Bunge S.A. (Applicant/Claimant) v Huaya Maritime Corporation of the Marshall Islands (First Respondent/Defendant) Mr Zhu Guo Hua (Second Respondent)
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr. Justice Cranston,Mr Justice Cranston |
| Judgment Date | 27 January 2017 |
| Neutral Citation | [2017] EWHC 90 (Comm) |
| Docket Number | Case No: CL-2016-000237 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 27 January 2017 |
[2017] EWHC 90 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr. Justice Cranston
Case No: CL-2016-000237
Mr Neil Henderson (instructed by Holman Fenwick Willan LLP Solicitors) for the Claimant
Hearing dates: 16 and 22 December 2016
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
On 16 December 2016 the claimant, Bunge S.A. ("Bunge") made an application for an order against the first respondent, Huaya Maritime Corporation ("Huaya"), declaring that it is in contempt of court, and an order for committal for contempt against the second respondent, Zhu Guo Hua ("Mr Hua"), for his role in that contempt as a director, officer or individual in actual control of Huaya. This application flowed from Huaya's failure to comply with disclosure orders of Flaux J dated 19 April 2016 and HHJ Waksman QC dated 3 May 2016, following its failure to comply with an award against it in a London arbitration.
The application notice for the committal application served on Mr Hua did not contain the penalty notice required, informing him of the court's power to send him to prison and seize his assets. I refused to waive this requirement at the first hearing and adjourned it so that he could be informed of these consequences. The adjournment would also provide Mr Hua a further opportunity to consider his position.
At the resumed hearing on 22 December 2016, again Mr Hua did not appear. Nor was there any response from him. Bunge provided the court with emails containing the penalty notice and notifying him of the date of the resumed hearing.
This judgment contains the background to my findings and incorporates my rulings at the hearings.
Background
Huaya Shipping operates from offices at an address in the Shinan District, Qingdao, Shandong Province, China. Mr Hua is the 100 percent shareholder, its representative and sole director. From the evidence Bunge has produced Huaya Shipping is the business organisation handling operational and administrative matters on behalf of various chartering vehicles.
Huaya Maritime Corporation was one of these. It was incorporated in Panama on 23 July 2010 but was dissolved a year later on 12 May 2011. Mr Hua was one of its directors and its secretary. The company chartered ships for Huaya Shipping.
On 30 November 2011, Huaya was incorporated in the Marshall Islands. It appears to have traded as the chartering arm of Huaya Shipping, the latter being identified as the manager of Huaya. The manager's address for Huaya in the charterparty which was the subject of the award, which led to this application, is the same Qingdao address from which Huaya Shipping operates.
Huaya Maritime Corporation was registered as a private limited company in the Seychelles on 3 April 2014. As at mid-2016 it was an active charterer and operated from the same address as Huaya Shipping's Qingdao offices, which is also its registered trading address. Because of the restrictions on the information available about Seychelles private companies, its directors and shareholders are not known.
Because Huaya is a Marshall Islands company, there is no publicly available information about its directors, its other office holders or its shareholders. However, I am satisfied from the information Bunge has produced that Mr Hua is in actual control of Huaya. He is likely also to be or have been at the relevant time a director or officer of Huaya.
Bunge entered a charterparty with Huaya. It was subject to London arbitration, as was an earlier charterparty between Huaya and a London ship broker and agent, Victoria Steamship Co. Ltd. On 5 January 2016 Bunge obtained an arbitral award from a London LMAA Tribunal against Huaya in the sum of US$61,239.10 together with interest and legal costs. That award went unsatisfied.
As a result on 19 April 2016 Flaux J heard Bunge's ex-parte application and made a freezing injunction and ancillary disclosure order against Huaya. Those orders were successfully sent by email to the Huaya Shipping email address on 20 April and hard copy versions were successfully delivered by courier to the Qingdao office of Huaya Shipping on 21 April. There was no response and no disclosure given of its assets. In late April 2015 a member of Clarksons, the shipping brokers, reported that in a conversation with Mr Hua "it seems that the guy has consulted with his lawyers and he seems to have gotten advice that as long as he doesn't travel to UK there's not much we/court could do to him personally".
Huaya did not attend the hearing on the return date of 3 May 2016. HHJ Waksman QC continued the freezing injunction and repeated the ancillary disclosure order. Those orders were also successfully emailed and couriered to Huaya. Again there was no response from Huaya and no disclosure of its assets.
Huaya was obliged by these orders to provide disclosure of its worldwide assets in excess of US$10,000 within 24 hours of the orders being served on it and to produce an affidavit verifying that information within 48 hours.
