis of this explanation, it can be argued that service of any documents relating to proceedings in Djibouti on Kamil can constitute at least notice on DPWD as an agent in Djibouti for the filing of documents in Djibouti.

107.  However, I find it difficult to accept that Kamil’s fortuitous presence in court on 20 December 2023, when the Dissolution Proceedings were listed to be heard by the Djibouti court, according to the Role - which was only sent to Kamil on or just before the 20/12 Hearing - can constitute valid and proper service or even proper and adequate notice of the relevant documents on DPWD. There is no evidence that Kamil was in court because of any prior service of the documents in the Dissolution Proceedings on him, on behalf of DPWD, in accordance with Djibouti law. On my reading of the evidence, he was in court simply on the routine Wednesday morning when all the business of the Djibouti Court would take place. Without having been properly served or notified of the Dissolution Proceedings before the receipt of the Role, Kamil could not have been in a position to seek and obtain instructions from DPWD on the matter listed for hearing.

108.  I do not find useful or adequate the justification given by the Defendant’s expert, that the judge hearing and deciding on the matter can and has the power to determine, on the facts of a case, whether to adjourn a hearing, or to proceed in the absence of a party. Even if the court has the power to make a decision or to proceed with the hearing in a case where the judgment is “deemed adversarial” and can be reviewed on appeal, that does not by itself mean that there is no denial or breach of the principles of natural justice if the facts so establish the breach. On appeal, the court reviewing the judgment deemed adversarial may well consider that on the facts, the order made in the absence of the party who had not been properly served constitutes a breach of the rules of natural justice and a denial of a party’s right to be heard.

109.  I accept the submissions made for the Plaintiffs, that even if the papers initiating the Dissolution Proceedings had been served on (or notified) through the Public Prosecutor, the evidence cannot show that those papers had been duly forwarded by the Public Prosecutor to DPWD before the 20/12 Hearing, in accordance with Djibouti law (as distinct from the evidence on how the Dissolution Judgment had been served via the Public Prosecutor, and thereafter on DPWD through the diplomatic service). As will be illustrated below, it is apparent from the Dissolution CA Judgment that the Djibouti CA accepts that mere delivery of documents to the Public Prosecutor does not amount to valid service under Djibouti law.

110.  In my judgment, documents for the commencement of the Dissolution Proceedings are important as they constitute the initiation of the proceedings seeking, and in this case resulting in, the order for dissolving DCT and the appointment of a liquidator for DCT. I accept the expert evidence of the Plaintiffs, that it is essential and necessary for the shareholders, in this case DPWD as the majority shareholder, of the company to be notified of the commencement of the Dissolution Proceedings and the relief sought, and be given the opportunity to make submissions to oppose the dissolution sought by the Administrator, who acted for and in the name of DCT when initiating the Dissolution Proceedings. In the absence of satisfactory evidence as to how the documents for the initiation of the Dissolution Proceedings had been served either on DPWD, or on the directors appointed by DPWD to the board of DCT who may be present in Djibouti, I am not satisfied that DPWD had due notice of the Dissolution Proceedings, and without such notice, DWPD did not have the opportunity to present its case in the Dissolution Proceedings, before the Dissolution Judgment was issued.

111.  On behalf of CMPH, it was highlighted that if there was any breach of natural or substantial justice in the process of the Djibouti Proceedings as the Plaintiffs claim, they still ought, but had failed, to exhaust the local remedies available to them under Djibouti law. Counsel contended that the Plaintiffs should have appealed or applied to set aside the Dissolution Judgment, but they had delayed the matter despite having knowledge of the Dissolution Judgment from the time it was made, until more than 2 months thereafter, which rendered their appeal being dismissed for being filed out of time. It was argued that the Plaintiffs cannot complain about the alleged breach of natural justice, or their having been deprived of notice of the Dissolution Proceedings, or of the chance to present their case, if they by their own default failed to comply with the applicable Djibouti rules and filed their appeal late.

112.  In my judgment, the failure to effect due service of the papers initiating the Dissolution Proceedings, and the lack of due notice to the Plaintiffs of the 20/12 Hearing, constituted a breach of natural justice of the two primary kinds considered in Jacobson v Frachon. Having considered the nature of the defect/breach in the process, the significance of the 20/12 Hearing and of the Dissolution Judgment on DPWD, I do not consider that it was necessary for the Plaintiffs to exhaust any available local remedy open to them. Even if it were necessary, I do not regard the Plaintiffs’ failure or alleged delay in pursuing the local remedies in Djibouti to have such serious effect to the extent of lessening the impact of the significant breach of natural justice.

113.  On the evidence, the Dissolution Appeal was not dismissed on the merits, after the Djibouti CA had considered the facts including the manner of service of the documents relating to the Dissolution Proceedings, and the complaint made by the Plaintiffs that DPWD had not received proper notice of the Dissolution Proceedings. After dismissing the appeal on the time limitation point, there was no further opportunity for the Djibouti CA to consider and rectify the alleged breach of natural justice. In all the circumstances of this case, the availability of an appeal as a local remedy is not of sufficiently great significance.

Dissolution CA Judgment

114.  The parties devoted much time, argument and evidence on the Dissolution CA Judgment. On CMPH’s case, the Djibouti CA had dismissed the Dissolution Appeal, and the Dissolution Judgment should be recognised by the Hong Kong Court, by finding that upon dissolution of DCT and the appointment of a liquidator for DCT, these proceedings commenced by Deacons in Hong Kong on the instructions of the former directors of DCT should be dismissed on the ground of lack of authority from the liquidator.

115.  On the Plaintiffs’ part, the conduct of the Dissolution Appeal and the dismissal of the appeal was itself a breach of natural justice. The complaints have been summarized in the earlier paragraphs of this action.

116.  I have found that the Dissolution Judgment should not be recognized by the Hong Kong Court, as being in breach of the rules of natural justice. The Dissolution CA Judgment simply dismissed the Dissolution Appeal made by the Plaintiffs for having been filed out of time, without dealing with or dismissing the merits of the issue of the proper service of the Dissolution Proceedings on DPWD. Having considered the complaints made by the Plaintiffs and reviewed the Dissolution CA Judgment itself, I cannot find that the CA Judgment can itself be rejected as being so wrong as to be evidence of bias, or be such that no court acting in good faith could have arrived at it, which is the relevant test identified in Maximov v Open Joint Stock Co ‘Novolipetsky Metallurgichesky Kombinat’ [2017] 2 CLC 121 (at para 15).

117.  The reasons for my conclusion on the Dissolution CA Judgment are summarized below. However, this finding of mine does not affect my conclusion on the Dissolution Judgment, as having being made without due service of the Dissolution Proceedings on DPWD, and in breach of the rights of DPWD to be heard. The Dissolution CA Judgment made no order on the merits of, or substantive issues, as to the dissolution of DCT, to be given effect by this Court.

118.  With regard to the Plaintiffs’ allegation that the Republic had colluded with the Defendant in this case, or that the Djibouti CA had somehow expedited the Dissolution Appeal to procure the Dissolution CA Judgment for the purpose of frustrating the proceedings in Hong Kong, I can find no evidence to substantiate such claim. Nor can I read any hostility or mala fide into any attempt by the Dijibouti courts to manage or expedite the Dissolution Proceedings or the Dissolution Appeal in any way. It is only natural, and to be expected, that a court would not wish any proceedings to be delayed and to take active case management steps in the public interest.

119.  Nor is it the proper function of this Court, bearing in mind the concerns as to comity and the caution for restraint expressed in the authorities, to question either the Djibouti rules of procedure, or the merits of any case management or other decision of the Djibouti court, in applying the law of Djibouti governing the proceedings before it – unless it is demonstrably clear, on cogent evidence, that there is some egregious breach and disregard of the rules of natural justice.

120.  The Plaintiffs’ complaint, that they were not given the necessary time to prepare their case and to give the necessary instructions to their lawyers, has to be read in the entire context of the case. On the facts, the Djibouti CA had already granted several adjournments on the application of DPWD (albeit for periods shorter than the extension sought). Submissions in writing had in fact been filed on behalf of DPWD. These already made the claims that DPWD as a shareholder of DCT had not been served with and had not received the documents commencing the Dissolution Proceedings, that the Administrator had no locus to initiate those proceedings, and that there was an arbitration agreement in the Articles of DCT and in the relevant JVA. Whether adjournments should be granted, and the length of the adjournments granted, are all case management decisions within the discretion of the Djibouti Court.

121.  As to the involvement of the Public Prosecutor, this Court is not surprised by the Djibouti CA’s decision to involve and to seek submissions from the Public Prosecutor. According to the Defendant’s expert, submissions from the Public Prosecutor are compulsory in dissolution matters under the Djibouti Civil Procedure Code (“Code”) because these concern either the “personal status” of DCT, or concern the Republic which is a shareholder of DCT. The dissolution sought affected the status and existence of DCT (a company incorporated under the laws of Djibouti), of which the Republic was a shareholder. It was pointed out that even in the initial Dissolution Proceedings before the Djibouti CFI, the Public Prosecutor had been invited to file requisitions. According to the Dissolution Judgment, the Dissolution Proceedings had been communicated to the Public Prosecutor, who had requested that DCT’s request for dissolution be granted and that a liquidator be appointed. DPWD should not have been surprised by the Djibouti CA’s decision to seek submissions from the Public Prosecutor in the Dissolution Appeal, before issuing judgment.

122.  As for the claim that they had been taken by surprise by the new documentary evidence produced by the Public Prosecutor 2 days before the Dissolution CA Judgment was handed down, I am not persuaded that this is so.

123.  In the submissions filed by the Public Prosecutor on 11/12 February 2025, it was argued that the Dissolution Appeal was inadmissible on the ground of delay. Submissions were made on the manner of service, relying on the fact that the Dissolution Judgment was served on the Public Prosecutor’s office on 27 December 2003. According to the Public Prosecutor’s submissions, the Public Prosecutor’s Office had sent the Dissolution Judgment to the Minister of Justice on 2 January 2024, and that according to Article L 377-2 of the Code, the Dissolution Judgment was effectively served on 4 January 2024, by diplomatic channels through the intermediary of the Djibouti Minister of Justice on the Djibouti Minister of Foreign Affairs. The Dissolution Appeal was on that basis claimed to be filed more than 2 months after the effective service of the Dissolution Judgment.

124.  DPWD filed its written submissions in reply on 19 February 2025. It sought a hearing for oral arguments and for an adjournment of one month. The Court only agreed to adjourn the hearing to 26 February 2025, for any further written submissions and for “possible oral argument”. According to the Plaintiffs, it was on 24 February 2025 that the Public Prosecutor filed and sent to the Plaintiffs’ new documents on the service of the Dissolution Judgment (“New Evidence”), but without any further written submissions as to the contents of the new documents, or how they were sought to be relied upon.

125.  The New Evidence complained of by the Plaintiffs comprised:

(1) A purported undated letter sent by Djibouti’s Embassy to the Ministry of Foreign Affairs of the United Arab Emirates (“UAE Ministry”) enclosing the Dissolution Judgment (“Undated Letter”); and

(2) A purported letter dated 30 January 2024 from Djibouti’s Embassy to Djibouti’s own Ministry of Foreign Affairs (“30 Jan Cover Letter”) referring to:

(i) the purported transmission of another letter (No 26-2024) dated 23 January 2024 sent to the UAE Ministry concerning service of the Dissolution Judgment (“23 Jan Letter”); and

(ii) a purported “acknowledgment” of the said service (“Purported Acknowledgment”).

The Plaintiffs highlighted the fact that the references to the 23 Jan Letter and the Purported Acknowledgement were not readily identifiable on the face of the actual documents included in the Exhibit List submitted by the Public Prosecutor.

126.  The 26 February 2025 hearing was attended by Kamil and a representative from the Public Prosecutor’s Office. The Public Prosecutor did not make any oral submission, did not address the Court on the New Evidence, and only asked the Court to consider his earlier submissions filed on 11 February 2025.

127.  According to Kamil, the submissions he made to the Court at the 26 February hearing were to oppose the manner in which the Dissolution Proceedings had been managed since December 2024 and he pointed out that DWPD required more time as a foreign company. He claimed that there was no adversarial debate on the New Evidence which he had only received 2 days before the hearing. After a short break, the Dijibouti CA then pronounced simply that the Appeal was out of time, and the Dissolution CA Judgment was made available the next day (which Kamil claimed was unusual).

128.  According to Counsel for the Plaintiffs, they were taken by surprise by the New Evidence on the service of the Dissolution Judgment, and had been deprived of the opportunity to present their case when the Djibouti CA adopted the New Evidence as establishing that the Dissolution Judgment was effectively served on DPWD, when the relevant documents were sent by the Djibouti Embassy in Dubai, UAE (after the Djibouti Ministry of Foreign Affairs had received the documents from the Djibouti Ministry of Justice) to the Ministry of Foreign Affairs in the UAE, and receipt of same was acknowledged and evidenced by a chop imprinted there, on 23 January 2024.

129.  On behalf of the Plaintiffs, it was contended that the conclusion made by the Djibouti CA, as to service having been effected on 23 January 2024 on the basis of the New Evidence submitted, was never part of any submission or argument made before the 26 February 2025 hearing. The Republic, the Administrator and the Public Prosecutor had argued that the Dissolution Appeal was out of time on the basis that service on DPWD had been completed on 27 December 2023, when the documents were served on the Public Prosecutor.

130.  Having reviewed the evidence and the submissions, it cannot fairly be said that DPWD had been deprived of the opportunity to present its case on the service of the Dissolution Judgment. Although the Public Prosecutor produced the entire set of documents by the New Evidence on 24 February 2025, without making any further submissions on the purported effect of those documents, the issue in dispute had always been how and when the Dissolution Judgment had been served on or sent to DPWD: what was the date of effective service of the Dissolution Judgment on DPWD, and whether the Dissolution Appeal was filed within the requisite period of 3 months from the effective date of service of the Dissolution Judgment. As the Plaintiffs accepted, the Public Prosecutor had stated its case as to service, by relying on the date when the Dissolution Judgment was served on the Public Prosecutor, on 27 December 2023. The Plaintiffs were also aware of the submissions and case relied upon by the Republic. I cannot see how the “Certificate of Non-Appeal” issued by the Chief Clerk on 28 March 2924, referring to service on 27 December 2024, can bar the Djibouti CA from adopting another date as effective and valid service, but in any event, the Plaintiffs were aware of this Certificate and its contents.

131.  The New Evidence produced on 24 February 2025 were the official documents which show and demonstrate the dates when the Dissolution Judgment were transmitted, from the Public Prosecutor to the respective ministries within Djibouti, and then by the Djibouti Embassy in Dubai to the respective ministries within the UAE. The issues of the effective date of service of the Dissolution Judgment and how it should be served on DPWD had all along been “in the arena”. I agree with Counsel for CMPH that DPWD had been given adequate notice of the case relied upon by the Public Prosecutor and the Republic, that service was completed upon delivery to the Public Prosecutor in Djibouti, which was 27 February 2023. If DPWD had wanted to make submissions on whether this was correct under Djibouti law, and if not, what in DPWD’s case was the required mode of service and when such service was effected, they could have done so. Mr Yu for CMPH pointed out that from the time when the Dissolution Judgment was issued and when Kamil learnt of it (in December 2023), until the filing of the Dissolution Appeal on 24 May 2024, and up to the hearing before the Djibouti CA on 26 February 2025, DPWD had more than adequate time to ascertain the relevant evidence and to prepare its case on service, if it had wanted to do so.

132.  In fact, DPWD did use the opportunity to make submissions to the Djibouti CA, that service on the Public Prosecutor was inadequate. On the timing of the Appeal, DPWD had already pointed out in its Submissions of 11 December 2024 that it had not been served with the Dissolution Judgment in accordance with the Code, and that the necessary documents had to be dispatched directly to the court of the district in which the person to be notified resides (in accordance with the Riyadh Arab Agreement for Judicial Cooperation), with the necessary proof of service.

133.  The New Evidence only establishes, from the official sources, the relevant dates of the deliveries to the respective entities within Djibouti and the UAE, which evidence could have been used by either the Public Prosecutor or DPWD to support their arguments, if they so wished, at the 26 February 2025 hearing. They did not raise any new points regarding the mode of service adopted, and in any event, Kamil for DPWD could have sought an adjournment to address the New Evidence if that was really necessary, but he chose not to do so.

134.  In all the circumstances, CMPH contends and I agree that the Djibouti CA was entitled not to seek further submissions from the parties, and on the basis of the evidence presented, to reject the Public Prosecutor’s case on the effective date of service, and to adopt the date of 23 January 2024 as the effective date, for the purposes of calculating whether the filing of the Dissolution Appeal was within time. As Lord Diplock observed at p 369C-E of the judgment in Hoffman-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295:

“My Lords, upon the only evidence that is before your Lordships the appellants were given every opportunity to put their case before the commission both orally and in writing. Their case was that it was in the public interest that they should go on fixing prices on the same basis as they had done before, but any other basis would be unfair to them and that they were not going to help the commission to find one. The commission for reasons that are set out in its report rejected the appellants’ arguments. Even in judicial proceedings in a court of law, once a fair hearing has been given to the rival cases presented by the parties the rules of natural justice do not require the decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticizing his mental processes before he reaches a final decision.” (Emphasis added)

135.  Whether the Djibouti CA was correct, in finding the effective date of service to be 23 January 2024 under the relevant and applicable provisions of the Djibouti law, is not for review by this Court. It suffices to say that it does not appear to me to be an error which is so manifestly wrong or fundamentally unfair to be evidence of bias or lack of bona fide on the part of the Djibouti Court.

136.  I also accept the submissions made for CMPH, that the Plaintiffs have not established that they had suffered any prejudice, by identifying any evidence which they could have filed, which could have materially affected the outcome of the Dissolution Appeal. They had already made their case, that DPWD had not actually received the Dissolution Judgment, and even upon the New Evidence, they would have continued to argue that the date of service should be the actual date of DPWD’s receipt, and this would still have been rejected by the Djibouti CA.

137.  As for the point that the 26 February 2025 hearing had been listed for “written submissions … possible oral submissions”, and that somehow the Plaintiffs had been surprised when the Djibouti CA pronounced its judgment at the end of the hearing, the Djibouti CA had (on the evidence) already indicated as early as at the hearing on 22 January 2025 that the matter was reserved for decision, at the next hearing then scheduled on 5 February 2025. If the complaint is that Kamil had not anticipated the need for oral submissions on 26 February, that is also misconceived, when the Role for the 26 February 2025 hearing stated that it was for “possible oral submissions”.

138.  Having found that the Dissolution Judgment should not be recognized, the other points raised by the Plaintiffs against the Dissolution Judgment do not have to be dealt with, but I will do so briefly.

Locus of Administrator/absence of grounds to seek dissolution

139.  The Plaintiffs claim that the Dissolution Proceedings were initiated by the Administrator, purportedly on behalf of DCT, but DCT and the Administrator had no locus to seek the dissolution of the company itself under Article 301-27 of the Djibouti Commercial Code (“Commercial Code”). It was also contended that in the Dissolution Judgment, the Djibouti CFI did not refer to either the Administrator or DCT as “an interested party”, which was the rationale put forward by CMPH’s expert to justify the Dissolution Judgment.

140.  In the Dissolution Judgment, the Djibouti CFI referred to Article 301-27 of the Commercial Code, which provides (inter alia) for early dissolution of a company “ordered by the court upon a member’s application for good cause, notably for breach of his obligations by a member, or for disagreement between the members which paralyzes the functioning of the company”. The Court also referred to Article 315-138 of the Commercial Court, which provide that the court may, on an application filed by an interested party, order the dissolution of a company, where the number of its shareholders is reduced to less than 7 for more than a year.

141.  The Djibouti CFI then observed as follows:

“In the absence of a meeting of the general meeting, such as in the case where this general meeting was not able to validly deliberate upon the last convening, any interested party may apply for the dissolution of the company in court….

In this case, it is clear from the documents in the file that Doraleh Container Terminal has been effected by a paralysis in the functioning of its management bodies for five (05) years now. In this case, three proceedings involving DCT are currently pending before the Djibouti courts, two of which concern the appointment of the provisional administrator.

Similarly, it is established that since her appointment as provisional administrator, she has never been able to fully perform her duties, since the shareholder DPWD has systematically refused to remit the accounting documents she requested and challenged her appointment.

It follows that the shareholders of the said company do not live in harmony and that this situation seriously undermines the affectio societatis, an essential element of the social contract.

In these circumstances, it is appropriate to dissolve Doraleh Container Terminal S.A. in accordance with the provisions of the above-mentioned article 301-27.5 for good cause.” (Emphases added)

142.  CMPH’s expert pointed out that Article 301-27(5) is not the only ground to seek the dissolution of a company, and that the Djibouti CFI had correctly referred to Article 315-139 as a ground for a dissolution order to be made, upon the application of any interested party.

