Exploring Offshore Litigation Harneys

The five months' march of preparing for my wedding day is finally coming to an end in May. From the booking of wedding banquets to searching for service providers (photographer, videographer, beautician, host, banquet decoration, etc), to finding cute puppets for children and gifts for the guests, my husband and I spend almost every weekend comparing the different options and bargaining for a better price.
I am excited to mark my diary and the first thing that I do is to prepare a timetable for what will happen on my big day. Usually:- The bride needs to get up very early - a 5am - to spend three hours in make up and to prepare her Xiuhe dress, a traditional Chinese outfit.
The bridegroom also needs to rise early to get properly dressed.
At a time considered to be of great fortune, the bridegroom will head to the bride's home to pick up the bride. The bridesmaids will block the room door and request the bridegroom to complete several tasks, for example to say love in ten different languages to the bride or to do 10 push-ups. If the bridegroom and his groomsmen fail to perform to the bridesmaids' satisfaction, they need to give hong bao (red packet filled with money) to the bridesmaids.
Following the games, the young couple serve tea to the bride's parents to show gratefulness and respect.
The couple then head to the wedding home to serve tea to the bridegroom's parents. The whole process is called Jie Qin (pick up your wife).
During the process, professional photographers and videographers record the special moments and prepare short videos to be played later that day at the wedding ceremony.
Thereafter, the couple, their family and friends will head to the wedding banquet for a formal wedding ceremony hosted by the moderator and lunch or dinner will be served.
This is what a popular traditional wedding looks like now in China. It is quite costly and very time consuming in terms of preparation. Hence many people, including some of my close friends, opt for a celebration with their close family and friends in a nice tiny sweet bistro, or celebrate their wedding by travelling. Either way, I hope everyone enjoys their wedding day and every day, whether or not they are getting married.

On 15 May 2024, the Supreme Court unanimously allowed the appeal in RTI Ltd (Respondent) v MUR Shipping BV (Appellant) [2024] UKSC 18, addressing a number of fundamental points, including whether payment in alternative currency could get around sanctions for the purpose of a force majeure clause.
The appeal concerned the interpretation of a force majeure clause in a shipping contract between MUR Shipping BV and RTI Ltd. Pursuant to that contract, RTI was required to make monthly payments to MUR in US dollars. The contract included a force majeure clause with a "reasonable endeavours" proviso, stating that the specified event would only be a force majeure event if "it cannot be overcome by reasonable endeavours from the Party affected".
The subsequent imposition of US sanctions on RTI's parent company made it difficult for RTI to make payments in US dollars. MUR argued that the imposition of sanctions constituted a force majeure event and suspended shipments under the contract. RTI disputed this and offered (i) to make payments to MUR in euros, which MUR's bank could convert into US dollars on receipt; and (ii) to indemnify MUR for any resulting loss. MUR rejected RTI's offer.
The central issue on appeal was whether the exercise of reasonable endeavours may require the affected party, if it is to be entitled to rely on the force majeure clause, to accept an offer of non-contractual performance from the other contracting party in order to overcome the effects of the specified event. As noted in the Supreme Court's press summary, "[a]lthough this question arises in relation to a specific force majeure clause, it has significant implications for the interpretation of reasonable endeavours provisos and force majeure clauses more generally".
Supreme Court findings
The Supreme Court agreed with MUR and held that, absent express wording, a reasonable endeavours proviso does not require acceptance of an offer for non-contractual performance, and therefore, MUR was entitled to rely on the force majeure clause. The Court, in summary, provided the following reasons for its judgment:
Contractual performance: Contractual performance means performance of the contract according to its terms. Failure to perform means failing to perform in accordance with those terms. The purpose of a reasonable endeavours proviso is to maintain, not alter, that contractual performance.
Freedom of contact: This principle includes the freedom not to contract and extends to the freedom not to accept non-contractual performance.
Clear words are needed to forgo valuable contractual rights: MUR had a right to insist on payment in US dollars and to refuse payment in any other currency. This is consistent with the general principle that contractual parties do not forego their valuable contractual rights without clear indication that this was their intention.
Contractual certainty: There was no justification for creating needless additional uncertainty by departing from the standard of performance provided by the contract's terms.
This decision will be of significant interest to legal practitioners across various practice areas, including sanctions, for its consideration and clarification of fundamental concepts of contract law.

So, here I am, Benjamin Bronzon, an Aussie lawyer from Sydney diving headfirst into the bustling metropolis of Hong Kong. Crikey, what a change! But let me tell you, it has been a ripper of a ride so far.
Since arriving in "Honkers" in October 2023, I've come to appreciate the city's allure beyond its impressive skyline and rooftop bars. As an Australian, you'll appreciate the multicultural blend of Western and Eastern influences. Hong Kong is a gateway to Asia (and not too far from home), making it an ideal base for expats seeking new adventures, career progression, and international connections. Before you know it, you'll swap "no worries" for "add oil!" - a Hong Kong battle cry that means "keep going!"
So why did I make the move? Aside from the obvious tax benefit, I saw an exciting opportunity to challenge myself with new cultures and people. Of course, having an incredibly supportive workplace at Harneys helps too. From a professional standpoint, many institutional restructuring matters are conducted in the offshore market, so I knew I wanted to be part of these globally recognised transactions dealing with stakeholders all over the globe.
So what are my quick tips for those considering making a move offshore:
Be ready to learn: While the Cayman Islands, BVI, and Bermuda are common law jurisdictions similar to Australia, the learning curve is still steep. There are also things to get used to, such as collaborating with onshore counsel and being aware of time-zone differences. You'll need to familiarise yourself with different legislation and rules. I had to go back to basics, doing research and reading the law again, which gives you a big healthy dose of humility. Just remember, add oil!
Find a neighborhood that suits you: Take your time to explore neighborhoods that tick your boxes. Central, Mid-Levels, Kennedy Town, Happy Valley, and Wan Chai are popular among expats.
Networking: Many Aussies have made Hong Kong their home away from home. Find networks, clubs, and associations that will help you connect with others. For Australians, popular picks are AustCham, the Cricket Club, and the Rugby Club. Do not be afraid to put yourself out there.
So, here is the verdict: Life in Hong Kong is like a Tim Tam - you take a bite, and suddenly you're hooked. The pace, the people, the pulse - it's electric. And as I sign off from my new digs, I raise my glass (of Bundy Rum, of course) to my new life in Hong Kong.

In the recent decision of White v O N Drilling Ltd, the Singapore Court of Appeal upheld the grant of a permanent injunction restraining a former director of the Respondent companies from purporting to act on the Respondents' behalf in maintaining Mexican restructuring proceedings on the basis that the comity doctrine did not apply because the interim injunctions were not anti-suit injunctions and the court would prioritise protecting its own jurisdiction and orders.
The Respondents were Singapore companies who each owned a drilling rig deployed in Mexican waters. The Respondents' directors granted a power of attorney to Mexican lawyers to commence restructuring proceedings in Mexico in the Respondents' names (such proceedings referred to as the Oro Concursos). However, the relevant provision in the Respondents' Articles prohibited the companies and their directors from initiating the Oro Concursos without a vote on behalf of a bond trustee which had not been obtained. The Singapore High Court granted interim injunctions in respect of continuing the Oro Concursos. Nonetheless, the Oro Concursos continued in Mexico in breach of the Singapore Court's interim injunctions. The Singapore High Court then granted a permanent injunction. One of the former directors, Mr White, appealed on the ground that the permanent injunction conflicted with Mexican Court decisions citing judicial comity. That argument failed.
Although the submissions were wide ranging, what is most likely to be of interest for international practitioners is the Court of Appeal's reasoning of when the doctrine of comity will not apply.
The Court of Appeal affirmed previous Singaporean authority that "not all injunctions which [restrain] the pursuit of … foreign proceedings can be classified as anti-suit injunctions". In this case, the permanent injunction was not an anti-suit because it did not restrain the Respondents from continuing the Oro Concursos, but rather restrained a former director of the Respondents (Mr White) from purporting to act on the Respondents' behalf in maintaining the Oro Concursos. In other words, the injunction did not enjoin Mr White from commencing or continuing proceedings in a foreign Court in his own name.
The Court of Appeal also considered the relevance of comity in situations where an allegedly inconsistent foreign judgment post-dates a local decision and where the foreign judgment had allegedly been obtained in breach of the local decision. Here, there was no dispute that the breach of the Articles was continuing and that the Mexican decisions were procured in breach of the Singapore interim injunctions. To deny the permanent injunction would have been tantamount to not giving effect to the earlier interim injunctions, which in turn would effectively have extended recognition to the Mexican decisions procured in breach of the injunctions. The Singapore Court of Appeal gave priority to its own interim injunctions over comity considerations: "judicial comity could not be applied at the expense of the court's role to protect its jurisdiction and orders."
The decision is important because it showcases the limits of the comity doctrine where an injunction can be framed not as a restraint against a party continuing proceedings in their own name but rather on behalf of another. The decision also suggests that courts will be unwilling to apply the comity doctrine where this would lead to the undermining of their own orders. Ultimately, considerations of comity must be balanced against the concerns of the local forum in upholding its constitutional role to oversee the administration of justice and safeguarding the rule of law within its jurisdiction.

