Oue Lippo Healthcare Limited v. David Lin Kao Kun

At a glance

Parties

OUE Lippo Healthcare Limited (Singapore) v. David Lin Kao Kun

Case no.

HCCT 4/2019; [2019] HKCFI 1630

Court

Hong Kong Court of First Instance (Construction and Arbitration Proceedings), Hon Coleman J in Chambers

Underlying award(s)

SIAC Award No 002 of 2019 of 7 January 2019, SIAC Arbitration No 6 of 2018 (sole arbitrator)

Treaty

New York Convention (enforcement of a Convention award); arbitration clause in Clause 13.2 of a Share Purchase Agreement of 18 February 2013

Sector

Healthcare; hospital share sale

Outcome

Application to set aside leave to enforce dismissed (25 June 2019). The Enforcement Order became final and the Mareva injunction was continued until further order.

Amount

Award: RMB 58,837,898 and US$32,840,185.87 in damages, plus SG$842,822.66 in costs and fees, with interest (about HK$330 million in total). Costs of the court proceedings awarded to the plaintiff on an indemnity basis.

The dispute

OUE Lippo Healthcare Limited, a Singapore-listed company, became the purchaser under a 2013 Share Purchase Agreement by a Deed of Novation. Under that agreement Dr David Lin Kao Kun and Dr Er sold the ultimate interest in a hospital in Wuxi. The award found that the defendant took the purchase price and then had the interest transferred back to himself. The defendant did not take part in the SIAC arbitration, and a sole arbitrator ordered him to pay damages. The Hong Kong court granted leave to enforce the award ex parte, together with a Mareva injunction. The defendant applied to set aside that leave on five grounds: the arbitration agreement was invalid because the SPA was forged; he had not received proper notice; he had been unable to present his case; the award exceeded the scope of the submission; and enforcement would be contrary to public policy. On the eve of the hearing he sought to withdraw his applications.

Key holdings

1. Leave to withdraw the set-aside application was refused. Whether the award could be enforced was a question that needed to be, and could be, answered now. The defendant could not oppose the plaintiff's case and then give up at the last moment to avoid adverse findings of fact. ¶¶ 22, 27–30
2. Validity Point rejected. The Court found as fact that the Original SPA and its Arbitration Clause were valid and binding and that the defendant agreed to them. Witnesses saw him sign and initial the SPA. The pagination came from combining two versions at his own representative's suggestion. He had himself threatened to invoke the clause in 2014. ¶¶ 59–65
3. Notice Point and inability to present his case rejected. The Shanghai Address was the contractual address for notices under Clause 10.1. The Court found that the defendant received the notices sent there and by email. Service was New York Convention compliant, and he chose not to take part. The arbitrator had also found proper notice under the SIAC Rules. ¶¶ 76–92
4. Scope Point rejected. By the Deed of Novation the plaintiff was substituted in all respects, so it could rely on the Arbitration Clause. The matters decided in the award fell within that clause. The public policy ground added nothing to the other grounds. ¶¶ 50, 93–98
5. The set-aside application was dismissed and the Enforcement Order became final. The Court rejected the allegations of non-disclosure and found a real risk of dissipation. It dismissed the Discharge and Variation Summonses and continued the Mareva injunction until further order. ¶¶ 99–102
6. Indemnity costs were awarded to the plaintiff on all matters. This followed the usual approach in arbitration-related matters, and the defendant had run a wholly unmeritorious case. ¶¶ 104–105

Procedural history

1. 7 January 2019SIAC award made in SIAC Arbitration No 6 of 2018 and registered as Award No 002 of 2019.
2. 15 January 2019B Chu J grants ex parte leave to enforce the award in Hong Kong, with an interim Mareva injunction.
3. 25 January 2019DHCJ Field extends the defendant's time to apply to set aside, continues the Mareva injunction and adjourns the summonses for substantive argument.
4. 15 February 2019Defendant files his application to set aside the leave to enforce.
5. 3 June 2019Coleman J adjourns the hearing to let the defendant file further evidence. The defendant files none.
6. 24 June 2019Defendant issues a summons seeking leave to withdraw his applications.
7. 25 June 2019Judgment: leave to withdraw refused, set-aside application dismissed, injunction continued, indemnity costs awarded.

Tribunal, counsel and experts

Decided by

• Russell Coleman Judge, Hong Kong Court of First Instance

For the claimant

Howse Williams

For the respondent

ONC Lawyers

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Keywords

• enforcement
• New York Convention
• set aside leave to enforce
• SIAC
• Hong Kong
• forgery
• validity of arbitration agreement
• proper notice
• due process
• scope of submission
• novation
• Mareva injunction
• indemnity costs
• Wuxi Hospital
• share purchase agreement
• public policy
• withdrawal of application

Summary generated with AI from the published documents — refer to the award for the authoritative text.