143.  The Djibouti CFI referred in its judgment to the unsatisfactory state of DCL being dormant and in paralysis for 5 years due to the dispute amongst the shareholders and DPWD’s refusal to accept the appointment of the Administrator over DCT. It considered that to be a “good cause” to exercise the court’s power to order an early dissolution of DCL under Article 301-27 of the Code. Whether this is permissible under Djibouti law, whether the actual grounds for dissolution were made out on the facts, and whether the Djibouti CFI was correct in making the order, are not for review by this Court. As Counsel for the Defendant submitted, this Court must assume that the procedure of the foreign court had been properly followed (Jacobson v Frachon (1927) 138 LT 386) and that the court dealing with the case had followed its own procedure and rightly carried out the system which it is the duty of the foreign court to follow. In any event, my finding is that any error is not so manifestly wrong or fundamentally unfair to be evidence of bias or to demonstrate lack of bona fide on the part of the Djibouti court, to entitle this Court to refuse recognition of the Dissolution Judgment.

Dissolution of DCT should be arbitrated

144.  On the Plaintiffs’ case, under the JVA between DPWD and PAID relating to the corporate affairs of DCT, any dispute between the shareholders should be referred to arbitration pursuant to article 20.3. The Djibouti court therefore does not have jurisdiction to rule on and to order the dissolution of DCT as a result of any dispute between the shareholders.

145.  The JVA is governed by Djibouti law. According to CMPH’s expert, the Code states that “it is not possible to conclude arbitration clauses on questions of personal status and capacity … disputes concerning the State … and, more generally, in all matters of public policy” (Article L 710-3). The Code further states that any arbitration agreement is null and void if it is not authorized by Djibouti law.

146.  Counsel for the Defendant drew analogy with the position in Hong Kong, where the winding up or dissolution of companies have been held to be non-arbitrable (citing Re Quiksilver Glorious Sun JV Ltd [2014] 4 HKLRD 759, paras 14 & 18). I am not satisfied that the decision entirely assists CMPH’s case here, as the Court in Quiksilver did find that in a case of a just and equitable winding up petition, (as opposed to a winding up petition on the grounds of insolvency) the dispute on the conduct of a shareholder and whether it is inconsistent with the terms of the shareholders agreement is a dispute which only concerns the shareholders, and can be determined by an arbitrator. The Court only has to decide whether to make the winding up order, after the factual dispute on conduct has been determined in the arbitration.

147.  However, if there was any aspect of the Dissolution Proceedings which could be referred to arbitration, it can only be said that the Djibouti CFI made an error of law in not recognizing that the matter was arbitrable. I do not accept that it is sufficient to show mala fide, or bias.

148.  I accept the submissions made by CMPH, that the dissolution of DCT concerns its “personal status and capacity”, and its existence as a legal entity. The status of the person or entity includes his/its domestic, corporate, official or civic status or position (Spencer Bower and Handley – Res Judicata (6^th Edition) paras 10.01 and 10.06) and can be the subject of a decision in rem, to bind the entire world. Hence, an order for the winding up of a company is a judgment in rem as it concerns the status of a company (Spencer Bower para 10.09). On that premise, the dissolution of DCT is not arbitrable under the Code.

149.  Further, the dispute between DPWD and PAID, the holder of the majority of 66.66% of the shares of DCT for the Republic, is a dispute concerning the State of Djibouti, and renders the dissolution of DCT to fall within Article L 710-3 of the Code.

150.  CMPH further argued that a dispute concerning the dissolution of DCT of which the Republic is a shareholder is a matter of Djibouti public policy. On the expert evidence, as a matter of Djibouti law, an arbitration agreement concerning dissolution of DCT which comes within the ambit of Article L 710-3 would be null and void, and the Dissolution Proceedings cannot be referred to arbitration. I accept their submissions, and find that section 3 of the Foreign Judgments (Restrictions on Recognition and Enforcement) Ordinance does not apply to exclude recognition of the Dissolution Judgment.

Dissolution a reserved matter under JVA

151.  According to the Plaintiffs, Clause 11.1 of the JVA provides that the dissolution of DCT was a “reserved matter” which could not have been pursued without the consent of DPWD. The relevant provisions of the JVA provide for a procedure for passing shareholders’ resolutions whereby DPWD, despite being the minority shareholder, is given a carrying vote, and “reserved matters” under the JVA include any act whereby DCT “may be liquidated, dissolved or wound up”. On the Plaintiffs’ case, as no resolution had been passed with DPWD’s vote, the Administrator had no power at all to cause DCT to apply for its own dissolution, as it transpired in the Dissolution Proceedings.

152.  Clause 11.1 of the JVA and Article 42A of the Articles, on their plain reading, support the Plaintiffs’ case that the shareholders have agreed that “Reserved Matters” include any application for the appointment of a receiver or an administrator over the assets of DCT, any resolution for dissolving DCT, and any act whereby DCT may be dissolved or wound up. The JVA (clause 8.5 and clause 9.3) and the Articles (Article 42A) provide for how the directors and the shareholders are to vote on the Reserved Matters, namely in accordance with the proposal of the DPW shareholders.

153.  I agree with Counsel for the Plaintiffs, that it cannot be discerned from Fage 4 (the expert report filed for CMPH) how and why the dissolution of DCT is a matter which falls within the category of matters which can be decided by the board, and not the shareholders. Mahamoud 4 (also CMPH’s expert) expressed the contrary view, when she opined that the provisional administrator appointed for DCT cannot make decisions which fall within the competence of the general meeting, and cited the dissolution of DCT as one such matter.

154.  However, CMPH relies on the fact that the mechanism contained in Article 42A has been annulled by the Djibouti CFI under the Articles CFI Judgment (ie the Resolution Nullity Ground), which decision was affirmed by the Articles CA Judgment. On CMPH’s case, these Djibouti judgments should be recognized by the Hong Kong Court and I accept this submission (as elaborated below).

The Resolution Nullity Ground

155.  The Plaintiffs’ case is that Deacons’ authority to commence these proceedings on behalf and on the instructions of DCT on 20 August 2018 was expressly and properly conferred by the board of directors of DCT pursuant to the 18 February 2018 Resolution. They maintain that there is no evidence that the meeting at which the 18 February 2018 Resolution was passed was inquorate, or convened without due notice.

156.  CMPH relies on the Articles CFI Judgment and the Articles CA Judgment, to contend that the 18 February 2018 Resolution has been declared a nullity. The Plaintiffs maintain that these judgments should be disregarded by the Hong Kong Court, because they do not give rise to any issue estoppel when there is no mutuality of parties, and are further inadmissible as evidence of the conclusions found by the Djibouti courts. The Plaintiffs further argued that neither the Articles CFI Judgment nor the Articles CA Judgment laid down any principle of Djibouti law, to constitute evidence of foreign law. There is no analysis or explanation in the Djibouti judgments as to why, under Djibouti law, the agreement between the shareholders of DCT as to how they and the directors nominated by them are to vote is against Djibouti public policy.

157.  The Articles CA judgment is the subject of further appeal to the Djibouti Supreme Court, but on CMPH’s evidence, a judgment of the Djibouti CA under appeal is enforceable under the Code unless there is a specific order to the contrary. It was highlighted that there was no application made for a stay of execution of the Articles CA Judgment.

158.  According CMPH’s expert evidence (Fage 2 and Fatouma 5), the nullity of the 18 February 2018 Resolution (by virtue of the Articles CFI Judgment) has retrospective effect, as if the resolution had never existed, and that such nullity can be relied upon by a third party, such as CMPH in this case.

159.  The Plaintiffs contend that the Articles CFI Judgment and the Articles CA Judgment are plainly wrong. The dispute as to the validity of the 18 February 2018 Resolution falls within the scope of the arbitration clauses in the Articles of DCT and in the JVA between the shareholders, and should have been submitted to arbitration. According to the Plaintiffs, the Djibouti courts simply had no jurisdiction to declare the 2018 Board Resolution as null and void. The Plaintiffs further claim that the Republic was not a shareholder of DCT and lacked any standing to nullify the 2018 Board Resolution or to seek a declaration that it was invalid.

160.  In respect of jurisdiction, the Djibouti CFI considered that the Articles Proceedings had been commenced by the Republic, to declare unwritten the clauses contained in the Articles relating to the votes of shareholders and directors, and that the arbitration agreement contained in DCT’s Articles did not bind the Republic. The Djibouti Court pointed out that the Republic became a shareholder of DCT by virtue of the Presidential Order dated 9 September 2018, and this was after the Articles of DCT were signed in May 2017. According to the Djibouti CFI, the Republic was not a shareholder of DCT at the date when the arbitration agreement contained in the Articles was made, and was not a party thereto to be bound by it. It further considered that the arbitration which had been commenced by DPWD against PDSA (for breach of the JVA and the Articles) was a dispute between DPWD and PDSA as shareholders, which was radically different from the Djibouti Articles Proceedings commenced by the Republic, against DPWD as a shareholder and DCT as the company.

161.  Considering the matter objectively, I cannot agree that there is any basis for this Court to find that the Djibouti CFI was so patently or manifestly wrong in its conclusions on jurisdiction, to constitute evidence of bias or lack of bona fide and entitle this Court to refuse recognition of its judgment. The evidence of CMPH’s expert (outlined in the preceding paragraphs of this Decision) as to arbitration agreements on disputes concerning the state of Djibouti (which I have accepted) is also relevant, in the consideration of whether the dispute over the validity of the Articles can be arbitrated.

162.  On the merits of the issues raised in the Articles Proceedings, the Djibouti CFI considered the provisions of the Articles which govern the voting rights of the directors and shareholders of DCT, and in summary, found that the provisions were too wide in terms of the restrictions imposed on the voting powers of the directors and the shareholders, to the extent that it resulted in the majority shareholder’s loss of the freedom to assess, vote and decide on a wide range of matters which affect the operation or existence of the company, so as to deprive the majority shareholder of its decision making power. According to the Articles CFI Judgment, this was contrary to and a breach of the provisions of the Code, such that the relevant Articles should be unwritten.

163.  The Djibouti CFI set out its analysis and the reasons for its judgment, as follows:

“The State of Djibouti argues that, by virtue of Article 21.5, the Board of Directors must vote as the shareholder DPWD wants it to on all questions which relate to “Reserved Matters” which are decided by DPWD pursuant to the Doraleh terminal management agreement or which require a majority other than a simple majority in order to be adopted, and that therefore neither the director representing the majority shareholder nor the board have any room for manoeuvre and are bound by the decisions taken internally by the DP WORLD group.

DP WORLD DJIBOUTI (DPWD) argues on the contrary that the provisions relating to directors’ votes in the articles of association are limited to questions relating to the Reserved Matters as defined by the JVA and to matters decided by the Manager under the Agreement, and that this is a special (and not general) voting agreement drawn up in this way to enable the directors to decide on certain key points of the company’s life in accordance with the instructions of the director having the greatest competence in managing port infrastructures, i.e. DP WORLD DJIBOUTI.

Whereas, as the claimant points out, according to academic legal opinion, the validity of voting agreements within a board of directors must be assessed not only with regard to the company’s interests but also with regard to the deliberative principle. Accordingly, general voting agreements are prohibited. However, where the commitment relates to a specific matter, its validity depends on its subject-matter and in particular on whether it is in the company’s interests.

In the present case, the list of Reserved Matters which appears in clause 11 of the shareholders’ agreement is relatively large and includes matters as diverse as alterations to the articles of association, any change of activity, approval and alteration of the business plan, approval of the accounts, putting guarantees in place, any decision relating to a substantial change to the infrastructure of the Doraleh terminal or the decision to bring any legal or arbitration proceedings.

Whereas it is not disputed that, given the wide range of decisions covered by the Reserved Matters, the obligation to vote in line with the wishes of the shareholder DPWD prevents the directors from forming, from time to time, an opinion on the company's interests according to their own conscience and then expressing it in accordance with the deliberative principle” (Emphases added)

164.  In relation to Article 42A, the Djibouti CFI explained:

“As regards the provisions governing shareholders’ voting, article 42A of the articles of association, relating to “Reserved Matters and recommendations by the Manager” obliges the shareholder PDSA to align its vote with that of the shareholder DP WORLD DJIBOUTI in certain cases:

42A.1: “Any matters requiring an Extraordinary General Meeting and any Reserved Matters shall be decided only by means of a vote and shall be deemed to have been adopted only if the DPW Shareholders have voted in favour of such resolution. If the DPW Shareholders submit such a Reserved Matter for consideration by the Extraordinary General Meeting, the Government Shareholders shall vote in favour of the DPW Shareholders’ proposal.

42A.2: Furthermore, if the DPW Shareholders wish to exercise their right of veto concerning any resolution in particular, the Government Shareholders shall cast their votes in the same way as the DPW Shareholders.

42A.3: Where the Shareholders have expressly agreed, with regard to the Reserve Matters, to cast [their votes] as Shareholders in a certain way, the Shareholders shall vote strictly in accordance with such express agreement.

42A.4: The Shareholders agree that when the Manager makes any recommendation on any matter concerning the operation and management of the Doraleh Container Terminal and such matter is submitted to the Extraordinary General Meeting they shall cast their votes in accordance with the Manager’s recommendations, subject at all times to the Governing Laws.”

The State of Djibouti argues that the scope of this article is extremely wide, which prevents the majority shareholder from freely exercising the political rights attached to its share and therefore results in a general and permanent waiver of its right to vote. DP WORLD DJIBOUTI, for its part, asserts that article 42A of DCT’s articles of association in no way prevents the shareholder PDSA from participating in decision-making and does not deprive it of either its right to vote or its right to attend general meetings. According to DP WORLD DJIBOUTI, article 42A is, on the contrary, limited to indicating a voting direction in certain specific cases which are known in advance, in the corporate interests of DCT.

Article 1985 para. 1 of the Civil Code provides that “any shareholder has the right to participate in collective decisions”.

Article L. 315-86 of the Civil Code also provides that “any shareholder may participate at extraordinary general meetings. Any clause to the contrary shall be deemed unwritten”.

And whereas voting agreements are valid in principle. Such validity is based on the principle of freedom to contract, according to which, even where companies are involved, anything that is not prohibited is permitted. Thus, agreements that are not contrary to the interests of the company are valid provided they do not adversely affect either the shareholders’ essential rights or the fundamental principles concerning the organisation of companies. As the right to participate in collective decisions is a matter of public policy, articles of association cannot derogate from it and shall be null if they do so.

And whereas in this regard, it is not disputed that article 42A of DCT’s articles of association does not prevent the shareholder PDSA (today the State of Djibouti) from attending and voting at general meetings.

Nevertheless, the provisions of article 42A are not limited to indicating a voting direction in certain specific cases; rather, they instruct the majority shareholder generally to vote in a specific way on a whole series of decisions that are essential to the life of the company, including the scope of the Reserved Matters and the powers of the extraordinary general meeting.

And whereas, therefore, it can legitimately be argued that this general voting commitment, which is not limited to a specific operation or transaction, could lead to the majority shareholder losing any freedom to vote and being unable freely to assess and decide on the resolutions submitted to a vote at the general meeting, thus being deprived of its decision-making power.

Consequently, article 42A of the Articles of Association must be deemed unwritten.”

165.  Without any pressure to exercise restraint due purely to considerations of comity, I find that there is no basis to rule that the Articles CFI Judgment is wrong in law, or so manifestly erroneous and fundamentally unfair as to constitute evidence of bias, or lack of bona fide on the part of the Djibouti courts. As highlighted in the judgment above, the Djibouti Court explained that due to freedom of contract, parties may agree on how they may vote, but considerations of whether the voting agreement may be against the interests of the company, or may adversely affect shareholders’ essential rights, are relevant to the Djibouti Court as they are matters of public policy. The Djibouti Court is in my judgment entitled to take these matters into account which deciding whether the Articles are valid. In particular, it is the Djibouti Court which is in the best position to consider matters of Djibouti public policies, and the Djibouti CFI has adequately explained why in its view the restrictions contained in the Articles of the Djibouti company are against Djibouti public policy.

166.  I accept that the Articles CFI and CA Judgments are admissible as to the Djibouti courts’ findings on Djibouti law as to the effect of the voting agreement set out in the Articles of DCT, and I am prepared to recognize their effect, as propounded by CMPH’s experts. According to these experts, since the Djibouti CFI ruled that the 18 February 2018 Resolution was null, the nullity has retrospective effect, and the position is as if the 18 February 2018 Resolution had never existed.

167.  Even if it can be said that the initial commencement of this action by DCT was authorized as at 20 August 2018, the action brought in the name of DCT must, in my judgment, have ceased to be authorized as from the date of the Articles CFI Judgment, on 31 December 2019. Thereafter, any further conduct, and any new act or step required to be taken by Deacons engaged in the name of DCT must require instructions and consent from persons authorized to act for DCT - which, after 31 December 2019 (if not before), can only be the Administrator under and by virtue of the Appointment Order made on 27 September 2018.

The Administrator Ground

168.  By way of recap, the Republic applied to the Djibouti CFI on 26 September 2018, for the appointment of a provisional administrator of DCT to replace the DCT board (“Appointment Order”), in view of the dispute between the shareholders of DCT and the company. An ex parte order was made on 27 September 2018, although DCT was thereafter summoned on 11 October 2018, and submissions were subsequently filed by both DCT and the Republic before the judgment of the Djibouti CFI was issued. By that judgment, the Djibouti CFI ruled that the Court had power to make the initial Appointment Order in an expedited manner, because of the “extreme urgency that prevailed” in the case.

169.  The Djibouti CFI pointed out that pursuant to the Presidential Order made on 9 September 2018, the shares held by PAID in DCT had been transferred to the Republic, which became the majority shareholder with 66.66% of the shares in the capital of DCT. On that basis, the Djibouti CFI found that the Republic had a personal and legitimate interest in taking legal action to seek the resolution of the dispute between DCT and its co-shareholder, to fall within Article 231-3 of the Code, as a party having “a legitimate interest in the success or rejection of its claim” in the legal action taken, in respect of its request for the appointment of a provisional administrator.

170.  The Djibouti CFI rejected the argument made by DCT, that the transfer of shares between PAID and the Republic was made in violation of the provisions of the Articles of DCT and the relevant shareholders agreement. The Court held that the shareholders agreement was signed by PAID, and not by the Republic, such that the Republic was not bound thereby. The Djibouti CFI further found that the shareholders agreement had already been terminated by the Presidential Order before the Republic became a shareholder.

171.  According to the Djibouti CFI, Djibouti case law is that the Djibouti court could interfere in the management of a company when there is paralysis of the corporate body and the presence of an imminent danger for the company. Considering the conflicts which had existed between the shareholders of DCT and the fact that they “threaten the sustainability of the company” and “endanger the interests of DCT”, the Djibouti CFI found that the appointment of a provisional administrator for DCT was necessary, in order to protect the corporate interests of DCT.

172.  The decision of the Djibouti CFI was affirmed on appeal, which found that the objections based on the expedited summary procedure involved in the appointment of the provisional administrator, without notice to DCT/DPWD, were unfounded as it was authorized under the Code, and DCT had been given the opportunity to appear and to make submissions at the hearing. The Djibouti CA also found that the Republic had the capacity and right to take legal action, as it had become the majority shareholder of DCT, and the request for the appointment of administrator was in circumstances of “serious problems preventing the proper functioning of the company”, and when the Republic was in open conflict with DPWD.

173.  I can find no basis to rule that the judgments of the Djibouti CFI and the Djibouti CA on the appointment of the provisional arbitrator for DCT are wrong. The procedural complaint should be and was raised in the appeal, and it was dealt with by the Djibouti CA. The procedure adopted is not in fact dissimilar to the procedure in Hong Kong, of an ex parte order being made in circumstances of urgency, which is followed by an inter partes hearing and determination by the court after hearing both parties. I do not find the procedure to be either shocking or unconscionable to constitute a denial of the principles of natural or substantial justice.

174.  The Djibouti CFI and the Djibouti CA gave valid reasons for the making of the Appointment Order. It can easily be appreciated that the Republic had an interest in putting an end to the dispute between it (after it became the majority shareholder) and DPWD and the DCT board, as the dispute and lack of cooperation between the parties conceivably had effect on the effective operation and management of the Terminal and the port facilities of the Republic (the purpose for which DCT was set up as the joint venture company). The appointment of the provisional liquidator would have the effect of replacing the board and taking over control of DCT to ensure its continued and effective operations. Circumstances of the dispute and disruption of DCT’s operation were referred to in the judgment of the Djibouti CFI: including the dispute as to the subsistence of the 2004 and 2006 Concessions, and the passing of 18 February 2018 Resolution which authorized DCT’s commencement of legal proceedings against the Republic.