In the recent decision of AA v JTC (Cayman) Limited, the Grand Court of the Cayman Islands sets out for the first time the principles applicable to an application by an enforcer of a STAR trust for the Court's approval of a 'momentous' decision in relation to the proposed exercise of the enforcer's fiduciary powers.
The 'momentous' decision for which the approval of the Court was sought was the enforcer's decision to instruct the trustee to exercise certain rights attached to shares held by the trustee for the benefit of the trust. The exercise of these share rights was central to the purpose of the trust.
The Court was satisfied that an enforcer has standing to apply for the Court's blessing of a 'momentous' decision on the same legal basis as a trustee, having had regard to sections 48 and 102 of the Trusts Act and the inclusion of "enforcer" in the relevant Grand Court Rule (Order 85, rule 7(1)) relating to applications under section 48 of the Trusts Act. Accordingly, the Court would apply the principles established in Public Trustee v Cooper [2001] WTLR 901 in relation to 'Category 2' cases where a trustee seeks the Court's blessing for a momentous decision.
In such cases, the Court will consider the following questions:
Does the trustee or enforcer have the power to enter into the proposed transaction?
Is the Court satisfied that the trustee or enforcer has genuinely concluded that the proposed transaction is in the interests of the trust and the beneficiaries and/or in furtherance of its purposes?
Is the Court satisfied that a reasonable trustee or enforcer would arrive at the relevant conclusion?
Does the trustee or enforcer have any conflict of interests which prevents the Court form granting the approval sought?
In this case, the Court approved the enforcer's decision, it being satisfied that:
the enforcer clearly had the power to give the relevant instruction;
the enforcer had genuinely decided that the proposed instruction to the trustee was in the best interests of the trust and in furtherance of the purposes for which it was established;
a reasonable enforcer could have reached the same decision, which had not been entered into precipitously, but following careful deliberation and the receipt of appropriate legal advice; and
the enforcer was not impeded by conflicts of interest. Importantly, the Court noted that what might be considered as potential conflicts of interest were properly identified in discharge of the duty to give full and frank disclosure of such matters when making such an application.
This case provides much welcomed confirmation of an enforcer's standing to invoke the Court's advisory jurisdiction and sets out clearly the questions the Court will consider in determining an application for the Court's approval of a 'momentous' decision under the STAR trust regime.

In the recent Hong Kong case of In the Matter of Sino Oil and Gas Holdings Ltd, Madam Justice Chan of the Hong Kong High Court handed down a judgment, refusing to sanction a scheme of arrangement that was approved at a scheme meeting held in December 2023.
In this case, the Judge noted that the scheme document had very dense description that was "hard to grapple even for lawyers and the court" and the company made no attempt to describe in a succinct or intelligible manner the key commercial terms and the effect of the restructuring. The Judge highlighted a number of unusual and questionable features of the restructuring that were not drawn to the attention of the court sufficiently or at all in the skeleton arguments for the hearing. The Judge concluded that the creditors were not given sufficient information about the scheme to enable them to make an informed decision at the scheme meeting and therefore refused to sanction the scheme.
In the course of giving the Judgment, the Judge reminded practitioners of their duty to make full and frank disclosure to the Court at the convening hearing which is almost invariably heard on a ex parte basis. To properly discharge their duty, legal representatives are expected to:
provide in the skeleton arguments lodged for the convening hearing, a fair and full summary of the key terms of the restructuring and the scheme and their effect on the creditors. The summary should illustrate the changes on the financial position and the corporate and shareholding structure of the company before and after the restructuring in a way which can be readily understood by the creditors; and
draw to the attention of the Court, at the convening hearing, whether there are terms which are novel, unusual or potentially objectionable, and whether there are issues which have been or may be raised by the creditors.
Where a restructuring is conditional upon a scheme becoming effective or where the terms of the restructuring would have an impact on the return to the creditors under the scheme, the company itself should likewise, provide a full and fair summary on the key commercial terms and effect of the restructuring in the scheme document.
This case provides helpful guidance to companies and their legal representatives who are dealing with restructuring and schemes of arrangement which require sanction of the Court. As a matter of good practice, companies and practitioners in jurisdictions other than Hong Kong should also note and follow these guidelines.