Judicial comity between Courts in the Cayman Islands and in Hong Kong
In the decision of Re Altair Asia Investments (delivered on 16 March 2020) the Grand Court adjourned a creditor’s winding up petition pending delivery of judgment in Hong Kong in proceedings against the guarantors of the debt on which the petition was based. The decision exemplifies judicial comity between the Cayman Islands and Hong Kong where judges are astute to avoid jurisdictional clash or inconsistent findings.
Justice Parker’s judgment was circulated in draft on 11 March 2020. The same day the draft was circulated, the Hong Kong Court (Mr Justice Harris) in fact delivered its decision and made the winding up order. Justice Parker’s decision is therefore issued on the basis of the facts as they were when the matter was heard.
His Lordship noted:
- There is a long line of authority expressing support for a litigant’s choice to sue a defendant in a particular court or tribunal. The court’s inherent power could be used to stay proceedings on case management grounds, without interfering with the right of the plaintiffs to choose whom to sue or not to sue, on the basis that the court is restricting only the order in which the proceedings are pursued (Reichhold per Moore Bick J).
- A stay will ordinarily only be granted in rare and compelling circumstances. The risk of conflicting judgments may amount to a strong reason for granting a stay, not just for reasons of judicial consistency but also because of practical difficulties which otherwise arise (Bundeszentralamt per Hildyard J).
Justice Parker found that there was a risk of conflicting judgments if the Court were to proceed and determine the petition in advance of the Hong Kong Court. The issue of whether the company was liable to the petitioner for redemption proceeds was before both courts. It would be inappropriate for the Cayman Islands’ Court to provide a reasoned judgment on the petition where there is a clear risk of inconsistent findings on the same legal and factual issues, particularly where Hong Kong law is not dissimilar to Cayman Islands’ law.
In Hong Kong, Mr Justice Harris ordered the winding up of the company after concluding that there was no genuine dispute on the debt. On a separate issue of whether the Court should make a bankruptcy order against a debtor, Mr Justice Harris adjourned the matter as it was not clear whether service had been properly effected.