175.  The Plaintiffs complained that the Appointment Order was obtained in breach of the English Injunction which restrained PDSA, acting by itself and its “Affiliates”, from causing DCT to act on any of the Reserved Matters provided for in the JVA, which include the appointment of administrators for DCT, without the consent of DPWD. Counsel for the Plaintiffs highlighted the fact that “Affiliates” as used in the English Injunction is defined in the JVA and the Articles, and includes the Republic which was in control of the PDSA.

176.  Counsel for CMPH contended that the restraint under the English Injunction was against PDSA, acting through its directors, officers, and agents, including its Affiliates. It was highlighted that PDSA is a separate corporate entity, with shareholders. There is no evidence that the Republic was acting for PDSA, or that PDSA was “acting through” the Republic, when the application for the Appointment Order was made. The Defendant argued that there was no breach of the English Injunction.

177.  It is relevant that, as Counsel for CMPH pointed out, DPWD did not assert in the Administrator Proceedings before the Djibouti Courts that the Republic’s act of applying for the Appointment Order was in breach of the English Injunction. I accept the submissions made for CMPH, that if there was any issue as to the impropriety of the Appointment Order or of its being in breach of the English Injunction, that should naturally be raised in the Djibouti Administrator Proceedings, and in the proceedings before the English Court, as opposed to its being made the subject matter of complaint before this Court which is being asked to recognize and give effect to the Appointment Order made by the Djibouti court. Counsel for the Defendant relies on the case of Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd [2002] SGHC 176, cited at para 5.82 of Chong and Yip, Singapore Private International Law - Commercial Issues and Practice (2023). The observations made by the learned editors of Singapore Private International Law - Commercial Issues and Practice at para 5.82 were as follows:

“The relevant public policy is of course that of the enforcing forum. That the foreign public policy differs from Singapore public policy does not mean that there has been a breach of the latter. No estoppel arises from a finding by a foreign court that the judgment is against its public policy as the issue before the Singapore court would be whether the judgment is against Singapore public policy, which is a different issue from that considered by the foreign court. However, if a fact which goes towards establishing a breach of Singapore public policy should have been, but was not, raised before the foreign court, it cannot be raised at the recognition and enforcement stage (citing Wu Shun Foods Co Ltd v Ken Ken Food Manufacturing Pte Ltd [2002] SGHC 176, [2002] 2 SLR(R) 720).”

178.  In Wu Shun Foods, the Singapore Court refused to strike out an action brought in Singapore to enforce a judgment made in the Republic of China (“ROC”) for money due under a contract for sale and purchase of goods, on the alleged ground that the underlying contract for the import of the goods into ROC was illegal under ROC law. The issue of illegality had not been raised in the ROC proceedings. The Singapore court explained the rationale on the basis that it was not an appellate tribunal vis-à-vis the judgment of the ROC court, and the party should not expect that it omission in raising the illegality issue before the ROC court could be made good in the Singapore courts.

179.  Counsel therefore contended, on behalf of CMPH, that since the Plaintiffs in this case had never even raised the alleged breach of the English Injunction to oppose the Djibouti court’s making of the Appointment Order, they should not be permitted to use the back door approach referred to by the Singapore court in Wu Shun Foods, in an attempt to prevent enforcement of the Appointment Order in Hong Kong, as the Hong Kong court does not sit on appeal from the Djibouti court.

180.  I accept CMPH’s submission and in all the circumstances of this case, I do not consider that the Appointment Order should be refused recognition and enforcement. It is of course open to the Plaintiffs to seek the English court to enforce its injunction in any way as may be appropriate against PDSA, and any Affiliate which may have been in breach thereof.

Effect of the Appointment Order

181.  On CMPH’s case, whether the directors of DPWD have authority to act on behalf of DCT in these proceedings is a question of Djibouti law governing the internal management of a company incorporated under the laws of Djibouti, the power of its directors, and the appointment of the Administrator in Djibouti. Additionally, the relationship between Deacons as the solicitors and agents in Hong Kong and DCT as its principal in the conduct of the Hong Kong proceedings is a matter of agency governed by Hong Kong law, being the law which has the closest connection with the contract of agency and with the act in question (Presentaciones Musicales SA v Secunda [1994] Ch 271).

182.  Counsel for CMPH contended that the appointment of a provisional administrator under Djibouti law is similar to the position of the dissolution of a company and the appointment of a provisional liquidator upon such dissolution, at common law. The directors are divested of their powers, which powers are conferred and thereafter exercisable by the provisional liquidator. The actual authority of all agents of a company is terminated upon dissolution of a company, and those agents who derive their authority from the directors would cease to have any authority to further represent the company. In support of these common law propositions, Counsel cites Bowstead & Reynolds on Agency (23^rd edition, 2023) paras 10-015, 10-018 and Lightman & Moss on the Law of Administrators and Receivers of Companies (6^th edition) para 2-055.

183.  According to CMPH’s experts, the position of a provisional administrator is the same under Djibouti law. The Appointment Order refers to the dispute and conflict between the shareholders of DCT “which may hinder the effective operation of DCT” and states the appointment of Tadoral as provisional administrator “with the mission of exercising the authority granted by law to the management bodies of (DCT)”. The Appointment Order states expressly and specifically that “the provisional administrator will replace the Board of Directors” pending the resolution of the crisis, and that the Appointment Order was enforceable immediately, notwithstanding any appeal or opposition.

184.  The Plaintiffs contend that even if this Court should recognize the Appointment Order as a valid order made by the Djibouti court, the Appointment Order does not by itself divest the DCT directors of all their powers, and the Administrator was not the only person who could authorize the continuation of these proceedings in Hong Kong. Counsel highlighted the fact that the Appointment Order is only an interim order, of temporary effect, pending the resolution of the alleged crisis, and that the Administrator is only a “provisional” one.

185.  It was also contended that the appointment only applies prospectively and takes effect only from the date of the Appointment Order, from 27 September 2018. The Plaintiffs’ expert pointed out that there is no express provision in the Appointment Order that it has any retrospective effect, which provision is required under French law and which Djibouti law follows.

186.  Due to the temporary nature of the Appointment Order, the Plaintiffs further contend that the powers given to the Administrator are more limited than those of the governing body of DCT, and only cover “conservatory measures” and “administrative measures” (according to their expert’s opinion), and that these essentially comprise day to day acts of administration. It was argued that the Administrator could not make decisions or take serious measures that would constitute disposal of the assets of the company, or have “irreversible impact” on DCT or its assets, such as giving up a valuable legal claim as that asserted in these proceedings. It was emphasized that the Administrator herself has not, to date, taken any positive steps to overturn the authorization given by the 18 February 2018 Resolution, or otherwise intervened or taken part in these proceedings. The Plaintiffs highlighted the fact that the Administrator had in fact declined CMPH’s invitation to intervene in this action, and had stated her stance in her letter dated 26 August 2020 to CMPH’s former solicitors (“26/8 Letter”), citing the following:

“Lastly, with regard to my possible participation in the proceedings underway in Hong Kong, as I point out above, the task entrusted to me is provisional and interim in nature. It is incumbent upon me to safeguard the corporate interests of (DCT) and to such end to substitute myself for the board of directors of the company in order to take any management-related decisions which may be necessary; it is not my task to take any decisions which might give rise to considerable costs being incurred by the company and which might be assimilated to a disposal.

This is the reason why I am of the opinion that my intervention in the proceedings ongoing before the Hong Kong courts is not desirable on the date hereof and I believe in any event that it is not in the interests of (DCT) to participate therein. …” (Emphasis added)

187.  Since the Administrator has not taken any steps to overturn Deacons’ authorization based on the 18 February 2018 Resolution, it was contended for the Plaintiffs that the existence of the Appointment Order would not on its own negate the authority previously conferred on Deacons. Counsel for the Plaintiffs pointed out that even the Administrator herself did not consider her powers to be “unlimited”. In her 26/8 Letter, she acknowledged that it was not for her “to make decisions which would constitute a disposal” (of DCT’s assets).

188.  The opinion of CMPH’s expert (in Fage 2) is that:

“The appointment of a provisional administrator has the effect of divesting the directors of the powers of management and legal representation of the company. These powers, which include all authority to bring, defend or continue any action or legal proceedings in the company’s name, are then transferred and divested to the provisional administrator. All of the director’s powers and authorities will cease upon the appointment of the provisional administrator and are brought to an end until the provisional administration is terminated.”

189.  CMPH’s expert on Djibouti law expressed the similar view:

“… The appointment of a provisional administrator results in the suspension of all the powers of the directors of the company. The provisional administrator, vested with the powers that the law confers on company directors, will then have to manage the company in place of the managers/directors for a specified period of time.”

190.  CMPH highlights the fact that the Appointment Order is a judgment in rem, which the Hong Kong Court would recognize and give effect to so long as the Djibouti court has competent jurisdiction over the matter and DCT is incorporated under the laws of Djibouti. Counsel submitted that the Appointment Order which divests the powers of the board, operates ipso facto to revoke the authority of agents appointed by the board to act on behalf of DCT, such as Deacons (Lightman & Moss, para 2-055, Pacific & General Insurance Ltd (in liq) v Home & Overseas Insurance Co Ltd [1997] BCC 400, 408E-H, and Ashborder v Green Gas [2005] EWCA Civ 619, paras 5-7). Once the directors appointing the solicitors are divested of their powers, the authority of the solicitors as the directors’ agent likewise would cease.

191.  There can be no dispute that the powers of the provisional administrator are defined by the order of appointment made by the court. In this case, the mandate and powers of the Appointment Order are wide and general: to replace the board of directors, and to exercise the authority granted by law to the management bodies of the company. Although it is expressed to be an appointment and replacement of the board “pending the resolution of the crisis”, it is clear on the evidence that the dispute and crisis which prompted the making of the Appointment Order has never been resolved, even to date.

192.  Whether the Administrator has power or authority to do an act, and whether the Administrator exercised her power or authority in a manner which is not in the interests of the company, or in breach of her duties, are different matters.

193.  As Counsel for CMPH pointed out, the principal argument made by the Plaintiffs’ expert is that since the appointment of a provisional administrator does not have retrospective effect, there is no need for the Administrator to authorize Deacons to continue to act, because the firm’s “prior authorization remains untouched by the mere fact of the administrator’s appointment” (para 42 of Stoffel-Munch 2). By arguing that the Administrator’s powers are only conservatory and administrative, without any power to “dispose of” DCL’s assets or claims in these proceedings, the contention made for the Plaintiffs is that the Administrator has no power to discontinue or withdraw the Hong Kong proceedings as this may have irreversible impact on DCT, and may even constitute a breach of the Administrator’s duties to DCT.

194.  Even if the Appointment Order does not have any retrospective effect, to “nullify” the initial commencement of these proceedings, I cannot agree that upon the making of the Appointment Order, Deacons’ authority to act for DCT can remain unaffected. When the Appointment Order came into effect, the board of directors was replaced by the Administrator by and under the express provisions of the Appointment Order. Being vested with “all the authority and power granted by law to the management body” of DCT, the Administrator thereafter has the power and authority to act for DCT in place of the board, and to exercise the authority and power vested in the board.

195.  In the absence of any express authorization by or delegation of authority from the Administrator, I accept the submissions made for CMPH that, after the Appointment Order of 27 September 2018, the DPWD Directors and Deacons instructed by them had no further authority to act or take any further step in the Hong Kong proceedings on behalf of DCT. For each step taken after the Appointment Order, Deacons had to seek confirmed instructions and authority from the Administrator, because Deacons’ principal, the DPWD directors who were themselves mere agents of DCT, had no further authority or power after the Appointment Order to delegate to, or authorize, their own agents to act for DCT. These steps which require further and proper authority must include the steps taken (after the date of the Appointment Order) to resist CMPH’s application (in December 2018) for stay of these proceedings, appeals therefrom, steps taken in relation to the Authority Summons and the ASI Summonses, and all other substantive steps in the Hong Kong proceedings after 27 September 2018.

196.  The Plaintiffs seek to rely on the 26/8 Letter from the Administrator, to show that she was not prepared to intervene in the Hong Kong proceedings. That cannot mean that Deacons continued to have her authority and consent to continue and pursue the proceedings on behalf of DCT. This was made clear in the 26/8 Letter itself, when the Administrator clearly stated that (despite the challenges to her appointment made by DPWD and the DCT board) she was the “sole duly appointed statutory representative of DCT”, and that none of the former members of the board of DCT was authorized to represent DCT in the context of the Hong Kong proceedings. The Administrator then stated:

“I have furthermore given no instructions to either the firm of Deacons or the firm of Quinn Emanuel Urquhart & Sullivan to represent DCT in the context of any proceedings in Hong Kong. Neither Mr Al Banna nor any one of the former members of the Board of Directors or the former management of DCT has furthermore sought and obtained any approval or authorization from me to instigate any judicial or arbitral proceedings, either in Hong Kong or in any other location, since my appointment on 27 September 2018. The same is true of the firm of Deacons and the firm of Quinn Emanuel Urquhart & Sullivan LLP, so I am unable to understand how they can claim to be representing DCT before the Hong Kong courts.”

Although the Administrator did state in the 26/8 Letter that her task is provisional and interim, and not to make decisions which might amount to a disposal of assets of DCT, the Administrator did continue to state, unequivocally:

“DP World and its counsel must therefore immediately desist from participation in any judicial proceedings in the place and instead of the sole statutory representative of this Djibouti Company and more generally desist from using DCT as a tool for their entirely personal reasons.”

197.  Having been appointed to replace the board, if the Administrator considered that she did not have any power under the Appointment Order to take any step which might fall outside the scope of the daily administration of DCT, or may amount to a disposal of its assets or rights of action, the Administrator must be able to apply to the Djibouti court to authorize such steps, or for any directions as may be required.

198.  The Plaintiffs claim that there might be a state of limbo if, as the Djibouti law expert of CMPH suggests, the instructions from the original directors to Deacons are “suspended”, and the Administrator or any liquidator fails to respond to or take actions in the proceedings for a prolonged period of time.

199.  In my judgment, in such a scenario, and in any case in which DPWD or the directors appointed by DPWD to the board of DCT consider it necessary and in the interests of DCT to do so, they can and should be able to apply to the Djibouti Court for the necessary direction to be given to the Administrator, to authorize any act claimed to be necessary for and in the interests of DCT. The report of the Plaintiffs’ expert stated that a provisional administrator could not take measures that would dispose of the assets of the company, or which may irreversibly impact the company’s assets, “unless specifically authorized by the court”. This shows that the court’s authorization can be sought for any measures or actions to be taken by the Administrator.

200.  However, in the absence of any instructions from the Administrator, I do not accept that Deacons can simply and without risk of challenge continue to act indefinitely, on the basis of the initial authority conferred by the board of DCT in reliance on the 18 February 2018 Resolution. They would simply have to cease acting for DCT for the reason that after 27 September 2018, they no longer had the authority or instructions from the authorised representative of DCT to continue with the conduct of the proceedings, and had not received any instructions from the authorised representative of DCT.

201.  In my judgment, the argument that the Appointment Order has no retrospective effect before 27 September 2018 cannot mean that Deacons can continue to act after 27 September 2018, or that they can continue automatically and indefinitely to take steps in these proceedings in the name of DCT, or to act indefinitely on the basis of the instructions and authorization given in February 2018.

The July 2023 Resolution and its effect

202.  The Administrator Order was made on 27 September 2018.

203.  By its judgment of 31 December 2019, the Djibouti CFI declared Article 42A of DCT’s Articles and the voting mechanism thereunder to be null and void on the ground of public policy, and the 18 February 2018 Resolution to be null as it amounted to performance of an illegal agreement.

204.  On the Plaintiffs’ case, a shareholders’ resolution was passed at DCT’s EGM on 17 July 2023 (“July 2023 Resolution”). The EGM was convened by DPWD, replying on Article 30.3(iii) of DCT’s articles. This provides that general meetings of the company may be called by “one or more Shareholders holding at least one tenth of the Capital of (DCT)”. On the Plaintiffs’ case, it was a measure taken out of prudence, aimed at putting to rest any possible argument that may arise over the validity of the legal proceedings, and the effect of the Appointment Order. The July 2023 Resolution confirmed that:

“ … the legal proceedings before the Hong Kong courts initiated by (DCT) on 20 August 2018 against (the Defendant) (action number HCA 1951/2018 “HK Action”) were, have been, and continue to be duly authorized by (DCT), and that (DCT)’s solicitors in the HK Action, Deacons, were, have been, and continue to be fully authorized to represent (DCT) in the HK Action until final determination of the claims therein (including any appeals).”

205.  According to the Plaintiffs, the July 2023 Resolution has the effect of reconfirming Deacons’ authority to act on behalf of DCL in these proceedings.

206.  CMPH’s case is simple: convening a general meeting is a matter of management which falls within the responsibility of the board, and upon the appointment of the Administrator, this power was divested from the board to the Administrator, such that the EGM convened by DPWD in July 2023 was invalid. CMPH argued that in any event, the notice of EGM should have been, but was not served on the Republic, which had by then already become a shareholder of DCT by virtue of nationalization, and the shares of PDSA had been transferred to the Republic as a result.

207.  CMPH further claims that Article 30 (iii) is void as it is contrary to public order.

208.  Having considered the expert evidence filed on behalf of the parties, I am more inclined to accept CMPH’s case, that the July 2023 Resolution is ineffective.

209.  The EGM at which the July 2023 Resolution was passed was convened by DPWD in its capacity as shareholder holding more than one-tenth of the capital of DCT, pursuant to be Article 30.3 (iii).

210.  As pointed out by Fage in his expert report, Article 225-103 of the French Civil Code provides (in paragraph I) that the general meeting of a company “shall be convened by the board of directors or the management board”.

211.  Article 225-103 goes on to provide, as follows:

“II. Failing that, the general meeting may also be convened:

1. By the auditors;

2. By an agent, appointed in court, at the request, either of an interested party in the event of urgency, or of one or more shareholders representing at least 5% of the share capital or by an association of shareholders in accordance with the conditions set in article L. 225-120;

3. By the liquidators;

4. By the majority shareholders in capital or of voting rights after a public takeover bid or exchange offer, or after the transfer of a controlling block…”(Emphasis added)

212.  The same provisions exist under the Djibouti Commercial Code, in Article 315-78 (paras 119 and 121 of Fatouma 5).

213.  According to Fage’s expert opinion, the above provisions of the French Code are mandatory, are provisions of public order, and cannot be contracted out of. He explained that this is demonstrated by the express language of Article 255-103, and contrasted with paragraph V of the same article, which permits and expressly provides for provisions to be made to the contrary in a company’s articles of Association. Paragraph V states as follows:

“V. Unless otherwise provided in the Articles of Association, shareholders’ meetings shall be held at the registered office or anywhere else within the same district.”

214.  Fage pointed out that no qualification appears in paragraph II of Article 225-103 which governs the means of convening a general meeting, in the event that the board fails to do so. According to Fage, the inference is that the means provided for under paragraph II are exhaustive. He accepted that there is no decision of the French courts as to whether Article 225-103 is of public order, but pointed out that the majority of legal scholars support his view. The scholars state the view that Article 225-103 II provides for “exhaustive” derogations to the default rule set out in paragraph I, that the provisions are of “mandatory nature”, and as a rule excludes the possibility of contrary provisions in the articles of association of a company, which allow for a group of shareholders representing a proportion of the capital to directly convene a general meeting.

215.  The Plaintiff’s’ expert disagree that Article 225-103 is a provision of public order. Stoffel-Munck pointed out that paragraph II does not state that the means are exhaustive, and the language used does not state that the general meeting may “only” be convened by the means set out. He further pointed out that the articles of association of DCL increase and extend the rights of the shareholders, rather than reduce their rights, (in that Article 30.3 (iii) serves to grant shareholders the additional right of convening a general meeting directly without the appointment of a legal representative) such that they should not be considered to fall foul of or be against any rule of public policy intended for the protection of shareholders.

216.  The Plaintiffs’ expert relies on the general statement of French and Djibouti law, that the general meeting is “the highest decision making organ” of a public limited liability company, and that decisions made at general meetings bind all other organs of the company, including the board of directors and, in this case, the Administrator. However, Fage referred in his opinion to what is referred to as the Motte decision made by the French Court of Cassation in 1946. This establishes the familiar principle, that:

“A joint-stock company is a company whose bodies are hierarchical and in which the administration is exercised by a board elected by the general meeting; that it is therefore not for the general meeting to encroach on the prerogatives of the board in matters of administration.” (Emphasis added)

Fage explained that the Motte decision highlights the fact that there is “a clear and precise division of the respective areas of competence between each corporate body”, and that notwithstanding Stoffel-Munck’s focus on shareholders’ meetings being “the highest bodies in the hierarchy of powers of joint-stock companies”, the recognized and correct statement of principle is that shareholders only have power to make decisions that do not fall within the powers conferred by law on the administrative, management or supervisory parties. Shareholders’ meetings therefore cannot encroach on the powers legally conferred on the company’s management parties, and according to Fage, this is in accordance with the principle of hierarchy of bodies as defined by the Motte judgment.

