Exploring Offshore Litigation Harneys

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.

In the recent decision of Justice Webster in Oscar Trustee Limited v MBS Software Solutions Limited, a non-party costs order and the permission for service of such application out of jurisdiction have been set aside on the ground that rule 7.14 of the BVI Civil Procedure Rules 2000 (now rule 7.17 of Civil Procedure Rules (Revised Edition) 2023) cannot be a free-standing gateway for service of an application out of jurisdiction.
The claimant (OTL) is a New Zealand company, who commenced the proceedings against the defendant (MBS) claiming for its return on its investment in a mining project in Turkey under a Hong Kong-law governed contract. MBS successfully sought a stay of the proceedings in favour of parallel proceedings in Hong Kong on the ground of forum non conveniens. OTL sought leave to appeal against that stay but the application was dismissed by the Court of Appeal.
Costs orders were made in favour of MBS against OTL for, inter alia, both the stay application and the leave application.
As the costs orders were not paid, MBS sought a non-party costs order against the two respondents in this application, namely a solicitor in New Zealand and an accountant in Australia, and the application, together with permission for service out thereof, was granted on an ex parte basis in November 2022. Shortly thereafter the respondents filed this application to set aside the order.
The first issue which the Court had to decide on was whether the Civil Procedure Rules 2000 (the Old Rules) or Civil Procedure Rules (Revised Edition) 2023 (the New Rules) apply to the setting aside application as the hearing date had been fixed prior to the commencement date of the New Rules (i.e. 31 July 2023) but the hearing date itself was after the New Rules took effect.
With reference to the transitional provisions of the New Rules, the Court took the view that the Old Rules should be applied.
The Court went on to consider rule 7.14 of the Old Rules, which provides that "…An application… order or notice issued, made or given in any proceedings may be served out of the jurisdiction without the court's permission if it is served in proceedings in which court process has been served out of jurisdiction pursuant to rule 7.2…".
MBS relied on the Court of Appeal's decision in Halliwel Assets Inc v Hornbeam Corporation, and contended that as long as the main claim itself qualifies for service out under CPR Part 7, an application in such proceedings can be served out of jurisdiction without leave pursuant to rule 7.14.
Justice Webster refused to follow the interpretation of rule 7.14 in the Halliwel case, noting that its interpretation was not necessary to the decision in that case and, thus being dicta, had no binding authority on another court.
Based on a plain reading of rule 7.14, he concluded the rule can only be relied upon in proceedings where prior permission to serve the claim form out of jurisdiction has been given (instead of just being qualified for), and it cannot form a free-standing gateway for service out of the non-party costs order application.
In this case, the proceedings had already been stayed before the respondents were joined as parties solely for costs purposes, and no prior permission of service out had been sought or granted for the claim form, and accordingly the service out had to be set aside.
This decision serves as guidance as to whether a claim for a non-party costs order can be served out of jurisdiction

After years of having the luxury of endless choices of takeouts, and the abundance of high-end and budget shopping, dining and bars at my doorstep, I finally decided to say goodbye to Hong Kong and moved to Harneys' Cayman Islands office in 2022. Looking back now, I cannot believe how much my life has changed.
Without all the late-night temptations, I became an early riser. The best thing about living in the Cayman Islands, other than not having to file any tax return, is to walk my dog around the North Sound Golf Club early in the morning and watch the most breathtaking sunrise.
Though not as connected as Hong Kong, Grand Cayman is just a short flight away from Miami, and there are direct flights to many major cities in the US including New York, Chicago, Houston, Dallas, Denver and Los Angeles. From there, one can easily travel to Central and South America and the rest of the world.
Since I moved to the Cayman Islands, I have ticked off many of my bucket list experiences, camping in the Grand Canyon, diving in Galapagos, surviving on the survivor island in Panama and cave diving in Bahamas. There will be more to come.
There are many community events in the Cayman Islands. