As the national “Going Global” strategy continues to advance, cross-border commercial disputes have increasingly become a practical challenge for Chinese enterprises. In this context, the deep involvement of mainland law firms in common law cross-border litigation to protect the legal rights of Chinese enterprises has become an important topic in the legal industry. Recently, Zhenghan Law Firm successfully participated in a “multi-jurisdictional Hong Kong litigation case.” By adopting a cross-jurisdictional coordination model centered on the client’s needs, the firm selected and collaborated with Hong Kong Senior Counsel and a Hong Kong firm of solicitors. By bypassing complex factual disputes and avoiding pushing the client into an endless quagmire of overseas litigation, the case utilized jurisdiction as its core strategy. After first-instance and appeal proceedings, the firm successfully defeated an exorbitant claim filed by a Japanese enterprise in the High Court of Hong Kong, setting a new benchmark for mainland law firms collaborating with Chinese enterprises in overseas rights protection.
In addition to receiving client recognition, this case was also nominated as a “2024 Outstanding Dispute Resolution Case by Shanghai Lawyers.” (Click to view: Three Cases of Zhenghan Law Firm Selected for the Shanghai Bar Association’s “2024 Outstanding Dispute Resolution Cases by Shanghai Lawyers” List)
Case Highlights
An overseas trading platform of a Chinese state-owned enterprise (Company S) had over a decade of international trade relations with a mainland enterprise (Company D), part of which involved a Japanese enterprise (Company N). These transactions involved Mainland China, Hong Kong, and Japan. In 2022, Company N suddenly filed a high-value claim against Company S in the High Court of Hong Kong, citing several grounds including unjust enrichment, breach of contract, collusion, misrepresentation, and tort.
Case Difficulties
Factual Difficulty: A “Rashomon” of Transaction Structures
• The parties had vastly different perceptions of the trade model, and their respective documentary evidence conflicted and was difficult to reconcile.
• The trade structure was complex, involving multiple roles such as intermediaries, processors, and domestic/overseas buyers; furthermore, key personnel had retired or resigned, making it difficult to reconstruct the facts.
• Contract texts, transaction records, and email communications spanned decades, with materials scattered across three locations and failing to match each other.
Legal Difficulty: Multi-jurisdictional Legal Maneuvering
• The case involved three legal systems—Mainland China, Hong Kong, and Japan—making the application of law complex.
• Procedures in the High Court of Hong Kong are complex, involving stages such as witness cross-examination, leading to high cross-border coordination costs.
• The causes of action (basis of claim) raised by Company N were extremely complex, spanning contract law and tort law, while aspects like contract interpretation and performance involved the overlapping application of Hong Kong and mainland law.
Core of the Judgment
Defending the “Separability Principle” of Exclusive Jurisdiction Clauses and the Extremely High Threshold for Evidence of Fraud
The High Court of Hong Kong’s judgment reaffirmed the separability of exclusive jurisdiction clauses; even if a plaintiff alleges that the entire main contract is a scam or a tool for fraud, it is insufficient to allow them to escape the constraints of the jurisdiction clause. The court clearly pointed out that to overturn an exclusive jurisdiction clause on the grounds of fraud, it must be proven that the fraud was “specifically directed at the jurisdiction clause itself,” and the court is cautious in determining allegations of fraud unless there is conclusive evidence. This case reaffirms the validity of exclusive jurisdiction clauses and maintains the reasonable expectations of commercial entities regarding dispute resolution methods.
Reaffirming the Application of the Forum Non Conveniens Principle
According to the summary by the Court of Final Appeal in the case of SPH v SA: the applicant must prove that Hong Kong is not the natural or appropriate forum (i.e., it does not have the most real and substantial connection with the litigation) and that there is another clearly or distinctly more appropriate available forum; if the applicant proves these two points, the plaintiff in the Hong Kong litigation must then prove that they would be deprived of a legitimate personal or juridical advantage in the other court; if the plaintiff can prove this, the court must weigh the advantages of the alternative court against the disadvantages the plaintiff might suffer, and will only refuse a stay if the plaintiff can prove that substantial justice cannot be achieved in the appropriate court. In this case, factors such as the place of contract performance, the place of the tortious act, the location of witnesses, and choice of law issues (including the supervision of state-owned enterprises) all supported the Shanghai courts as the more appropriate forum.