217.  Stoffel-Munck accepts that the court in Motte confirmed that the articles of association of a company may not grant to the shareholders by general assembly powers that are exclusively reserved by mandatory law for the board of directors. He pointed out that in Motte, the shareholders wanted to create an executive committee whose powers were meant to compete with the exclusive rights that statutory law granted to the board of directors, and the Court ruled that that was not possible, but confirmed that the articles may grant to the general assembly “a specific power that was not exclusively attributed to the board of the company”.

218.  With these principles in mind, I accept CMPH’s contention that a company’s authorization of legal representatives to act for it in legal proceedings is not a matter for the general meeting of shareholders. This is irrespective of whether or not Article 225-103 of the French Code is of public order, and whether or not Article 30.3 (iii) of DCL’s Articles is contrary to Djibouti public policy.

219.  I accept Fage’s opinion that the power to convene a general meeting is a matter included in the day to day management of a company, and in principle, a matter which falls within the responsibility of the board of directors. In the case of DCT, the powers of the board of directors had been given to and vested in the Administrator under the Appointment Order, and after the Appointment Order, only the Administrator exercising the powers of the board had the power to convene a general meeting.

220.  In Fage 2, he cited a decision of the French Court of 22 June 2011, involving the appointment of a provisional administrator to replace a manager of a company. During the currency of the administration, a general meeting was purportedly called by a shareholder, and a co-manager was appointed to file an appeal against a conviction of the company. The Court held that the co-manager had no standing to act, since it was the provisional administrator who was vested with the power of administration, direction and representation of the company, and the appointment of a co-manager by the general meeting of the corporation was inoperative.

221.  Stoffel-Munck sought to argue that the shareholders of DCT by general meeting had been granted the exclusive power to decide on “Reserved Matters” which include the authorization of legal representatives to act for DCT. Article 11.1 of the JVA provides for “Reserved Matters”, and paragraph (i) thereof refers to the “initiation or settlement” of any legal or arbitration proceedings or dispute with a value reasonably estimated to be in excess of a defined value.

222.  However, I agree with Counsel for CMPH, that DCT’s shareholders had not by agreement allocated to the general meeting any exclusive power to decide on the Reserved Matters, and in particular, on the general conduct of legal proceedings.

223.  As Counsel for CMPH pointed out, both the board and the shareholders by EGM of DCT have powers in relation to the stated Reserved Matters. Article 23 of DCL’s articles of association provides that “the board shall have the power to determine all Reserved Matters” (as defined). Article 41.2 provides that “the Shareholders at the Extraordinary General Meeting can decide on … (xv) All other matters stated as being Reserved Matters”.

224.  For matters requiring resolution by the EGM, DCT’s articles only identified: the increase of capital, issuance of bonds, increase in the number of directors, and nomination of auditors. There are also Reserved Matters which must be decided by the EGM because a resolution by the board on such matters would be unenforceable under Djibouti law (as provided for in article 21.5).

225.  Pertinently, no one has given any evidence that the general institution or commencement of legal proceedings, or taking steps in such legal proceedings, are matters which would be unenforceable under Djibouti law in the absence of a resolution in general meeting.

226.  I agree and accept the proposition made for CMPH that the provisions of the JVA and DCT’s articles of association (namely Articles 8.5 (c) and 11 of the JVA, and Articles 21 and 23 of the Articles of Association) only grant to DPWD and its nominated directors veto rights in respect of the matters defined as Reserved Matters. Under these provisions, a resolution will only be deemed to be passed, if the directors nominated by DPWD have voted in favor of the resolution, and the shareholders only agreed to procure that. Article 21.5 of the articles of Association state:

“21.5 Valid Resolutions of the Board (…)

ii. in relation to Reserved Matters, the Shareholders hereby agree and undertake that they shall make best endeavours to cause their nominee Directors (whether a meeting or by circulation or by teleconference) to abide by the following procedures, subject to the provisions of Applicable Laws: (…)

b. if such a resolution of the Board in relation to a Reserved Matter procured in compliance with paragraph (i) above is not enforceable under Applicable Laws without a resolution passed at a Shareholder’s Meeting, then the proposal of the Board of Directors on such Reserved Matter shall be referred to a Shareholders’ meeting (…)”

227.  Article 9.3 (a) of the JVA provides for similar rights at the level of shareholders’ meetings.

228.  Fage explained (in Fage 4) that on a proper construction of the articles, the Reserved Matters are a shared competence of the Board of directors and of the EGM. Although DPWD as shareholder was given the right to veto and withhold its consent to any decision on Reserved Matters, the provisions of the articles and the JVA do not in fact grant to DPWD or the general meeting any exclusivity to decide on the Reserved Matters. On the language expressly used in the relevant provisions, I agree. The effect of the articles is simply to confer a right of veto on DPWD.

229.  In my judgment, after the date of the Appointment Order, the Administrator replaced the board of directors (under and by virtue of the express provisions of the Appointment Order), and thereafter had the power to exercise the authority granted by law to the board. As the French Court pointed out in the decision of 22 June 2011, after the appointment of an administrator, it is the administrator who is vested with the powers of administration, direction and representation of the company. The powers of administration and direction included the general conduct and management of legal proceedings commenced in the name of DCT, on day to day basis, and the appointment and authorization of legal representatives to act in the name and on behalf of DCT in such proceedings. The shareholders had no power to usurp the right of the board of directors and the Administrator in its place. DPWD as shareholder had no right or power to convene the EGM nor to pass the July 2023 Resolution. What DPWD could have done was to request the Administrator to convene a meeting to resolve the authorization of Deacons to take further steps for DCL in these proceedings, or to apply to the Djibouti court for appointment of an agent to convene a general meeting if that was what DPWD required. None of this was done.

Conclusion on the Amended Authority Summons

230.  For all the reasons stated above, I find that the continuation and conduct of these proceedings were without the authority of DCT after the appointment of the Administrator, and further allow the Defendant’s application in terms of paragraphs 2, 4, 5 and 6 of the Amended Authority Summons.

The ASI Summonses

231.  Paragraph 40 of this Decision sets out the position of the parties in relation to the ASI Summonses. The matter outstanding is the costs of the applications and their opposition. The 1^st Djibouti Action has come to an end, and there is no need for any injunction. The Defendant further undertook on 1 December 2023 that it would withdraw or apply for a stay of the 2^nd Djibouti Action, and would not rely on any judgment of the Djibouti court for the hearing of the Authority Summons.

232.  The hearing of the Authority Summons and the ASI Summonses has been burdened by voluminous affidavits and written submissions, with a myriad of issues raised for determination. This is partly reflected by the unusual length of this Decision, which deals with only the major and more pertinent issues raised and argued by Counsel. Although the parties have ultimately devoted relatively little time at the hearing on the ASI Summonses, lengthy submissions had been filed to deal with the necessity for the injunctions and on the question of costs, which in turn evolved around the merits of the applications.

233.  I wholeheartedly endorse the observations made by the courts in the decisions of Po Fun Chan v Winnie Cheung (2007) 10 HKFRAR 676 paras 18-21, R v Holderness Borough Council, ex p James Robert Developments Ltd (1992) 66 P&CR 46, 57, and Ersus v London Borough of Redbridge [2016] EWHC 1025 (QB). When a matter is no longer pursued by parties because it is unnecessary or has become academic to do so, it is highly inappropriate and a misuse of the court’s time and public resources to ask the court to decide on costs by dealing with the merits in depth, at a time when the courts are already overburdened, as they are.

234.  In Po Fun Chan, Bokhary PJ stated that a case which has become academic as between the immediate parties should normally proceed no further, and any issue as to costs should be dealt with only “on such an appreciation as can be formed on a broad view of the matter”.

235.  In R v Holderness Borough Council, Simon Brown LJ expressed a similar sentiment with regard to the approach to such costs applications:

“… I would hold to what I said there, namely that “That ordinarily would be a gross misuse of this court’s time and further burden its already over-full list. Not only, moreover, is there the problem of pressures upon the court’s time….I recognise of course that costs applications have to be entertained and resolved. But not, I would suggest, by litigating the case for all the world as if the substantive issues need to be resolved for their own sake. In my judgement an altogether broader approach should be adopted. One which enables the court in a comparatively short time to decide, and decide moreover without giving a fully reasoned judgment, into which general category of discontinuance the case falls.”

236.  Dillon LJ further stated in the same case:

“There may be cases where the substantive question raised in proceedings becomes academic at a very early stage, when the costs incurred by the plaintiff are small. It may then be felt to be unreasonable for the plaintiff to incur the expense and delay of going to a full trial on that academic question, in order to recover the costs. In such a case the court may have jurisdiction to refuse to try the case.”

237.  In Ersus v London Borough of Redbridge, the observations made by Superstone J were as follows:

“In determining this appeal, I have had regard to the following principles. First, as to the ambit of the costs enquiry in the lower court on discontinuance, in R v Liverpool City Council ex p Newman [1992] 5 Admin LR 669, Simon Brown J (as he then was) said at page 671:

‘It would seldom be the case that on discontinuance this court would think it necessary or appropriate to investigate in depth the substantive merits of what had by then become an academic challenge. That ordinarily would be a gross misuse of this court’s time and further burden its already over-full list.’

More recently, in the R (on the application of Scott) v London Borough of Hackney [2009] EWCA Civ 217, Hallett LJ observed that:

‘It will rarely be proportionate to enter into an overtly detailed forensic analysis of the issues and the evidence and assessment of which party would have won or lost on which issue. The discretion is a broad one, and it is exercised in broad fashion.’”

238.  I will accordingly deal with the residual issue of costs as to the ASI Summonses on a broad view of the case, without any in-depth investigation of the substantive merits.

239.  The facts I take into consideration include the following:

(1) The Hong Kong courts have held in this case that Hong Kong is the appropriate forum for the current dispute between the parties. There is no further doubt as to the jurisdiction of the Hong Kong court over all the issues raised in the action.

(2) CMPH itself issued the Authority Summons on 28 February 2023, to seek from the Hong Kong court an order to strike out DCT’s claims for want of authority. It recognises the jurisdiction of this court over the dispute as to authority.

(3) It was only after the issue of the Authority Summons that CMPH applied to the Djibouti Court (by the Djibouti Summons) (and later the 2^nd Djibouti Action) to seek relief from the Djibouti court, to require the DPWD directors to cease giving instructions to Deacons and to cease representing DCT in these Hong Kong proceedings. The Plaintiffs claim that the Djibouti proceedings were vexatious, oppressive and instituted in bad faith, since the Djibouti Summons and the Authority Summons involved the same issues and sought essentially the same relief, from the different courts.

(4) The 2^nd Djibouti Action was an extension of the 1^st Djibouti Action, arising out of the same facts and involving the same issue of authority. The only material difference lies in the fact that the Djibouti Summons in the 1^st Djibouti Action seeks interim injunctive relief, whereas the Writ filed in the 2^nd Djibouti Action seeks final and substantive relief, including damages which CMPH claims it had to preserve from being time-barred.

(5) CMPH claims that the above-described steps taken in Djibouti were only as a result of DPWD’s attempt to convene a general meeting of DCT for the purposes of passing the Proposed Resolution (and the later July 2023 Resolution).

(6) The Plaintiffs claim that the ASI were required to protect the Plaintiffs’ legitimate interest to have the authority issue properly determined in Hong Kong.

(7) The Plaintiffs further claim that at the time when the 2^nd Djibouti Action was commenced, CMPH was already subject to the 28 July HK Order, whereby it was restrained by the Hong Kong Court from taking any steps to pursue the proceedings commenced by the Djibouti Summons, and from commencing any other proceedings in Djibouti or elsewhere in respect of the issue of whether these proceedings were instituted without authority.

(8) CMPH on its part claims that orders from the Djibouti court in the jurisdiction where DCT was incorporated would only assist the Hong Kong Court in its determination of the status of DCT, the validity of the July 2023 Resolution and the authority of the DPWD appointed directors and Deacons. It claims that Djibouti is the natural forum for the issues raised in the Djibouti proceedings and it had a legitimate interest in having the authority issue, which is governed by Djibouti law, to be determined by the Djibouti court.

(9) CMPH maintains that there is no exclusive jurisdiction agreement governing the relationship between the parties, and further, pointed out that the Plaintiffs themselves have litigated matters in Djibouti, by intervening in the Articles Proceedings, challenging the appointment of the Administrator, and appealing to the Djibouti Supreme Court in the relevant proceedings.

(10) The Plaintiffs claim that the Defendant failed to disclose to the Hong Kong Court, at the time of the 28 July HK Order, that it had already commenced or was in the process of serving the Writ in the 2^nd Djibouti Action. On its part, CMPH claims that it had no duty to make such disclosure, and it was not in a position to stop the Bailiff in Djibouti from serving the Writ. CMPH further claims that the disclosure would have made no difference, when the 28 July HK Order already contained a general prohibition against the commencement of other proceedings.

240.  CMPH having issued the Authority Summons to seek determination by the Hong Kong Court of the issue raised, I agree that it was unnecessary and a duplication for the Djibouti applications to have been made. In all the circumstances, the Hong Kong Court would have continued the ASI granted until the determination of the Authority Summons, but for the fact that the injunctions had become unnecessary. The 1^st Djibouti Action had come to an end. CMPH had also undertaken at the hearing before the Hong Kong Court in December 2023 that it would apply for a stay of the 2^nd Djibouti Action, and that it would not rely on or refer to any judgment of the Djibouti Court which may arise from the 2^nd Djibouti Action for the purpose of the hearing of the Authority Summons in Hong Kong. Essentially, the Plaintiffs established a prima facie entitlement to the ASI (apart from the question of DCT’s authority).

241.  In all the circumstances of this case, I would order that the costs of the ASI Summonses should be borne by CMPH. However, I accept the submissions made for CMPH that by 3 August 2023, the Plaintiffs already had knowledge of the Djibouti Interim Decision (of 31 July 2023), and yet they obtained directions for the filing of evidence, and in fact filed extensive evidence in reply on the 1^st ASI Summons. I will not allow any costs of the 1^st ASI Summons incurred after 3 August 2023, as they were unreasonable and disproportionate.

242.  As events transpired, the hearing and determination of the ASI Summonses took place at the same time as the Authority Summons. The costs of the ASI Summonses incurred for DCT would be affected by the costs order made on the Amended Authority Summons.

243.  All costs orders are made with Certificate for 3 Counsel, and include costs of the relevant applications as were reserved.

Mr Paul Shieh SC, Ms Sara Tong SC and Ms Astina Au, instructed by Deacons, for the 1^st to 3^rd plaintiffs

Mr Benjamin Yu SC, Mr Law Man-Chung SC and Mr Danny Tang, instructed by Reed Smith Richards Butler LLP, for the defendant

HCA 1951/2018

[2025] HKCFI 3208

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1951 of 2018

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D E C I S I O N

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1.  This Decision is for determination of the 1^st and 3^rd Plaintiffs’ application for leave to adduce the 9^th affidavit of Isabelle Michou (“Michou 9”). This followed a hearing in March 2025 of (inter alia) the Defendant’s summons to strike out the claims of the 3^rd Plaintiff in this action, for want of authority (“Authority Summons”), when the hearing was adjourned. The adjournment was as a result of the Plaintiffs’ service of the 8^th affidavit of Isabelle Michou (“Michou 8”) shortly before the hearing on 3 March 2025, and by the Court’s order dated 4 March 2025 (“4/3 Order”), leave was granted to the Defendant to file evidence in response to Michou 8. Pursuant to such leave, the Defendant filed the affidavit of Aurelie Lopez (“Lopez 1”) and the 7^th affirmation of Mohamed Abayazid (“Abayazid 7”) on 15 April 2025.

2.  The Authority Summons issued in these proceedings relates in essence to the question of whether the Hong Kong Court should refuse recognition of an order made by the Djibouti Court of First Instance for the dissolution of the 3^rd Plaintiff (“Dissolution Order”). The 3^rd Plaintiff had appealed to the Djibouti Court of Appeal against the Dissolution Order (“Dissolution Appeal”), and shortly before the hearing of the Authority Summons in March 2025, the Djibouti Court of Appeal (“Djibouti CA”) dismissed the appeal (“CA Judgment”). The Plaintiffs sought to rely on Michou 8 at the hearing in March 2025, for the purpose of showing that there was manifest unfairness and lack of due process leading to the CA Judgment. By the 4/3 Order, leave was granted to the Plaintiffs to do so, and out of fairness to the Defendant, the Court granted time to the Defendant to respond to the evidence in Michou 8, resulting in the adjournment of the hearing.

3.  Lopez 1 filed by the Defendant set out the account given by the Defendant’s lawyer of the Dissolution Appeal, to show that the proceedings before the Djibouti CA had been conducted fairly and that the 1^st Plaintiff had been given ample opportunity to make submissions. Abayazid 7 set out the Djibouti law on service and when time commences to run for appeals, to establish that the Djibouti Judgment is correct in law.

4.  On 27 June 2025, the Plaintiffs issued their summons for leave to adduce Michou 9 (“Plaintiffs’ Summons”), explaining that this was necessary in order to correct “patent errors and omissions” in Lopez 1 and Abayazid 7, which purported to set out events leading up to and concerning the dismissal of the Dissolution Appeal. By Michou 9, the Plaintiffs seek to adduce evidence from a lawyer of the 1^st Plaintiff (Camille Kamil (“Camille”)) who was present at the hearing of the Dissolution Appeal before the Djibouti CA. The Plaintiffs contend that whereas Lopez 1 and Abayazid 7 set out largely hearsay evidence on the Dissolution Appeal, based on a one-sided and incomplete account of the Djibouti proceedings, Camille has personal and first-hand knowledge of the conduct of the Dissolution Appeal, and her evidence is material to the Court’s decision on whether the Dissolution Order should be recognized. It was pointed out that neither Lopez nor Abayazid was present at the hearing before the Djibouti CA, but they had made assertions on the hearing and exhibited documents which were not produced before the Djibouti CA in order to support the correctness of the CA Judgment.

5.  According to the Plaintiffs, Camille represented the 1^st Plaintiff in the Djibouti courts, and her evidence set out in a letter dated 23 June 2025 from her (“Camille Letter”) contains her personal and direct account of what had transpired before, leading up to, and at the hearing before the Djibouti CA, to show the “highly abnormal and unusual manner” in which the Dissolution Appeal was handled by the Djibouti CA. On the basis of the evidence contained in the Camille Letter, the Plaintiffs claim that the Djibouti CA made its decision to dismiss the Plaintiffs’ Dissolution Appeal, in the absence of the 3^rd Plaintiff, without hearing submissions from the 3^rd Plaintiff, and allowing only the Public Prosecutor to file submissions and new evidence without adversarial debate as requested by the 1^st Plaintiff, all in breach of adversarial principles applicable under Djibouti law.

6.  In addition to adducing the Camille Letter, Michou 9 points to what are said to be material omissions in the Defendant’s account of the requirements for service abroad under Djibouti law, which were raised by the Defendant for the first time in Lopez 1 and Abayazid 7 when they referred to Article 687-2 of the French Code of Civil Procedure. According to those provisions, there is deemed service of documents where service has not been possible, or no information is available from the foreign authorities on service. According to the Plaintiffs, the Defendant’s evidence failed to point out that for there to be deemed service, it is necessary to prove that there had been attempted service. This question of service pertains to the service of the Dissolution Order, and whether the Djibouti CA’s decision that the Dissolution Appeal was out of time is erroneous.

7.  On the Plaintiffs’ case, therefore, Michou 9 contains important aspects in the evidence, as it is necessary for the Hong Kong Court to have a complete and accurate picture of how the Dissolution Appeal was conducted, as well as of the relevant rules under Djibouti law as to service, for a decision to be made on whether the Dissolution Order is contrary to public policy, and/or obtained in breach of rules of natural justice, such that the Hong Kong Court should not give effect to it.

8.  On the Defendant’s part, Counsel argued that when the Plaintiffs had at the March hearing asked for leave to file evidence in response to the reply evidence to be filed for the Defendant after the adjourned hearing, the request had already been rejected by the Court on the basis that the Plaintiff should have included all the relevant facts in Michou 8 which they sought to adduce just before the March hearing. The Defendant claims that by the Plaintiffs’ Summons, they are seeking to do the very thing which the Court had indicated should not be done. The Defendant contended that the Plaintiffs’ Summons should be dismissed because it was a late application, with no good reason shown for the delay, causes prejudice to the Defendant, and does not satisfy the Ladd v Marshall conditions which should apply on the facts of this case and in particular on the basis of what transpired at the March hearing.

9.  Counsel for the Defendant contended that if the evidence from Camille on the procedural history of the Dissolution Appeal was relevant, then the Plaintiffs should have adduced such evidence before the hearing in March 2025. The Defendant pointed out that Camille’s criticisms of the CA Judgment on the date of service had already been made in Michou 8, and it was not necessary. It was also pointed out that the Camille Letter seeks to advance new issues relating to (1) the conduct of the hearing before the Djibouti CA as being in breach of the adversarial principle under Djibouti law, and (2) the fact that the 1^st Plaintiff would not be entitled to appeal against the CA Judgment in the absence of any question of law being involved.

10.  According to the Defendant, it is not correct for the Plaintiffs to assert that Lopez 1 and Abayazid 7 raised new points, as Lopez 1 only sought to respond to Michou 8, by presenting the factual and procedural steps which were taken in the Dissolution Appeal, and the Plaintiffs should not be given a second bite of the cherry when Michou 8 was filed for the very purpose of presenting what (according to the Plaintiffs) had occurred before the Djibouti CA.

11.  The Defendant highlighted the delay in the issue of the Plaintiffs’ Summons. Lopez 1 was filed on 15 April 2025, 1.5 months after the hearing on 4 March 2025, and there was no explanation from the Plaintiffs why they required 2 months to issue the Plaintiffs’ Summons on 27 June 2025. This is only more unreasonable when the 1^st Plaintiff is a party to the Dissolution Appeal, had always had access to the court documents in Djibouti and the Plaintiffs were privy to the Dissolution Appeal, in contrast to the position of the Defendant which is not a party to the Djibouti proceedings. Having delayed the issue of the Plaintiffs’ Summons for the service of Michou 9 by 2 months, the Defendant pointed out that it was unfairly prejudicial to expect the Defendant to have sufficient time to obtain instructions and to file evidence in response to Michou 9 in the interim of 5 weeks before the substantive hearing fixed in early August 2025.

12.  Counsel for the Defendant argued that the principles governing Order 32 rule 11A (4) RHC should apply, when it is implicit from the Court’s rejection of the Plaintiffs’ request for automatic leave to file reply evidence, that no further evidence should be filed after the March hearing without further leave of the Court. Citing Tian Hongmei v Zhang Wei[2023] HKCFI 2675, it was contended that the Ladd v Marshall conditions have to be satisfied, and on the facts of this case, they do not. Michou 9 could have been adduced much earlier with reasonable diligence. Camille’s evidence is not apparently credible because it is only unsworn evidence adduced in the form of a letter, and not on affidavit (Hong Kong Civil Procedure 2025 para 41/4/1). The Defendant further claims that the Camille Letter cannot constitute admissible evidence on foreign law, as it is defective for failing to contain the expert declaration referred to in Order 38 rule 37C.

13.  As a starting point, I would agree that there must be an end to the filing of evidence for interlocutory matters, bearing in mind in particular, on the facts of this case, that Michou 8 was itself filed and served at a very late stage, shortly before the hearing in March 2025, which was already the adjourned hearing of the Authority Summons originally fixed for 16 and 17 April 2024. The April hearings were adjourned to allow amendments to be made to the Authority Summons. A belated and further round of evidence was allowed by the 4/3 Order, on the rather exceptional circumstances and development in the case. That should have been the end of the matter.

14.  However, it has to be accepted that this case and the dispute concerning the Authority Summons raise complex issues, and each party should be given the opportunity to present all the relevant facts relating to the process and hearings before the Djibouti courts, for this Court to have a clear and complete understanding of the circumstances in which the Dissolution Order was made and the Dissolution Appeal was heard and disposed of.

15.  It is undesirable that the parties have given evidence in a piece-meal manner but to some extent, this is unavoidable due to: (1) the different location of the parties; (2) there have been difficulties in the parties’ ability to get prompt responses from those individuals who are in Djibouti; and (3) the Defendant is not even a party to the proceedings in Djibouti, and is required to make inquiries with third parties for information concerning the state and progress of those proceedings.

16.  On the question of delay as claimed by the Defendant, the Plaintiffs have explained that Michou 8 was filed so late because the Dissolution Appeal was only dismissed (unexpectedly) by the Djibouti CA on 26 February 2025. The Plaintiffs were only informed of the dismissal on 27 February 2025, and Michou 8 was prepared within 2 business days, before the hearing on 3 March 2015. In that available time, it had not been possible for the Plaintiffs to acquire a full understanding of the situation or to deal with more details of the Dissolution Appeal, nor could they have anticipated the misstatements and omissions contained in Lopez 1 and Abayazid 7 which require correction by Michou 9 (as the Plaintiffs maintain). With regard to the Defendant’s complaint of the expert declaration missing from the Camille Letter, the Plaintiffs highlighted the fact that neither Lopez 1 nor Abayazid 7 contains the expert declaration.

17.  I have to bear in mind that under Order 1A rule 2(2) RHC, the Court must have regard to the fact that in giving effect to the underlying objectives of the Rules of the High Court, the Court shall always recognize that the primary aim in exercising the powers of the court is to secure the just resolution of disputes in accordance with the substantive rights of the parties. Notwithstanding the complaints made by each side with regard to the evidence so far filed, all parties are anxious to avoid yet another adjournment of the substantive hearing of the Authority Summons. I accept that for the issues to be determined on the Authority Summons, the Court should have all the relevant facts which have been referred to at paragraph 14 above.

18.  I take note of the fact that Michou 9 has been provided to the Defendant since 27 June 2025. The Defendant has also been provided with an account of the Disposition Appeal and the relevant Djibouti law provisions by its experts, as set out in Lopez 1 and Abayazid 7. Michou 9 can be admitted for the purposes set out above. Any difference in the accounts of the hearing and on the effect of Djibouti law will simply have to be resolved at the substantive hearing of the Authority Summons on the available evidence.

19.  The Plaintiffs have made it clear that if the Defendant considers it necessary to respond to Michou 9, they agree to give the opportunity to the Defendant to do so. It is further noted from the Defendant’s written submissions that it is prepared to have its evidence filed and served in reply to Michou 9 by 28 July 2025, with a view to having the matter argued in full at the hearing fixed for 4 August 2025. Both sides have demonstrated that they are prepared to be reasonable.

20.  Taking a pragmatic view of the matter and with Order 1A rule 2(2) in mind, I will grant leave to the Plaintiffs to adduce Michou 9, with consequential leave to the Defendant to file and serve evidence in reply thereto by 28 July 2025. No more evidence shall be admitted.

21.  The costs of the Plaintiffs’ Summons will be reserved.

Ms Sara Tong SC and Ms Astina Au, instructed by Deacons, for the 1^st & 3^rd plaintiffs

Mr Benjamin Yu SC, Mr Law Man-Chung SC and Mr Danny Tang, instructed by Reed Smith Richards Butler LLP, for the defendant

HCA 1951/2018

[2020] HKCFI 639

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1951 of 2018

________________________

________________________

________________________

D E C I S I O N

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1.  The Defendant applies for leave to appeal against this Court’s decision dated 20 December 2019, rejecting a stay of these proceedings for determination by the Djibouti Court as the appropriate forum. The grounds are that the Court failed to apply the correct tests or approach in determining the forum conveniens.

2.  The Plaintiffs argued that the intended appeal is against an exercise of the discretion of the Court, and parties should not be encouraged to litigate the merits of competing fora at different levels of the court, in the hope of persuading a higher court to strike a different balance in the factors pointing for or against a foreign forum.  That is correct, but having considered the draft Notice of Appeal and the submissions of Counsel, I grant the leave sought.

3.  I accept that the Defendant has shown that it has more than just an arguable case (Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515) on the intended appeal, with regard to the issues of the 3^rd Plaintiff’s authority to sue, the factors to be considered for the place of commission of the tort complained of by the Plaintiffs, and whether there was error in law, as alleged, in the context of the existence or materiality of public policy considerations.  These are complex issues, and the Defendant does not have to establish that its appeal will probably succeed, in order to obtain leave.

4.  The summons for leave to appeal is granted, with costs in the cause of the appeal.  I also grant the extension of time sought for filing the Defence, as per “Version 1” of the draft order submitted by the Defendant.

Mr Paul Shieh SC and Ms Sara Tong, instructed by Deacons, for the 1^st to 3^rd plaintiffs

Mr Rimsky Yuen, SC, Mr Law Man-Chung and Mr Danny Tang, instructed by Baker & McKenzie, for the defendant

HCA 1951/2018

[2019] HKCFI 3104

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1951 of 2018

________

____________

_____________

D E C I S I O N

_____________

Background

1.  These proceedings are commenced by the 3 Plaintiffs against the Defendant, whereby claims are made in respect of the Defendant’s alleged interference with the performance of the Plaintiffs’ contract for the operation of a container terminal at Doraleh, and the Defendant’s acts of allegedly inducing and/or procuring the breach of various contracts and unfair competition under the Djibouti Civil Code.

2.  The 1^st Plaintiff (“DPWD”) and the 2^nd Plaintiff (“DID”) are wholly owned subsidiaries of DP World Limited (“DP World”).  DP World is one of the largest port operators in the world, and is listed on the NASDAQ Dubai Stock Exchange.  DPWD, DID and DP World are all incorporated and based in the United Arab Emirates.

3.  The Defendant (“China Merchants”) is incorporated in Hong Kong, and listed on the Hong Kong Stock Exchange.  It is a global public port developer and investor, and can fairly be said to be a competitor of DP World.

4.  There have been different court and arbitration proceedings, between the DP World group of companies including DPWD and DID on the one part, and the Republic of Djibouti (“Republic”) and the Djibouti port entities on the other part, in London and Djibouti, relating to the dispute between the DP World group and the Djibouti Republic and authorities over the rights to the operation and development of the ports and container terminals in the Djibouti free trade zone.

5.  This application is to determine the proper and appropriate forum for the trial of the dispute between the Plaintiffs and the Defendant in these proceedings.

6.  The underlying facts and the background of the dispute are not in issue, and are summarized in the agreed chronology of key events, attached as Appendix to this Decision.

The various agreements

7.  I refer to the judgment of Hon Faux J (as he then was) in proceedings in the English Commercial Court, between the Republic of Djibouti and Mr Boreh ([2016] EWHC405 (Comm)), only for its helpful summary on the development of the new port and free zone complex built at Doraleh, to the south of Djibouti City, in the last 15 years, and its transformation into a successful and the leading port in the region, with one of the largest container terminals.  Mr Boreh was instrumental, if not the key character, in bringing together the President of the Republic and DP World in the development and management of the port of Djibouti (“Port”) since 1999.  Through Mr Boreh’s negotiations, various agreements were signed between the Republic and DP World.

8.  In brief, a Management Agreement was signed in May 2000, whereby Dubai Ports International FZE took over the management of the Old Port of Djibouti.  In February 2004, a Concession Agreement was made between the Republic and the 2^nd Plaintiff (“2004 Concession”), whereby the Republic granted to the 2^nd Plaintiff the full and exclusive right to establish, develop and operate a new port and container terminal at the Doraleh site.  The 2004 Concession agreement was to remain effective for 30 years, renewable for an additional two 10 year periods.  The Republic agreed not to grant another concession for any other port or free zone facilities within the Republic for the duration of the term of the 2004 Concession agreement, without the prior written consent of the 2^nd Plaintiff.

9.  DP World was able to obtain funding from a consortium of banks to build a new international container terminal at Doraleh (“Terminal”), on the condition that DP World was to manage and operate the Terminal.  By a law enacted by the Djibouti Parliament on 21 June 2006, the 3^rd Plaintiff was set up as a joint venture company between the Djibouti Government and DP World, for the purpose of building, developing and operating the Terminal.  The 1^st Plaintiff held the minority 33.34% share interest in the 3^rd Plaintiff but had corporate control thereof.  The majority 66.66% of the shares of the 3^rd Plaintiff was held by Port Autonome International de Djibouti (“PAID”, now known as “PDSA”), the public entity which has jurisdiction over the operation of ports in Djibouti, for the Djibouti Government.

10.  On 30 October 2006, a further concession agreement (“2006 Concession”) was made between the Republic, the 3^rd Plaintiff and the 2^nd Plaintiff, whereby the Republic granted to the 3^rd Plaintiff the sole and exclusive right to develop the Terminal, and to undertake the activities relating to the operation, maintenance and repair of the Terminal, for 30 years.  The Republic agreed not to cause PAID to operate or commission any facilities within Djibouti for handling containers, without the 3^rd Plaintiff’s prior written consent (Article 3.6.2).  The Republic further agreed, under Article 3.6.3 of the 2006 Concession, to first offer the 3^rd Plaintiff the right to develop such additional container handling facilities as the relevant Djibouti authority should decide to develop; and in the event that any other port or container facility is developed in Djibouti by the Republic or other third party, and more favorable treatment or privileges than those offered to the Terminal and/or the 3^rd Plaintiff should be received, equivalent favorable treatment or privileges shall be offered or extended to the Terminal and/or the 3^rd Plaintiff (Article 3.6.4).

11.  A Joint Venture Agreement (“JVA”) was made between the 1^st Plaintiff and PAID on 22 May 2007 in relation to the corporate affairs of the 3^rd Plaintiff.  The shareholders of the 3^rd Plaintiff agreed under the JVA to cause the 3^rd Plaintiff to enter into and fulfill its obligations under its Management Services Agreement with the 1^st Plaintiff as Manager. The Djibouti Government as shareholder of the 3^rd Plaintiff covenant under the JVA that the Republic would comply with Article 3.6 of the 2006 Concession.

12.  A Management Services Agreement dated 6 December 2007 was then entered into between the 1^st Plaintiff and the 3^rd Plaintiff.  Under this agreement, the 1^st Plaintiff was appointed as the Manager of the Terminal.

13.  The Terminal became operational in December 2008, and gradually became the leading port in the region.

The Defendant’s involvement

14.  On its part, the Defendant began to play a role in Djibouti from 2012.  The full extent of the Defendant’s involvement is hotly disputed, but the Defendant does not dispute the following.

15.  On 29 December 2012, the Defendant signed a Strategic Partnership Agreement with the Djibouti Ports and Free Zones Authority (the statutory authority of the Republic in charge of ports and free zones) (“Port Authority”), pursuant to which the Doraleh Multipurpose Port (“Multipurpose Port”) was developed.  Under a Share Purchase Agreement dated 29 December 2012 (“SPA”), the Defendant acquired 23.5% of the shares in PAID, thereby becoming an indirect shareholder of the 3^rd Plaintiff.

16.  On 5 February 2013, the Defendant and its subsidiary entered into a Shareholders Agreement with the Port Authority and the Government of the Republic (“Shareholders Agreement”).  Following the Defendant’s involvement in Djibouti, the Port Authority then entered into an investment agreement with a consortium of Mainland investors in November 2016, for the development of the Djibouti International Free Trade Zone (“Free Trade Zone”).

The dispute with the Djibouti Government

17.  The Plaintiffs claim that the Republic’s transactions with the Defendant were entered into without any prior consultation with the Plaintiffs, and without their consent.  They claim that the Republic had acted in breach of the provisions in the 2004 and 2006 Concession Agreements, and in breach of the JVA. In particular, they claim that the Republic was in breach of Clause 5.02 of the 2004 Concession agreement, and/or Clauses 3.6.2 and 3.6.3 of the 2006 Concession Agreement, by granting concessions and entering into agreements with the Defendant for the construction, development and/or operation of new ports and free trade zones within Djibouti, without the Plaintiffs’ prior written agreement, and without offering the 2^nd Plaintiff and the 3^rd Plaintiff the right of first refusal of these rights.  As PAID had participated in and co-funded the construction and development of the Multipurpose Port with the Defendant, the Plaintiffs further claim that there was breach of Article 3.6 of the 2006 Concession Agreement and Clause 17.1 of the JVA.

18.  The relationship between the Djibouti Government and the DP World group turned sour.  According to the Plaintiffs, the Republic had sought to renegotiate its contracts and terms of dealings with the Plaintiffs as early as 2012, evidenced by the Republic’s letter of 7 August 2012.  In October 2012, the Republic commenced proceedings in the United Kingdom against Mr Boreh, alleging that he had taken bribes from the 1^st Plaintiff in return for negotiating “soft terms” between the 3^rd Plaintiff, the 1^st Plaintiff and the Republic (“Boreh Proceedings”).  In July 2012, the Republic (together with PAID and the Port Authority) initiated arbitration proceedings against the Plaintiffs in the London Court of Arbitration, alleging that the Republic was entitled to rescind the 2006 Concession Agreement (“Rescission Arbitration”) as it was tainted by the 1^st Plaintiff’s alleged bribery of Mr Boreh.

19.  It is not disputed, that the claims made by the Republic against Mr Boreh, and against the Plaintiffs in the Rescission Arbitration, were all dismissed. 

20.  In his judgment in the Boreh Proceedings (“Boreh Judgment”), Faux J held that the overall deal negotiated by Mr Boreh was advantageous to the Republic, and that the most likely explanation for the conduct of the Republic against Mr Boreh was that it was all politically motivated and designed to ruin Mr Boreh.  The English Court of Appeal dismissed the Republic’s application for leave to appeal.

21.  The Republic’s claims of rescission and/or termination of the 2006 Concession agreement, as made in the Rescission Arbitration, were likewise dismissed in the Award dated 20 February 2017 (“Rescission Award”). The tribunal held that the President of the Republic, his advisers and the Council of Ministers all knew of and approved the terms of the Concession Agreement, and that none of the impugned transactions constituted a bribe, and they were all legitimate.

22.  The Plaintiffs’ complaint is that notwithstanding the unsuccessful attempts to rescind the 2006 Concession agreement by way of legal proceedings and the Rescission Arbitration, the Republic continued its efforts to terminate the 2006 Concession through legislative acts. The Law No 202/AN/17/7^th L on Strategic Infrastructure Contracts (“Law 202”) was propagated on 8 November 2017.  This allowed the Government of the Republic to renegotiate and (if necessary) to terminate all contracts relating to strategic infrastructures which are deemed to be contrary to the fundamental interests of the Republic.  Pursuant to Law 202, the Government of the Republic demanded renegotiation of the 2006 Concession with the 3^rd Plaintiff from December 2012.  The Plaintiffs did not consider that it was in the best interests of the 3^rd Plaintiff to renegotiate the 2006 Concession, and on 20 February 2018, the 1^st Plaintiff and the 3^rd Plaintiff initiated a second arbitration at the London Court of International Arbitration (“Termination Arbitration”) on the validity of the 2006 Concession Agreement.  In the Termination Arbitration, the Plaintiffs sought a declaration that the 2006 Concession remained in full force and effect.

23.  Two days after the commencement of the Termination Arbitration, the Government of the Republic issued a series of Presidential Decrees (“Decrees”), which declared the 2004 and 2006 Concessions to terminate with immediate effect.  Public officials took physical control of the Terminal and the oil jetty, and transferred the 3^rd Plaintiff’s assets, operations and personnel to a state-owned company (“SGTD”) which was appointed to be the operator of the Terminal in place of the 3^rd Plaintiff, as well as the manager in place of the 1^st Plaintiff.

24.  The Government of the Republic did not take part in the Termination Arbitration, and on 31 July 2018, the tribunal handed down its award, finding that the 2006 Concession remained valid and binding notwithstanding Law 202 and the Decrees (“Termination Award”).

25.  On 28 July 2018, PDSA notified the 1^st Plaintiff that it had decided to terminate the JVA.  The reasons given were that the 3^rd Plaintiff, which was controlled by the 1^st Plaintiff, had failed to renegotiate the 2006 Concession with the Government of the Republic, notwithstanding Law 202, and the 1^st Plaintiff had instead used its controlling powers over the 3^rd Plaintiff to commence the Termination Arbitration.  As this had prompted the Republic to enact the Decrees, which had the effect of terminating the 2006 Concession agreement and transferring the 3^rd Plaintiff’s assets to SGTD, PDSA claimed that the 1^st Plaintiff had failed to act in the best interests of the 3^rd Plaintiff, as required under the JVA.

26.  PDSA called for an extraordinary general meeting of the 3^rd Plaintiff’s shareholders on 9 September 2018, to replace the 1^st Plaintiff’s nominated directors with PDSA’s own nominees.  The 1^st Plaintiff then applied for and obtained from the English Court on 31 August 2018 an injunction to prevent PDSA from passing a resolution to remove the 1^st Plaintiff’s nominated directors (“English Injunction”).  The 1^st Plaintiff commenced a further arbitration against PDSA in the London Court of International Arbitration (“Articles Arbitration”), claiming that PDSA was acting in breach of the JVA and the Articles of the 3^rd Plaintiff.