On 15 June 2016 Bunge sent an email and couriered a letter to Mr Hua to bring to his attention the seriousness of the breach of the freezing and disclosure orders. These highlighted the penal notice. The email and letter asked for Mr Hua's proposals on how he intended to comply with the orders. When the courier company telephoned Huaya Shipping in advance of attempting to deliver the 15 June letter to Huaya Shipping's Qingdao office, they were advised that Mr Hua was currently out of the country and the letter was not of any use to him. In the letter, Mr Hua was informed that the solicitors were preparing an application for a committal order and its consequences were explained to him.
The email of 15 June from Bunge's solicitors was also sent to the shipping brokers, Clarksons, to pass on to Mr Hua. Bunge were informed by a message dated 16 June 2016 from Clarksons that this message had been passed on to Huaya.
Bunge made the application for the contempt order against Huaya and the order for committal against Mr Hua as its director, officer or the individual in actual control for Huaya's failure to comply with the disclosure orders.
On 15 September 2016, Bunge's solicitors served the application. It stated that Mr Hua had to file and serve evidence in response by 2 October 2016. On 6 October Bunge's solicitors wrote again stating that Mr Hua had filed no evidence, and giving him a further 48 hours to do so before it took steps to fix a hearing. On 14 October 2016 the solicitors wrote to Mr Hua explaining that the hearing of the committal application had been fixed for 16 December 2016 and highlighted that it may result in the court committing him to prison for contempt.
On 14 and 15 December further emails from Bunge to Huaya attached the bundles for the hearing and Bunge's skeleton respectively.
Omission of penal notice in application notice
The application notice for the committal served on Mr Hua did not contain a penal notice. That notice is in the form of Annex 3 to the Practice Direction to Part 81.
At the hearing Bunge submitted that I should waive the requirement that the application contain the penal notice. The omission to include it had not caused any injustice to Mr Hua, Bunge contended, because he had been given every opportunity to respond to the application. He had also been informed of its potential consequences and the date of the committal hearing. Bunge's solicitors in their emails of 15 June 2016 and 15 September 2016 had quoted the penal notices in the disclosure orders, pointed out the seriousness of his failure to comply, informed him of the consequences of a committal order and of the need to produce evidence. Mr Hua's response was to ignore the situation. If the application notice had contained the required wording, Bunge concluded, it would almost certainly have made no difference.
Paragraph 13.2(4) of the Practice Direction to Part 81 of the Civil Procedure Rules ("the CPR") provides that
"the application notice must contain a prominent notice stating the possible consequences of the court making a committal order and of the respondent not attending the hearing. A form of notice which may be used is annexed to this Practice Direction at Annex 3".
Paragraph 16.2 of the PD provides that:
"The court may waive any procedural defect in the commencement or conduct of a committal application if satisfied that no injustice has been caused to the respondent by the defect".
This is the same wording as paragraph 10 of the previous Practice Direction to RSC, Order 52.
In Nicolls v. Nicholls [1997] 1 WLR 314 Lord Woolf MR gave guidance on the approach to be taken by the court where there were procedural defects in a committal application under the RSC provision. At p.326–327 he said:
"1. As committal orders involve the liberty of the subject it is particularly important that the relevant rules are duly complied with…
2. As long as the contemnor had a fair trial and the order has been made on valid grounds the existence of a defect either in the application to commit or in the committal order served will not result in the order being set aside except insofar as the interests of justice require this to be done.
3. Interests of justice will not require an order to be set aside where there is no prejudice caused as a result of errors in the...
To continue reading
Request your trial
-
Sang Cheol Woo v Charles C. Spackman
...v Drum Risk Management [2015] EWHC 3748 (Comm) at para. [7] cited in Bunge S.A. v Huaya Maritime Corporation of the Marshall Islands [2017] EWHC 90 (Comm) at para. 34. 16 Petroval SA v Stainby Overseas Limited at Others, BVIHCV 2007/0291 BVIHCV 2007/0291 (Unreported, delivered 7th Februar......
-
La Dolce Vita Fine Dining Group Holdings Ltd v Zhang Lan
...Trade Finance Fund v Drum Risk Management Ltd [2015] EWHC 3748 (Comm), Bunge SA v Huaya Maritime Corporation of the Marshall Islands [2017] EWHC 90 (Comm), Law Lai Lan v Tamang Prem Candr [2018] HKCFI 536). 16. There is no evidence to suggest that the Defendant acted under pressure in refus......
-
La Dolce Vita Fine Dining Co Ltd v Zhang Lan
...Trade Finance Fund v Drum Risk Management Ltd [2015] EWHC 3748 (Comm), Bunge SA v Huaya Maritime Corporation of the Marshall Islands [2017] EWHC 90 (Comm), Law Lai Lan v Tamang Prem Candr [2018] HKCFI 536). 16. There is no evidence to suggest that the Defendant acted under pressure in refus......