Resolutely Maintaining the Fairness and Credibility of the Mainland Judicial System
Company N had argued that if the case were heard by a mainland court, the court might favor Company S as a state-owned enterprise, thereby placing Company N at a judicial disadvantage. The judge refuted this, pointing out that such allegations must be supported by conclusive evidence, and that groundless disparagement and attacks on the fairness of the mainland judicial system are “unfounded.” This case serves as a powerful endorsement of the objectivity and fairness of the mainland judicial environment.
Breakthrough Highlights
1. Cross-jurisdictional “One-stop” Integrated Management
Led by mainland lawyers: Considering that the main facts and evidence were located in the mainland, this case was coordinated by lawyers from Zhenghan Law Firm, who were responsible for core tasks such as factual sorting, evidence collection, and witness interviews. Through reasonable division of labor and collaboration, the efficiency and smoothness of communication between overseas lawyers and the client were further improved.
2. Procedural Priority: Jurisdictional Objections Turned the Tide
Precise positioning of weaknesses: It was discovered that Company N’s true intention in choosing to sue in Hong Kong was to circumvent the mainland’s statute of limitations.
Legal maneuvering: By arguing elements such as the core location of the transaction and the agreed jurisdiction clause, the court was successfully persuaded to accept the existence of a valid exclusive jurisdiction clause.
3. “Rebirth” of the Evidence Chain
Reconstruction of historical transactions: Through the recovery of massive emails, verification of transaction documents, tracing of bank statements, and written testimony from retired personnel, key transaction information was reconstructed and legal facts were established, preparing for future substantive handling.
Breakthrough in cross-border evidence collection: By making full use of the multiple rounds of pleading exchange in Hong Kong proceedings, Company N was strategically forced to proactively submit and disclose all transaction documents in its possession, thereby gaining the initiative regarding the facts.
Profile of the Collaborating Hong Kong Barrister in this Case
Victor Dawes SC
Senior Counsel
Victor Dawes SC is a member of Temple Chambers in Hong Kong, specializing in dispute resolution in the commercial and financial sectors. His practice covers complex cases such as banking and financial disputes, corporate and shareholder disputes, securities and regulatory matters, trusts, insolvency, and arbitration. He was admitted to the Hong Kong Bar in 1999 and appointed Senior Counsel in 2015. He has long been involved in important litigation and arbitration proceedings at the High Court and appellate levels, possessing extensive courtroom and strategic experience. Academically, Mr. Dawes graduated from the London School of Economics and Political Science with an LLB degree and subsequently completed the PCLL at the University of Hong Kong. In addition to private practice, he is actively involved in public and professional services, having served as Chairman of the Hong Kong Bar Association (2022-2024), and currently serves as a Non-Executive Director of the Hong Kong Securities and Futures Commission and a Recorder of the High Court, reflecting his wide recognition and influence in the legal profession and regulatory fields.
Phone: (+852) 2523 2003
Email: vdawes@templechambers.com
William Wong
Barrister
William Wong is a member of Temple Chambers in Hong Kong. He qualified as a barrister in Hong Kong and joined the chambers in 2024. He primarily engages in a broad civil practice, accepting instructions related to various types of dispute resolution and arbitration. He graduated from the London School of Economics and Political Science with an LLB (First Class Honours), the University of Oxford with a BCL, and Harvard University with an LLM, and obtained his PCLL from the University of Hong Kong, receiving numerous scholarships and academic awards during his studies. Prior to practice, he served as a Judicial Assistant to a High Court judge and assisted international arbitrators in handling cases. His practice areas cover commercial disputes, company law, securities regulation, insolvency, arbitration, and public law, and he has participated in several High Court litigations and international arbitration matters. Additionally, William Wong is involved in legal publishing and research and is proficient in English, Cantonese, and Mandarin.
Phone: (+852) 2523 2003
Email: wwong@templechambers.com
Profile of the Collaborating Hong Kong Firm of Solicitors in this Case
Y.F. Siu Co. is a Hong Kong-based law firm with extensive legal service capabilities, providing diversified legal services to corporate and individual clients through a robust professional legal network. According to its official website, the firm’s business scope covers several areas, including China-Appointed Attesting Officers, international notarization, corporate finance and capital markets, corporate rescue and insolvency, litigation and arbitration, conveyancing, intellectual property, and trust arrangements, meeting the comprehensive legal needs of contemporary business society. Adhering to the tenet of “providing the highest quality legal services in the most effective way,” the firm emphasizes providing professional support to clients in a pragmatic and efficient manner. Most team members graduated from prestigious law schools in the UK and Hong Kong and received training at large local law firms, possessing the experience and skills to handle complex cases. They are also familiar with Asian business culture and can serve local and mainland market clients in multiple languages, with considerable experience in cross-border legal services.