27.  Notwithstanding the English Injunction, the Republic issued a Presidential Ordinance on 9 September 2018 (“9/9 Ordinance”), which sought to transfer PDSA’s shareholding in the 3^rd Plaintiff to the Government of the Republic. 

28.  The English Injunction was continued on 14 September 2018, to restrain PDSA from (inter alia) taking any steps to effect a transfer of its shares in the 3^rd Plaintiff to any transferee who is not already a party to the agreement contained in the Articles.  The English Injunction was also extended to any “Affiliates” of PDSA, as defined in the JVA, which will include any person which is directly or indirectly in control of or in common control with PDSA, as well as any person to which shares in the joint venture company, the 3^rd Plaintiff, are issued or transferred in accordance with the JVA.

29.  On 28 October 2018, the Republic promulgated another law, stating that the 9/9 Ordinance purporting to nationalize PDSA’s shares had been ratified by the Parliament of the Republic, and that PDSA would be compensated by shares in SGTD, which had taken over the operation of the Terminal.  A further Decree (No 29/AN/18/8eme) was issued by the Government of the Republic on 5 May 2019, purporting to transfer to PDSA 66.66% of SGTD’s shareholding, free of charge, as compensation.

30.  The Republic also commenced proceedings before the Djibouti Court on 20 September 2018, to invalidate the 3^rd Plaintiff’s Articles (“DjiboutiInvalidity Proceedings”) and its board resolution passed on 18 February 2018, which authorized the commencement of the Articles Arbitration and these proceedings (which were commenced by the Plaintiffs against the Defendant in Hong Kong on 3 September 2018).  The basis of the Djibouti Invalidity Proceedings is that the relevant Articles and resolution were contrary to Djibouti public policy.

31.  The 3^rd Plaintiff challenged the jurisdiction of the Djibouti Court, on the basis that the Articles of the 3^rd Plaintiff and the JVA both contain arbitration clauses.  This jurisdictional challenge was dismissed by the Djibouti Court on 29 January 2019, which decision was the subject of an appeal by the 3^rd Plaintiff.

32.  On 26 September 2018, after the English Injunction had been extended and continued to restrain PDSA from causing the 3^rd Plaintiff to act in breach of the Articles, the Republic applied to the Djibouti Court to appoint an Administrator over the 3^rd Plaintiff, in place of the board, which appointment was made on 27 September 2018.  Neither the 1^st nor the 3^rd Plaintiff were notified of the hearing of the application.  The board of the 3^rd Plaintiff launched a challenge to the Djibouti Court with regard to the appointment of the Administrator, which the Plaintiffs maintain was contrary to the express provisions of the English Injunction, and was a matter which required the 1^st Plaintiff’s consent under the JVA.  The Plaintiffs’ challenge was dismissed by the Djibouti Court on 15 November 2018.  The board appealed against such dismissal, but the appeal was also dismissed by the Court of Appeal on 3 January 2019.  The board appealed to the Supreme Court of Djibouti, but the Supreme Court dismissed the board’s challenge, on the ground that the pleadings were filed out of time - which is denied by the board.  The board is seeking a review of the Supreme Court decision.

The claims made in these proceedings, and the stay sought

33.  It is against such factual background that the present proceedings, and the stay sought, have to be reviewed.

34.  This action was brought by the Plaintiffs against the Defendant in Hong Kong on 20 August 2018.  In essence, they contend that the steps taken by the Government of the Republic in its negotiations and dealings with the Defendant for the development of the Terminal and the Port/Free Trade Zone, and the agreements made between the Republic and the Defendant for such purposes, amounted to wrongful breaches of the 2004 and 2006 Concession agreements and of the JVA.  The Plaintiffs claim that the Defendant had knowledge of the terms of the Concession Agreements and the JVA, and had intended to, and did, induce or procure the breaches of the Djibouti Government. In addition, the Plaintiffs claim in their pleadings that under Djibouti law, the Defendant would be liable for breach of Article 1391 of the Djibouti New Civil Code (“New Code”), and alternatively, for unfair competition.

35.  The Defendant’s intended defence to the claims made is that, first, there was no breach of the Concession Agreements, which were invalid.  On the Defendant’s case, the 2004 Concession agreement was not passed through the necessary legislative procedure at the time of its execution, and its terms were harmful to the public or national interest of Djibouti. 

36.  The 2006 Concession agreement and the JVA are also claimed to be invalid, in that they were procured by the Plaintiffs through Mr Boreh’s bribery. 

37.  The Defendant denies that it had knowledge of the Boreh Proceedings and the Rescission Arbitration, but claims that it was not a party to either of these proceedings, and is not bound by their outcome.

38.  Further, the Defendant denies that the development of the Multipurpose Port constitutes breach of Clause 3.6.3 of the 2006 Concession agreement, and that in any event, the Plaintiffs had waived any breach.  It also denies that it was engaged in the development of the Terminal or other ports as alleged by the Plaintiffs, and further denies that it had any intention to induce or procure any breach by the Djibouti Government.  The Defendant claims that the Djibouti Government’s conduct towards the 3^rd Plaintiff could not have been what the Defendant intended, as it also had a stake in the 3rd Plaintiff through PDSA.  According to the Defendant, some of the Decrees had potential ramification on its interests in the Republic, as illustrated by various complaints that the Defendant had raised with the Djibouti Government.

39.  Finally, the Defendant denies that any breach of the Concession Agreements and the JVA was caused by any alleged procurement on its part.  It claims that the Republic would have breached or terminated the Concession Agreements and the JVA in any event, since the relationship between the Republic and the 1st Plaintiff had deteriorated by virtue of many complicated political and commercial reasons.

40.  In addition, the Defendant claims that it is entitled to rely on an indemnity from the Port Authority dated 28 August 2017 (“Indemnity”), whereby the Port Authority had warranted that the development of the Free Trade Zone was not in breach of the 2004 Concession Agreement, and that it would indemnify the Defendant for any claim made by the 2^nd Plaintiff.  The proceedings to enforce the Indemnity would, according to the Defendant, be commenced in the Republic.

41.  On 13 December 2018, the Defendant applied for these proceedings to be stayed in favor of the Civil Chamber of the Court of 1^st Instance in the Republic (“Djibouti Court”).  It claims that the dispute has no real connection with Hong Kong, and should not be tried before the Hong Kong courts.

Applicable legal principles

42.  The legal principles applicable to determination of the Defendant’s application for stay are not in dispute.  The burden is on the Defendant, as the applicant, to show that the alternative forum is clearly or distinctly more appropriate than Hong Kong for the trial of the action. The Defendant claims that the Djibouti Court is the more appropriate forum.

43.  In SPH v SA (2014) 17 HKCFAR 364, at para 51, the Court of Final Appeal restated the applicable legal principles, applying Spiliada [1987] AC 460 at 477:

“1. The single question to be decided is whether there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of an action ie in which the action may be tried more suitably for the interests of all the parties and the ends of justice?

2. In order to answer this question, the applicant for the stay has to establish that first, Hong Kong is not the natural or appropriate forum (‘appropriate’ in this context means the forum has the most real and substantial connection with the action) and second, there is another available forum which is clearly or distinctly more appropriate than Hong Kong. Failure by the applicant to establish these 2 matters at this stage is fatal.

3. If the applicant is able to establish both of these two matters, then the plaintiff in the Hong Kong proceedings has to show that he will be deprived of a legitimate personal or juridical advantage if the action is tried in a forum other than Hong Kong.

4.  If the plaintiff is able to establish this, the court will have to balance the advantages of the alternative forum with the disadvantages that the plaintiff may suffer.  Deprivation of one or more personal advantages will not necessarily be fatal to the applicant for the stay if substantial justice will be done in the available appropriate forum.”

44.  As the Court held in Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250:

“Mere convenience is not enough nor is it enough simply to point to factors which connect a case or the parties to any particular jurisdiction. The approach in foreign non conveniens applications is not just an exercise in building up factors which point to any particular jurisdiction. The court is required to focus on appropriateness of a forum from the point of view of the trial of action.”

45.  The Plaintiffs placed emphasis on the fact that they had served the Writ on the Defendant as of right.  The Defendant is incorporated in Hong Kong, and is listed on the Exchange here.  I accept the Defendant’s submissions, that in placing the burden of showing that the alternative forum is clearly or distinctly more appropriate, the service of the proceedings on the defendant “as of right” has already been taken into consideration.  This was explained by DHCJ Poon (as he then was) in New Link Consultants Ltd v Air China [2005] 2 HKC 260, at paras 64-66:

“While proper regard must be paid to the fact that jurisdiction is founded as a right, it is the connecting factors that determine if the Hong Kong court or the other forum is clearly more appropriate.  Thus, if the connecting factors clearly point to the latter as the more appropriate forum for the trial the “as of right” point, however weighty that may be, will not tilt the balance back in favor of the Hong Kong court.  It is therefore essential to look at the connecting factors in the present case to see in which direction they point to.”

46.  Where a party claims that the alternative forum is not available or appropriate due to problems with the quality of justice in the jurisdiction, the test is whether there is a risk, that substantial justice would not be obtained in the foreign forum (Altimo Holdings v Kyrgyz Mobil Tel Ltd [2012] WLR 1804).  The parties have referred to Cherney v Deripaska [2009] 1 All ER (Comm) 333, where at paragraph 237 of the judgment, Clarke J observed:

“An English court will approach with considerable circumspection any contention that the potential claimant cannot obtain justice or a fair hearing in a foreign court and will require “positive and cogent” evidence to persuade it to the contrary: The Abidan Daver [1984] AC 398, 411c. Assertions to that effect are relatively easily made by generalized statements and may be difficult comprehensively to refute.”

47.  The court pointed out in Cherney v Deripaska that its task is to identify the forum in which the case can suitably be tried for the interests of all the parties and the ends of justice, explaining thus:

“Even if England is not the natural forum, the claimant may establish - the second stage - that substantial justice will or may not be done in the natural forum so that justice requires that the case be tried in England. If he does so then the case cannot be tried there more suitably in the interests of the parties and for the ends of justice, and England will be the proper place.” (Emphasis added)

The connecting factors

48.  The Defendant claims that the events, parties and witnesses are all connected with Djibouti, and not Hong Kong.  The subject matter of the Concession Agreements and the JVA, namely the Terminal, the Port and the other infrastructure projects, are all situated in Djibouti.  The relevant contracts claimed to have been breached were made with the Government of the Republic, and the breaches complained of relate to the development of projects in Djibouti.  The Defendant claims that local circumstances are relevant, as are the alleged acts of inducement, namely negotiation of the shareholders’ agreement between the Port Authority, the Republic, the Defendant and its subsidiary in relation to their shareholding in PDSA, all of which took place in Djibouti.  The loss suffered by the Plaintiffs, which the Defendant claims is the lost opportunity to develop the new ports and the free zones, and the lost profits from the Terminal, were likewise suffered in Djibouti.

49.  The Defendant claims that its witnesses to be called at trial are substantially residents of Djibouti who speak French, and that a trial in Djibouti can be conducted without the need of translators.

50.  The Defendant also claims that the Government officials and representatives of the Republic are reluctant to testify in Hong Kong, and only the Djibouti Court can subpoena them.

51.  Apart from the location of the parties and witnesses, and the connection of the events with Djibouti, the Defendant placed heavy reliance on the materiality of Djibouti as the governing law of the central issues.

Location of the parties

52.  So far as the parties are concerned, the 1^st and 2^nd Plaintiffs and DP World are all incorporated in Dubai, and are managed and operated from there.  The 3^rd Plaintiff is incorporated in Djibouti, but the Plaintiffs emphasize that as its corporate affairs were at all material times managed and controlled by the 1^st Plaintiff as its Manager (at least before the appointment of the Administrator), the 3^rd Plaintiff is truly located in Dubai.  The majority of the 3^rd Plaintiff’s board and its executive team are all based outside Djibouti.

53.  The Defendant is incorporated and listed in Hong Kong.  On its case, it has 2 management centres: one in Shenzhen and one in Hong Kong.  It claims that matters concerning the Share Purchase Agreement and the Shareholders Agreement relating to the shares in PAID were “primarily dealt with” in Shenzhen.

Place of commission of the tort

54.  On behalf of the Defendant, it was submitted that the place where a tort is committed is highly relevant and should be the starting point when the Court looks for the most procedurally efficient forum.  The Plaintiffs complain of the Defendant’s inducement of the Republic’s breaches of its contracts, and in relation to acts of alleged unfair competition and breach of the Djibouti New Code.  According to the Defendant, all the relevant events and conduct complained of took place in Djibouti, and relying on VTB Capital plc v Nutritek International Corpn [2013] 2 AC 337, the Defendant contends that the appropriate forum to resolve a tortious dispute is that of the place where the tort occurred.

55.  In VTB Capital, Lord Mance cautioned that it is likely to be “over-simplistic” to purely consider the place of commission of the tort in isolation.  At para 51 of his judgment, he pointed out:

“The place of commission is a relevant starting point when considering the appropriate forum for a tort claim. References to a presumption are in my view unhelpful. The preferable analysis is that, viewed by itself and in isolation, the place of commission will normally establish a prima facie basis for treating that place as the appropriate jurisdiction. But, especially in the context of an international transaction like the present, it is likely to be over-simplistic to view the place of commission in isolation or by itself, when considering where the appropriate forum for the resolution of any dispute is. The significance attaching to the place of commission may be dwarfed by other countervailing factors.” (Emphases added)

56.  The place of commission of the tort is, at most, a starting point.  In Base Metal Trading Ltd v Shamurin [2005] 1 WLR 1157, the court noted:

“In our case, the wrongful acts, being the decisions to speculate and give instructions accordingly, all took place in Russia. The place where the loss occurs is not determinative. When damage has occurred which makes the tort complete the right approach is to look back over the series of events constituting it and ask where in substance the cause of action arose: Distillers Co (Biochemicals) Ltd v Thompson [1971] AC 458, 468.” (Emphases added)

57.  The consideration of the appropriateness of a forum is from the point of view of the trial of the action, and in the present case, an important issue to be decided at trial is whether the Defendant had knowledge of the relevant contractual obligations between the Plaintiffs and the Republic, and had knowingly procured the breaches of such contracts.  As the Plaintiffs pointed out, this involves the Court looking at the decisions made, and instructions given, by the individuals forming the Defendant’s management.  Such individuals are based either in Hong Kong or in Shenzhen.  I accept the Plaintiffs’ submissions, that although the implementation of the management decisions of the Defendant - in the operation of the ports and the Free Trade Zone in Djibouti, the negotiation and signing of the relevant agreements, and the operation of the day to day affairs of the subsidiary of the Defendant which held the shareholding interests in PAID, may have occurred in Djibouti, the fact and occurrence of these matters are not controversial.  The material issue is the state of knowledge and the decision making in respect of the wrongful acts as alleged by the Plaintiffs, and these largely if not entirely took place in Hong Kong and/or Shenzhen. Shenzhen is not asserted by the Defendant as the alternative forum.

58.  Further, the Plaintiffs have in their evidence claimed that the Defendant’s acts of interference in the Plaintiffs’ contracts with the Republic were part of its strategy of seeking investments in port infrastructure, in order to strengthen its strategic positioning in East Africa as part of the “One Belt One Road Initiative” (“BRI”), and that the Republic’s decision to renegotiate the 2006 Concession, on the purported ground that it was detrimental to the Republic’s sovereignty and best interests, was due to its intention to take over the 1^st Plaintiff’s interests in the Terminal, in order to give them to the Defendant, “to reduce the mounting debt owed by the Republic to Chinese institutions”. These assertions are denied by the Defendant, but the claims have to be considered in the context of where the Defendant’s alleged torts were committed (outside Djibouti as the Plaintiffs allege).  Further, if these claims of political decisions and/or influences are pursued at trial, the witnesses of the Defendant who will have to be cross-examined will be those who were dealing with matters of overall strategy, policies and decision making of the Defendant, rather than the individual employees who were involved in the day to day operation in Djibouti. On the Defendant’s evidence, its management centres are in Shenzhen and Hong Kong and it can be envisaged that the key personnel are here and in Shenzhen.

59.  In the context of the witnesses of the Plaintiffs to be called, Counsel for the Defendant also contended that on the question of causation between the alleged procurement by the Defendant and the alleged breach of the relevant contracts, the 1^st Plaintiff is effectively an arm of the Dubai Government, and that it was a vehicle utilized by the Dubai Government to reduce competition for its own ports and free zone. The Defendant’s case is that in order to protect Dubai’s strategic interest from regional competition, the 1^st Plaintiff had made efforts to suppress the development of ports under its control, including the Terminal in Djibouti, and that this had led to the deterioration of the relationship between the Republic and the Plaintiffs. In this regard, it is envisaged that the witnesses to be examined at trial would include the key officers and decision makers of the 1^st Plaintiff, who are based in Dubai.

60.  The Defendant argued that the Djibouti Court is in a better position to consider the question of the alleged deterioration of the relationship between the Republic and the DP World group, by reason of its understanding of the local culture and sentiment towards the conduct of the DP World group. I do not accept this contention, as it is all a matter of evidence as to the alleged sentiments, and any alleged resentment by the Djibouti Government, which the Hong Kong Court can receive from the witnesses (as in any case not involving the Republic) and decide.

61.  The damage suffered by the Plaintiffs, as a result of the tortious acts complained of, was in Dubai - where DP World, the 1^st Plaintiff and the 2^nd Plaintiff are located.

62.  In all these respects, Djibouti cannot be seen to be clearly or distinctly more appropriate than Hong Kong as the forum for trial.

Availability of witnesses and documents

63.  The physical location of the witnesses and the documentary evidence are not significant considerations in this modern, global marketplace, particularly in the context of the cross-border transactions and cooperation, the size of the ventures and the significant amounts of the investments involved in the present case.  As the Court observed in PT Krakatau Steel (Persero) v Mount Kerinci LLC [2009] 1 HKLRD 264 at para 80:

“ … if and in so far as there is going to be a trial of this claim in Hong Kong (which for my part I should have thought it was unlikely), the fact that these gentlemen may have to travel to Hong Kong is relatively unimportant in the litigation scheme of things, given the emergence of what nowadays is referred to as the “global marketplace”; accordingly, when weighed in the scales this is no more than a very minor consideration.”

64.  This point is illustrated by the fact that 4 out of the 11 named witnesses for the Defendant had traveled to London from Djibouti to give evidence in the Boreh Proceedings and the Rescission Arbitration, and had traveled to Hong Kong and other parts of China for different reasons.

65.  As the Plaintiffs have also highlighted, the persons in Djibouti who have been named as potential witnesses for the Defendant are said to be giving evidence on the development, operation and management affairs of the Djibouti Mixed Port, when such factual part of the background dispute is not in issue, and the relevance and materiality of such evidence for trial is questionable.  The Defendant has suggested that the Djibouti government officials who will be called are residents of Djibouti, that they can speak French but not Cantonese or English, and that they are “reluctant” to testify in Hong Kong (without further elaboration as to the reason for their alleged reluctance), should the trial be here.

66.  I cannot foresee any difficulties for any witness to give evidence in French, or Putonghua, for a trial in Hong Kong, nor for translation to be arranged for documents in French. As for their alleged reluctance to give evidence, the Court in Botanic Ltd v China National United Oil Corp, unreported, HCA 1852/2005, 25 August 2008 drew a distinction in this regard between a party’s own witnesses, and third-party witnesses.  In his judgment, DHCJ To stated:

“By third party witnesses, I mean witnesses who are truly unrelated to the party intending to call them. Their cooperation to testify for the party is gratuitous in nature. In assessing the issue of availability of witnesses in the present context, the will of the third party witnesses must carry more weight than that of the parties’ own witnesses. The subjective belief of third party witnesses cannot be measured against any objective standard or reasonableness. Whether the belief is founded or not is irrelevant, because the party is at the mercy of his witnesses.”

67.  Without further explanation, I see no credible reason why the Defendant would have difficulty in calling their own employees and witnesses from their collaborates in the Djibouti government, with whom the Defendant has ongoing and a close commercial relationship, to give evidence in Hong Kong.

68.  On the other hand, the Plaintiffs claim that contrasting with any inconvenience of the type alluded to by the Defendant in relation to their own employees and witnesses from the Djibouti Government and authorities, the Plaintiffs themselves would be prejudiced by a trial in Djibouti, as it is unlikely that any of their witnesses would be able to travel to Djibouti to give evidence in court there.  The Government of the Republic had cancelled the work permits of all the personnel of the Plaintiffs, who were expelled from the Republic on 22 February 2018.  Even if the Plaintiffs’ personnel were able to travel to Djibouti, they fear for their safety and security in Djibouti in view of the Government’s belligerence against the Plaintiffs.  Pursuant to the issue of the Decrees in February 2018, the Terminal and the operations, assets and personnel of the 3^rd Plaintiff had all been taken over by the Government, upon threat of criminal prosecution for non-compliance with the Decrees.  The Plaintiffs’ local employees had been threatened with arrest and criminal sanctions.

69.  In particular, Mr Boreh who is one of the Plaintiffs’ key witnesses, and a “third party witness” within the meaning of Botanic Ltd v China National United Oil Corp, unreported, HCA 1852/2005, 25 August 2008, is unwilling to travel to Djibouti to give evidence, as his personal safety will be at risk there. 

70.  One of the defences relied upon by the Defendant is that the 2006 Concession agreement and the JVA were invalid, as they were procured by the Plaintiffs through their bribery of Mr Boreh, who was at that time acting as the Republic’s representative.  Leading Counsel has highlighted, in his submissions made on behalf of the Defendant, that the Boreh Judgment, the Rescission Award and the findings therein that there was no bribery on the part of Mr Boreh, are not binding on the Defendant and are inadmissible as evidence of the facts found. The Plaintiffs will therefore have to call Mr Boreh to give evidence at the trial of this action, as to his negotiations on the Concession Agreements.

71.  Mr Boreh’s evidence on the bribery allegation is of significance to the Plaintiffs at trial, at least on the important issues of the validity of the 2006 Concession agreement and JVA, and whether there was breach thereof. These issues are also relevant to the challenges made of the Concession Agreements as being contrary to public policy or the interests of the Republic.  Mr Boreh would be one of the witnesses who can give evidence for the Plaintiffs on the local conditions, policies prevailing at the material time and any relevant economic or social condition.

72.  Mr Boreh was convicted of terrorism by the Djibouti Court in his absence.  He has been living in exile since 2012, and has indicated that he will not be traveling to Djibouti for any reason, since he believes that he will be jailed by the Government if he should enter Djibouti.

73.  Mr Boreh’s reluctance to travel to Djibouti, and his fears for his personal safety, are legitimate considerations in the assessment of forum non conveniens (Cherney v Deripaska, Ho Yuen Ki v Ho Hung Sun [2007] 4 HKLRD 257). The Plaintiffs’ inability to call Mr Boreh as a witness at the trial is also relevant to the question of a legitimate advantage of which the Plaintiffs would be deprived, if the trial should take place in Djibouti.

74.  To answer the Plaintiffs’ concern, the Defendant suggests that eithera judge of the Djibouti Court may move to any place the witness is to hear the evidence, or the witness may testify through video link. The Defendant also claims that it is possible for foreign witnesses to testify on a certificate of declaration before a public officer, if the witness cannot travel to Djibouti. The Plaintiffs have pointed out that these options have only been suggested as possibilities, and that it is unclear, on the Defendant’s evidence, whether any application for Mr Boreh’s evidence to be given by video link would be favourably accepted by the Djibouti Court, and whether the Plaintiffs’ witnesses may give evidence in this way as of right, as opposed to relying on the discretion of the Djibouti Court.

75.  In any event, even if these options can be explored, compared with the ability to procure Mr Boreh’s evidence to be given directly in the Hong Kong court, it is clear that the Djibouti Court is not distinctly or plainly the more appropriate forum for the trial.

76.  As for the location of the documentary evidence, even if they were out of Hong Kong, I cannot see the difficulties that may exist in making them available here.  Any documents relating to the decision-making process of the Defendant, in Hong Kong or Shenzhen, should be available for a trial here. Documents relating to the damage suffered by the Plaintiffs would be located in Dubai.

Governing law

77.  The more controversial aspect is the application of foreign law in the determination of the issues at trial, and whether the Hong Kong Court, or the Djibouti Court, is the more appropriate forum to deal with this.

78.  The Defendant highlights the fact that, apart from Djibouti being the place of commission of the tort alleged by the Plaintiffs (to make the law of Djibouti the governing law), even on the Plaintiffs’ own pleading, they claim that the Defendant’s conduct of procuring or inducing the breach of the Concession Agreements and the JVA is actionable under the law of Djibouti, as a tort as well as constituting unfair competition. On behalf of the Defendant, it was argued that trying the case in Hong Kong not only involves the expense of investigating and proving foreign law, but also the risk of the Hong Kong Court arriving at wrong conclusions on foreign law. If it is to be contended that Djibouti law was applied incorrectly, there will be no opportunity to take the case to the appellate court in Djibouti.

79.  The Defendant also argued that there has not been any decision by the Djibouti Courts on the liability of a party under Article 1391 for procuring or inducing breach of contract. It is said to be a novel point under Djibouti law, and although the genesis of Article 1391 lies in article 1382 of the French Civil Code, French jurisprudence is not binding on the Djibouti Court which is free to develop its own law. The Defendant argued that the Hong Kong Court should not be developing Djibouti law, nor is it the appropriate court to determine questions of public policy of the Republic.

80.  From the expert evidence adduced, there does not seem to be serious dispute that for the tort complained of under the Djibouti Civil Code, the relevant issues for determination at trial are whether there were breaches of the Concession Agreements (if valid); whether there was an act of interference by the Defendant with the performance of the Concession Agreements, with knowledge of the underlying obligations; whether there was damage sustained by the Plaintiffs; and whether there was a causal link between the fault of the Defendant and the damage sustained. In relation to the claim of unfair competition under the Civil Code, the issues for determination are whether there was conduct amounting to unfair competition; loss incurred; and a causal link between the unfair act and the loss.

81.  Although the Defendant claims that no case has been decided by the Djibouti Court on the liability of procuring or inducing breach of contract, and that this is a novel point, it is not disputed between the experts that the Djibouti Civil Code is the same as the French Civil Code. The Djibouti Civil Code was promulgated only in April 2018, but the Plaintiffs’ experts point out that there is ample French case law on procuring and inducing breach of contract, and lawyers in Djibouti make regular reference to French case law before the Djibouti Court.

82.  The Defendant maintains however that French jurisprudence is not binding, that the Djibouti Court is at liberty to formulate its own legal reasoning and principles, and Djibouti law is not bound by or equated with French law. The Defendant argued that there is little guidance to the Hong Kong Court as to how the relevant Article 1391 of the Djibouti Civil Code should be applied, and that the rules have to be, and should be, determined by the Djibouti Court. The Defendant’s expert states that:

“… in principle-based legal systems like the French and the Djiboutian ones – whose style seems to contrast from the pluralistic, fact driven approach of the common law of torts general principles are only guiding principles. These guiding principles ‘do not supply the judge or attorney with rules capable of application’. Such rules have to be determined and implanted by the courts. And they are ‘invisible on the face of the Code itself”.

83.  In Rambas Marketing Co LLC v Chow Kam Fai David [2001] 3 HKC 250, the Hong Kong Court held:

“In cases where substantial and difficult issues of foreign law are involved, the court may well be compelled to stay the proceedings where there is an appreciable risk that justice will not be done. This risk may in certain circumstances be attributable to factors such as expense, but in the usual case would arise where the court was somehow concerned with the possibility that it might reach the wrong conclusion on an important aspect of foreign law. … The courts in Hong Kong (particularly the Commercial Court and the Admiralty Court), given the international identity and nature of the type of commercial litigation and litigants here, are often accustomed to dealing with aspects of foreign law. It does not therefore follow at all that once it is shown that issues of foreign law arise, that this will necessarily be a powerful, much less a decisive factor in favour of a stay. On the other hand, however, it is unrealistic not to acknowledge the fact that complicated issues of foreign law may arise with which the Hong Kong courts will not feel itself competent to deal; it is all a question of degree.” (Emphases added)

84.  Notwithstanding the evidence of the Defendant’s expert, I fail to see the alleged difficulty of ascertaining the guiding principles, under Djibouti law, relevant to procuring or inducing breach of contract. If the trial is to take place in Hong Kong, the trial judge will be hearing the evidence from experts on French law, and Djibouti law if different, to explain the relevant guiding principles applicable to the French Civil Code, and how they should be applied differently under the Djibouti Civil Code. The Defendant’s expert does not dispute that case law in the respective jurisdictions must be considered.

85.  As Leading Counsel for the Plaintiffs pointed out, it is incumbent on the Defendant as the applicant for stay to identify and articulate what the disputed issue of foreign law is, why there is an issue, so that the court can decide whether the issue is indeed as substantial or difficult as Defendant contends, to compel a stay of the action on the basis that there is an appreciable risk that justice will not be done, as the Court might reach a wrong conclusion on an aspect of foreign law. There is no dispute that the issues are breach/unfair competition, knowledge, damage and causation. It is common ground that the relevant provision is the same under French law and Djibouti law. The Defendant accepts that there is no precedent on the point in Djibouti law, and that the parties have to resort to French law and precedents under French law. It has not been explained how, under French or Djibouti law, the issues of breach, knowledge, etc may substantially differ from the Hong Kong Court’s perception and understanding of the relevant principles, for example because these issues have been the subject of divergent judicial decisions or academic controversy, such that the Djibouti judges are more suited to arrive at the right decision, and Djibouti is clearly or distinctly more appropriate than Hong Kong as a forum.

86.  It is also pertinent to bear in mind that English law is the expressed governing law of the Concession Agreements and other relevant agreements such as the Management Agreement and the SPA made by the Defendant.  The JVA and the SPA did not provide for any express governing law, but did contain jurisdiction clauses which did not involve the Djibouti Court.  English law is clearly relevant to the determination at trial of important issues relating to the Concession Agreements and alleged breach thereof.  When the Hong Kong Court is more familiar with English law than the Djibouti Court, I cannot see that the Djibouti Court will clearly be more appropriate as a forum than Hong Kong to decide issues relating to the alleged breaches of the Concession Agreements. As Leading Counsel argued for the Plaintiffs, these governing law clauses in the relevant agreements also demonstrate the parties’ expectations to avoid litigation in Djibouti and Djibouti law, in relation to disputes which arise out of their contractual relationships and dealings.

87.  On behalf of the Defendant, Counsel argued that in determining third party liability for procuring or inducing breach of contract, and the issue of whether there was unfair competition, the Court would have to consider the rationale behind third-party liability under French/Djibouti law, and the public policy or interest of the forum. It was contended that standards of fairness vary, depending on the state of development of a particular jurisdiction. France, being an advanced capitalist country, needs to enforce contracts and discourage unfair competitive behavior, but according to the Defendant’s expert, “less developed countries may adopt a less robust approach” to establishing third-party liability, to avoid being “too intrusive upon freedom of trade and competition”. It is suggested that the Djibouti Court may, with such considerations, decline to follow French case law.

88.  The Defendant’s expert also claims that under French law, the approach to third-party liability requires consideration of all relevant elements, including public interests and national sovereignty, which had led the Republic to enact Law 202 and the Decrees. The Defendant further highlights that in the consideration of public interests and national sovereignty, the Port installations are strategic infrastructures and triggers public law issues. The expert states:

“The consideration of [public interests and national sovereignty] is all the more necessary since under French law, strategic infrastructures such as Port installations fall within the maritime public domain, therefore triggering public law regime. Also, it should be noted that the construction and development of the Port constitutes under French law a public service mission, and that, therefore, contracts entered into in this regard by a public entity are administrative by nature. Yet, French law provides for the right for public entities to unilaterally terminate a contract on grounds of public interest, even where there is no provision for doing so set forth within the contract. Moreover, this option should apply to all contracts entered into by the Administration, which pursues objectives of public interest, regardless of whether contracts are submitted to public or private law.”

89.  Accordingly, the Defendant contends that any issue of public policy of a particular forum should be decided by that forum, referring to CGU International Insurance plc v Szabo [2002] 1 All ER (Comm) 83; EL du Pont de Nemours & Co v Agnew [1987] 2 Lloyd’s Rep 585; and New Link Consultants Ltd v Air China [2005] 2 HKC 260, and that the Djibouti Court should be the appropriate forum.

90.  It has to be borne in mind that the Defendant bears the burden of showing the Djibouti Court to be clearly or distinctly more appropriate as the forum for trial. Whilst claiming, generally, that developing countries have “a mounting concern that the third party’s liability may have become too intrusive upon freedom of trade and competition”, I accept the submissions made on behalf of the Plaintiffs, that the Defendant and its expert have failed to clearly identify the particular socio-economic conditions in Djibouti which may create or call for a difference in the decision of the Court, in finding the existence of breach of contract, or of unfair competition, or damage, or causation, on the facts of this case, to justify departure from French law. The Defendant’s expert has not in fact stated that the Djibouti Court will, applying Djibouti law, apply different standards of fairness.  Having stated the proposition that the Djibouti Court is at liberty not to follow French law, he only asked the rhetorical question as to how one could consider with certainty that the Djibouti Court would blindly adopt French case law and brush aside the potential benefits of a less demanding doctrine in the interests of the economy of Djibouti (paragraph 25 of Professor Fage’s report).

91.  The need to consider public policy and public interests is one of the factors which the Court will include in its assessment of the relative appropriateness of the Hong Kong Court and the Djibouti Court. However, the existence of public policy considerations does not by itself mean that the Hong Kong Court would inevitably decline jurisdiction in favour of the foreign forum. Much will depend on the uniqueness of the policy consideration or the objective identified, and the complexities and circumstances of the case. The Defendant has had the opportunity to adduce elaborate expert evidence on the relevant issues. If such expert advocates any particular principle of Djibouti public policy, or the objective of any particular Djibouti statute/Code, the expert may identify this clearly in the report, and it is open to the Court to apply such public policy principle or objective to the facts and on the evidence available at trial.   The principles so far outlined in the defendant’s expert evidence do not appear to be so unique, or too difficult to be correctly appreciated and applied by any competent court.  Having said that, this Court would in its overall balancing exercise give due consideration to the relevance of public policy principles, and the fact that the Djibouti Court may be more familiar with the application of these policies.

Authority to sue

92.  The Defendant has raised a further issue concerning its dispute over the authority of the 3^rd Plaintiff to sue in these proceedings, relying on the appointment made by the Djibouti Court, on application made by the Republic, of a provisional administrator for the 3^rd Plaintiff (“Administrator”), without notice to the 1^st and 3^rd Plaintiffs. Such order was made on 27 September 2018, and the appointment is said to have replaced the board of the 3^rd Plaintiff until the dispute between the shareholders of the 3^rd Plaintiff is resolved. The appointment was made on application by the Republic, under the Code of Civil Procedure and article 52 of the Articles of Association of the 3^rd Plaintiff, on the basis that there was a dispute and conflict between the shareholders of the 3^rd Plaintiff which may hinder the effective operation of the 3^rd Plaintiff. According to the Defendant, upon the appointment of the Administrator, the board ceased to have authority to act on behalf of the 3^rd Plaintiff and there is no evidence that the Administrator has authorized the 3^rd Plaintiff to commence and take part in these proceedings.

93.  The appointment of the Administrator is challenged by the 3^rd Plaintiff, which claims that the Djibouti Court had no basis or power under Djibouti law to appoint an administrator over the 3^rd Plaintiff on the ground of alleged “tension” between the shareholders as the Republic claims, since the appointment of an administrator was a “reserved matter” which required the 1^st Plaintiff’s consent under the JVA, and disputes between shareholders are subject to an arbitration clause in the JVA and under the Articles of the 3^rd Plaintiff.  Further, the appointment was made without notice to and in the absence of the 1^st and 3^rd Plaintiffs, and is said to be in breach of natural justice.

94.  The Djibouti Court dismissed the 3^rd Plaintiff’s challenge of the appointment of the Administrator, and its appeal against such decision was likewise dismissed by the appellate court.

95.  On behalf of the Defendant, it was argued that the Djibouti Court is the natural forum for determination of the issue of whether the Administrator has authority to act on behalf of the 3^rd Plaintiff, which is a matter of internal management of the 3^rd Plaintiff, incorporated in Djibouti (Ceskoslovenska Obchodni Banka AS v Nomura International Plc [2003] ILPr 20). The Defendant claims that the authority issue is a material and significant part of the dispute, and should be resolved in Djibouti. This is particularly so when some of the issues in the authority challenge are  subject matter of the Djibouti Invalidity Proceedings which are already underway in Djibouti.

96.  The appointment of the Administrator took effect from the date of the order of 27 September 2018. Commencement of these proceedings was authorized by resolution of the board of the 3^rd Plaintiff dated 18 February 2018, before the appointment. The order for appointment of the Administrator states that it was enforceable immediately (on 27 September 2018), but does not on its face invalidate decisions made and acts taken by the board of the 3^rd Plaintiff before the appointment. There is apparently dispute between the experts as to whether the appointment has any retrospective effect. There is no evidence that the Administrator has taken any action yet to challenge the 3^rd Plaintiff’s commencement and continuation of these proceedings. The Administrator in fact failed to intervene in the Rescission Arbitration.

97.  The Plaintiffs argued that the courts have made it clear that authority to sue is not to be raised as a defence at trial, but should be dealt with at the outset as the preliminary issue, or at such other stage when the issue comes to the attention of the Court (Kammy Town Ltd v Super Glory Corp Ltd, unreported, HCA 3524/2003, 14 January 2005, and Airways Ltd v Bowen [1985] BCLC 355). Hence, Leading Counsel for the Plaintiffs argued that any dispute over the 3^rd Plaintiff’s authority to sue does not fall within the forum non conveniens analysis as to the most appropriate forum for the trial of the action, which is the aim of the analysis, as emphasized in the judgment of the Court in Rambas Marketing. Should the authority of the 3^rd Plaintiff be raised, it should properly be raised before trial, and the Plaintiffs argued that if and when it is raised, the Court can deal with it on evidence of Djibouti law, as and if relevant.

98.  In my judgment, the statement made by the Chief Justice in Rambas Marketing was to illustrate that the analysis of the connecting factors should not be made in abstract, or in the vacuum, or with considerations of, for example, discovery or preparation of the case for trial in mind, but with the focus on the trial - when the issues in dispute are to be substantively determined. When the question of a claimant’s authority to sue is raised, the courts have emphasized in Rambas and Airways Ltd that that issue must also be substantively decided by the court, at the outset, and should not be left to be determined at trial, together with the substantive issues between the parties. At paragraphs 13 and 14 of the judgment in Kammy Town, the court observed that the subject application to strike out for want of authority:

“requires a definitive determination by the court seised of the application on the point. In other words, either the action was authorized by the company or it was not. There is no halfway house. The point is to be decided according to the burden and standard of proof - the burden lies with those suing in the name of the plaintiff to prove authorisation. … For those reasons, it is not appropriate for a court, seised of the application, to simply say on the affidavit evidence before it that it is not a ‘plain and obvious’ case of a lack of authority, and therefore the application should be dismissed and the action allowed to proceed to trial. Rather, at the substantive hearing, the court has to see whether the objection raised by the defendant can be summarily disposed of on the affidavit evidence that has been placed before the court for the purpose, and if not, how the objection can be determined and give directions accordingly.”

99.  I do not consider that the nature of the exercise as envisaged in Rambas, by itself, means that the existence of an issue as to the claimant’s authority to sue is irrelevant to the consideration of the factors pointing to the most appropriate forum. The necessity of the Court’s substantive determination of the issue of the claimant’s authority is, in my view, one factor which should be considered when the Court analyzes the question of which is the most appropriate forum for the determination of the claims in the action.

100.  In this case, whilst the appointment of the Administrator may not affect the substance or ownership of the 3^rd Plaintiff’s rights to the relief sought, unlike the case in Ceskoslovenska and in Airways Ltd, whether there was any basis for the Djibouti Court to make the appointment under the Code of Civil Procedure and the Articles of Association of the 3^rd Plaintiff, and whether the board of the 3^rd Plaintiff had the right to continue these proceedings, is disputed.

101.  In the present case, the appointment of the Administrator, and the validity thereof, would appear to depend on issues such as whether there was a dispute and conflict between the shareholders of the 3^rd Plaintiff which may hinder the effective operation of the 3^rd Plaintiff, whether the Djibouti Court could interfere in the management of the 3^rd Plaintiff in the event of “paralysis” of the corporate bodies concerned and the presence of an “imminent danger” for the 3^rd Plaintiff, assessed in the light of the interests of the company, and whether the appointment was necessary when the conflicts between the shareholders threaten the sustainability of the company and to protect the corporate interests of the company.

102.  In Konamaneni v Rolls Royce [2002] 1 WLR 1269, the court considered the right of the claimants to bring a derivative action on behalf of an Indian company. It held that the courts of the place of incorporation of a foreign company would “almost invariably” be the most appropriate forum for the resolution of issues relating to the existence of the right of shareholders to bring such action on behalf of a foreign company. Lawrence Collins J (as he then was) further held that in respect of issues relating to the exercise of discretionary powers of management, considerable weight should be attached to the role of the court of the place of incorporation, in deciding what was the most appropriate forum for the determination of such a claim (paragraph 66 of the judgment). For matters of internal management, they are governed by the law of the place of incorporation, and the courts of that place are best suited to give decisions on the control and extent of the powers of the management (paragraph 55 of the judgment).

103.  On the issue of the 3^rd Plaintiff’s authority to sue, although the related matters in dispute could be decided by the Hong Kong Court as questions of fact on expert evidence, I would agree on balance that they may be more appropriately decided by the Djibouti courts, as to whether the Djibouti Court has jurisdiction under the Code of Civil Procedure to make the order, and whether the appointment was lawful. The issue of the 3^rd Plaintiff’s authority to sue and the validity and effect of the appointment of the Administrator points to Djibouti as arguably the more appropriate forum.  However, in the balancing exercise, I have borne in mind that even excluding the 3^rd Plaintiff from these proceedings, the 1^st and 2^nd Plaintiffs have legitimate causes of action to pursue to trial.

Conclusion on the connecting factors

104.  Overall, in the “qualitative exercise” of the consideration of all the factors relevant to the determination of the issues for trial of this action, I am not persuaded that Hong Kong is not the natural forum with the most real and substantial connection with the action.  Far from the Defendant’s suggestion, that all the connecting factors point to Djibouti, the only factors which do have any connection with the Djibouti Court is the relevance of public policy and the objectives of the New Civil Code, and the fact that one of the issues to be decided may be the validity of the appointment of the Administrator and the consequential authority of the 3^rd Plaintiff to continue these proceedings. All the other factors point to Hong Kong as the forum which has the most real and substantial connection with the action. As Leading Counsel for the Plaintiffs have emphasized, the burden is on the Defendant to discharge the burden of showing that the Djibouti Court is clearly and distinctly the more appropriate forum, and if the factors pointing to the Hong Kong Court and the Djibouti Court as the appropriate forum are equal, the Defendant has not discharged its burden of proof.

105.  The starting point is that the Hong Kong Court already has jurisdiction over these proceedings which were properly served on the Defendant in Hong Kong, as of right.  The issue is why this Court should not exercise that jurisdiction, and whether there is a forum which is more appropriate.  Even after giving due consideration to the relevance of public policies and the relevance of the law of Djibouti, and balancing these against the other relevant factors, I am inclined to agree with the Plaintiffs that the Defendant has failed to discharge its burden to show that the Djibouti Court is clearly or distinctly more appropriate than Hong Kong as the forum for trial of the action.

106.  However, even if I am wrong, and the Djibouti Court has been shown to be distinctly and clearly more appropriate than Hong Kong as the forum, I accept the submissions made on behalf of the Plaintiffs, that they will be deprived of a legitimate personal or juridical advantage if the action is tried in Djibouti. The following are my reasons.

Lack of substantial injustice from the Djibouti Court and juridical disadvantage

107.  It is acutely recognized, that a court will be extremely cautious, and “will approach with considerable circumspection” (in the words of Clarke J in Cherney v Deripaska [2009] 1 All ER (Comm) 333, at paragraph 37) before coming to a conclusion that justice or a fair hearing cannot be obtained in a foreign court.  The cases show that it has to be established, by objective and cogent evidence, that there is a real risk that justice will not be obtained in the foreign jurisdiction.  Comity and judicial restraint require such extreme caution. The Defendant relies on The Abidin Daver [1984] 1 AC 398, Altimo Holdings v Kyrgyz Mobil Tel Ltd (PC) [2012] 1 WLR 1804, Cherney v Derpaska (No 2) [2010] 2 All ER (Comm) 456, Pacific International Sports Club Ltd v Soccer Marketing International Ltd & Ors [2009] EWHC 1839 (Ch), and these principles are undisputed.

108.  The Defendant’s case is that there is no cogent and positive evidence to support the Plaintiffs’ bare assertions of governmental or judicial impropriety, lack of judicial independence or corruption in Djibouti. It referred to the reminder in the judgment of Christopher Clarke J in Cherney v Derpaska [2009] 1 All ER (Comm) 333, that assertions to the effect that a potential claimant cannot obtain justice or a fair hearing in a foreign court are easily made by generalized statements, and repeated the warning against “an echo chamber effect”, “where one commentator states an impression which is swapped with the impression of another commentator, each citing the other as authorities supporting their own thesis without any systematic study of data”.

109.  According to the expert opinion evidence adduced by the Plaintiffs, the Djibouti courts are not independent nor impartial, and Djibouti has structural problems of corruption. The Plaintiffs claim that they had not been able to find lawyers of their choice or preference to represent them in proceedings in Djibouti, and that they had faced violations of procedure and of due process in proceedings instituted there. The Plaintiffs referred to the fact that Djibouti scored only 31 on a 1-100 scale on Transparency International’s 2018 corruption perception Index (“Index”), which is below the average score of 43. The Plaintiffs also rely on the 2017 Human Rights Report of the US Department of State, that despite provisions in the Constitution and Djibouti law, the Djibouti judiciary lacked independence, was inefficient, that there were reports of judicial corruption, and that the Djibouti authorities often did not respect constitutional provisions for a fair trial.

110.  The Plaintiffs’ expert also referred to the 2019 Index of Economic Freedom, and an analysis made by Agence Française pour     le Developpement (“AFD”), with references to the lack of a sound judicial framework, and the need for improvement in commercial justice and criminal procedure in Djibouti. Their evidence is that by virtue of the politically sensitive nature of their case against the Republic, they had only been able to find two inexperienced lawyers who were able and prepared to represent them in legal proceedings against the Republic in Djibouti.

111.  The Defendant’s expert criticized the Plaintiffs’ evidence on the Djibouti judicial system as biased, subjective, and lacking in verifiable and cited instances. According to the Defendant’s expert, independence of the judiciary is provided for under the Djibouti Constitution. In response to the analysis of AFD, that there is room for improvement in terms of civil justice system, procedure and business regulatory environment, the Defendant’s expert claims that there have been significant reforms and improvement in Djibouti in the past years. He accepts that the Djibouti legal system and practice require time to evolve and mature, but explained that there have been reforms leading to improvements in the enforcement of contracts, and increase in investors’ confidence. The expert refers to the fact that there are numerous other countries in Africa and other continents which have similar rankings as Djibouti in the Index, but which have “significant economic weight”. Emphasis was made of the fact that the Index deals with the public sector in general, and not the judicial body specifically. The expert summarized that whilst the legal system in Djibouti requires improvements, there is no basis for, and no objective and cogent evidence to support, the Plaintiffs’ broad statement that the Djibouti court system lacks independence or is subject to corruption concerns.

112.  The question to the determined by the Court is whether there is objective, and sufficiently cogent, evidence to support the Plaintiffs’ claim, that there is a real risk on the particular facts and circumstances of this case that substantial justice cannot be obtained by the Plaintiffs, if this action is to be tried in Djibouti, and that Hong Kong is the forum where it is in the interests of justice for the case to be tried.

113.  The need for cogent evidence is explained in Cherney v Deripaska on this basis:

“In the absence of cogent evidence to the contrary the Court will start with the working assumption, for which comity calls, that courts in other judicial systems will seek to do justice in accordance with applicable laws, and will be free from improper interference or restriction. As this case indicates, where there is evidence to the contrary it may be hotly in dispute and difficult to evaluate. Such evidence is likely, in so far as it derives from reports and articles, to consist of “broad and conclusory allegations, founded on multiple levels of hearsay” and, if so, to be unacceptable as an indictment of the legal system or part of it. … But the Court is not blind to the fact that unfairness or partiality may arise from that which occurs behind the scenes rather than centre stage.”

114.  In the Court of Appeal, Waller LJ further explained this requirement, in paragraph 29 of the judgment of Cherney v Deripaska [2010] 2 All ER (Comm) 456:

“It does not follow that there is a requirement for ‘cogent evidence’ or any particular kind of evidence to establish all of the factors which may lead the court to be persuaded that, despite somewhere else being the natural forum, England is the forum where it is in the interests of all parties and the ends of justice for the case to be tried. The requirement is that the plaintiff, or now the claimant, should ‘clearly establish’ that England is the appropriate forum in that sense. This may be a distinction without much difference but it must not be forgotten that the judge is deciding whether a discretion should be exercised, and some points may seem more powerful on the evidence that he has and some less, but it is for the judge to evaluate the same and reach his conclusion.

I should make clear again … that the judge is not conducting a trial. It is not a situation in which he has to be satisfied on the balance of probabilities that the facts have been established. He is in many cases seeking to assess risks of what might occur in the future. In so doing he must have evidence that the risk exists, but it is not and cannot be a requirement that he should find on the balance of probabilities that the risks will eventuate, eg as in this case that assassination will occur. He has only statements and experts, reports on which he is not going to hear cross-examination. He is able, of course, to take a view as to the cogency of the evidence at that stage. But then he has to make an evaluation taking account of all factors as to whether the claimant (despite Russia being the ‘natural forum’) has discharged the burden of showing that England is ‘clearly the proper forum’.”

115.  The standard of proof, to be satisfied by the party which asserts that justice will not be done in the foreign jurisdiction, was clearly held in  Altimo Holdings v Kyrgyz Mobil Tel Ltd [2012] 1 WLR 1804 to be requirement for evidence of the risk. The judgment of the Board also referred to OJSC Oil Co Yugraneft v Abramovich [2008] EWHC 2613 (Comm), and to the statement by Christopher Clark J that “the risk of judicial impropriety could be inferred from such matters as departure from normal judicial practice, or irrational conclusions”.

116.  In The Abidin Daver [1984] 1 AC 39, the Court referred to some examples of risks of justice not being obtainable:

“The possibility cannot be excluded that there are still some countries in whose courts there is a risk that justice will not be obtained by a foreign litigant in particular kinds of suits whether for ideological or political reasons, or because of inexperience or inefficiency of the judiciary or excessive delay in the conduct of the business of the courts, or the unavailability of appropriate remedies.”

117.  In the present case, we are not considering the alleged inefficiency of the Djibouti judiciary, or excessive delay in the conduct of the business of the courts there. What the Plaintiffs seek to establish is that the nature of their dispute and litigation with the Republic is political and sensitive. The Republic has sought, since 2012, to renegotiate or renege on the 2006 Concession with the Plaintiffs. It attempted to rescind the 2006 Concession by initiating the Rescission Arbitration in July 2014, and by commencing proceedings against Mr Boreh to impugn the 2006 Concession by alleging bribery. When these proved to be unsuccessful, as evidenced by the Rescission Award and the Boreh Judgment which dismissed all of the Republic’s claims, the Republic chose to ignore the Rescission Award and the Boreh Judgment, and used legislative acts and the passing of the Law 202 in order to empower the renegotiation of the relevant infrastructure contracts. When the Plaintiffs commenced the Termination Arbitration to seek a declaration that the 2006 Concession remained in full force and effect, the Republic issued the Decrees to declare the 2006 Concession to be terminated with immediate effect, and proceeded to take physical control of the Terminal, and to transfer the 3^rd Plaintiff’s assets and operations to its own entities.

118.  As the Plaintiffs have emphasized, the Republic has publicly claimed and declared by its acts that the 2006 Concession is considered by it to be not only invalid, but against national interests and policies. The Plaintiffs are seeking orders and remedies which go against these declared interests, and the Defendant seeks these claims to be tried by the Djibouti Court, rather than the Hong Kong Court. Objectively, the Plaintiffs have cause to be concerned whether the Djibouti Court will be able to fairly and independently try the Plaintiffs’ claims, against the Republic’s declared intentions or interests.

119.  The Plaintiffs’ complaint that there is a real risk they may not obtain justice from the Djibouti Court may be demonstrated by at least 2 instances.

120.  In September 2018, the Republic commenced the Djibouti Invalidity Proceedings before the Djibouti Court of 1^st Instance, to invalidate the Articles of the 3^rd Plaintiff (which provide for the shareholders’ division of the positions on the board, voting commitments and the conditions for the dismissal of directors), and the board resolution of the 3^rd Plaintiff authorizing the commencement of the Articles Arbitration and these proceedings. The jurisdiction of the Djibouti Court was challenged by the 3^rd Plaintiff (“Jurisdiction Challenge”), on the basis that the JVA made between the 1^st Plaintiff and PAID for the Republic, as well as the Articles of the 3^rd Plaintiff, contain arbitration clauses which govern “all disputes…either between the Shareholders themselves regarding the Company affairs, or between the Shareholders and the Company”, and there was already the Articles Arbitration which had been commenced.

121.  The Plaintiffs highlighted that in dismissing the Jurisdiction Challenge, the Djibouti Court ignored the provisions of the Djibouti Code of Civil Procedure, which require the Djibouti Court (in accordance with the well-known Kompetenz-Kompetenz principle) to decline jurisdiction, where the dispute before it has been referred to arbitration pursuant to an arbitration agreement, unless the arbitration agreement is manifestly void or manifestly not applicable. The reasoning of the Djibouti Court, in finding the arbitration agreement to be manifestly inapplicable, was that the relevant provision in the Articles refers to a dispute between “the company and shareholders”, whereas the dispute in the Djibouti Invalidity Proceedings commenced by the Republic was only a dispute between “the company and a shareholder”. With due respect, this appears to be an unduly restrictive interpretation of an arbitration clause. The decision of the Djibouti Court has to be viewed in the light of the fact that the Djibouti Invalidity Proceedings concern firstly, the power of the shareholders under the Articles to appoint and dismiss directors and the management of the 3^rd Plaintiff, and secondly, the validity of the resolution of the board of the 3^rd Plaintiff to initiate the Termination Arbitration and these proceedings, both of which relate to and are disputes between shareholders of the 3^rd Plaintiff. The interpretation and reasoning of the Djibouti Court, that the Djibouti Invalidity Proceedings do not concern a dispute between the shareholders themselves, and only covers a dispute between the 3^rd Plaintiff and “a shareholder”, fall in my view within the description of “departure from normal judicial practice, or irrational conclusions” referred to by the Court in OJSC Oil Co Yugraneft v Abramovich, from which an inference of the risk of judicial impropriety or partiality may be made, and it is questionable whether the decision was “intelligible and explicable” to be “within the margin of appreciation for judicial decisions” (Erste Group Bank AG v JSC (VMZ Red October) [2013] EWHC 2926 (Comm)).

122.  As the Plaintiffs have highlighted, the Republic has sought, by the Law 202, the Decrees and the 9/9 Ordinance to rescind and terminate concluded agreements with the Plaintiffs, and to take over the shares and control over the 3^rd Plaintiff. In addition, the Republic has sought by the Djibouti Invalidity Proceedings to reopen issues decided in judgments and awards handed down by competent tribunals and courts in accordance with jurisdiction and dispute resolution clauses agreed to by the Republic and its entities executing the relevant contracts, namely the Boreh Judgment, the Rescission Award and the Termination Award. Before the Djibouti Court, the Republic failed to acknowledge and accept the findings made in any of these decisions which clearly confirmed the validity of the 2006 Concession and the relevant contracts, and dismissed all the claims of invalidity, bribery and alleged illegality made by the Republic.

123.  In particular, the appointment of the Administrator was applied for and granted by the Djibouti Court, despite and clearly against the English Injunction made by the court on 31 August 2018, and subsequently extended, which restrained PDSA and its associates from causing the 3^rd Plaintiff to act on any of the Reserved Matters provided for in the JVA (which include the appointment of administrators) without the 3^rd Plaintiff’s consent.   In dismissing the challenge to the appointment of the Administrator, the Djibouti Court made no reference to the English Injunction against PDSA and its associates, and did not explain whether and how the English Injunction may affect the appointment.

124.  The Plaintiffs claim that an appointment of administrator could only be made in the event of paralysis of the corporate bodies and presence of an imminent danger for the company, as contrasted with the Djibouti Court’s stated basis of the order for appointment, that “there was a dispute and conflict between the shareholders (of the 3^rd Plaintiff) which may hinder the effective operation of (the 3^rd Plaintiff)”.  Their appeal to the Supreme Court against the Djibouti Court of Appeal’s dismissal of the 3^rd Plaintiff’s appeal on the appointment of the Administrator was dismissed by the Supreme Court.  This was on the basis that its Statement of Demand was not filed within the time limit prescribed under the relevant Code of Civil Procedure.  Although this is disputed by the Plaintiffs, how the relevant rules prescribing time for the filing of pleadings are to be construed is a matter of interpretation more appropriate for the Djibouti Courts to determine.  However, the Plaintiffs’ complaints, that they were not notified of the hearing of the appointment of the Administrator in the first place, that the appeal was dismissed by the Supreme Court on its own motion on a purported technicality, without the Plaintiffs being given the opportunity to make submissions on the alleged failure to act within time, and to seek an extension of time if required, all demonstrate in the whole context of the Djibouti proceedings that the Djibouti Court may not give adequate consideration to the Plaintiffs’ legal rights, and that the Plaintiffs lack a fair opportunity to prosecute their claims and assert and protect their rights in Djibouti.

125.  The Plaintiffs have further adduced evidence to support their claim that they had encountered difficulties in finding experienced lawyers who were able and prepared to represent them in their claims against the Republic. Despite the fact, as the Defendant sought to emphasize, of the existence of a shortlist of reputable Djibouti law firms in the guide published by Chambers & Partners, the Plaintiffs have only been able to find three lawyers who were prepared to act for them in Djibouti. The Plaintiffs considered that one of these three had a conflict of interests. The other two informed the Plaintiffs’ representatives that they were taking risks by accepting the case, which was very sensitive and widely covered by the local media. Inability to locate and identify lawyers in the alternative forum, in whom the litigant can have confidence, is an important factor in considering whether the alternative forum was available (Mohammed v Bank of Kuwait and the Middle East KSC [1996] 1 WLR 1483, 1494H-1495G).

126.  I do not find convincing the arguments made on behalf of the Defendant, that the difficulties encountered by the Plaintiffs may have been due to the fact of the terms offered to the local counsel, or the fact that it was the first time the Plaintiffs’ representative was seeking assistance from local counsel and local lawyers preferred to deal with foreign lawyers with whom they had worked before or have a long-standing business relationship.

127.  The fact that (as elaborated in paragraphs 69 to 73 above) the Plaintiff’s important witness, Mr Boreh, will not be able to go to Djibouti to give evidence on the important matters of his role in the negotiation and conclusion of the relevant Concession Agreements between the Plaintiffs and the Republic, which are now alleged by the Republic to have been procured by bribery and are void as illegal or being against public policy and the Republic’s national interests, is a weighty factor in the determination of the appropriate forum, and also the juridical advantage of which the Plaintiffs will be deprived if the action is to be tried in Djibouti, rather than Hong Kong. Mr Boreh’s evidence is relevant and material to refute the Republic’s claim of bribery, and to the Plaintiffs case that the 2006 Concession agreement and the other relevant contracts made between the Plaintiffs and the Republic were validly and lawfully concluded, and whether these contracts were in any way against the public policy and national interests of the Republic. Without his evidence, the Plaintiffs will suffer prejudice and will be deprived of a juridical advantage in the pursuit of their claims against the Defendant, to the extent that substantial justice may not be done. These outweigh any advantage that may be served by having Djibouti law and principles of public policy determined by the Djibouti Court, rather than by the Hong Kong Court on expert evidence.

128.  The Defendant has sought reliance on the fact that it has a claim of indemnity to pursue against the Port Authority in Djibouti (“Indemnity”), in the event that it is held liable to the Plaintiffs in these proceedings. The Port Authority had warranted in writing to the Defendant that the development of the Free Trade Zone would not be in breach of the 2004 Concession, and that the Port Authority would indemnify the Defendant for any claim that may be made against it by the 2^nd Plaintiff. The Defendant claims that the enforcement of the Indemnity is likely to be governed by Djibouti law, and that it intends to prepare its claim under the Indemnity.

129.  I have balanced this against the juridical disadvantage which the Plaintiffs may suffer if the matter is to be tried in Djibouti. Hong Kong procedural rules permit indemnity proceedings to be brought even after findings are made against the Defendant, and if the Defendant decides to pursue the Indemnity by third-party proceedings in this action, it is able to issue such proceedings and to serve such proceedings out of Hong Kong pursuant to Order 16 rule 1 (1) and Order 11 rule 11 (1), RHC. The Defendant therefore will not suffer any prejudice or be deprived of a juridical advantage to pursue the Port Authority under the Indemnity, if these proceedings continue and are tried in Hong Kong.

Conclusion and orders

130.  For all the above reasons, I dismiss the Defendant’s application to stay these proceedings for determination by the Djibouti Court as the appropriate forum.  The costs of the application are to be paid by the Defendant to the Plaintiffs, with Certificate for 2 Counsel.

Appendix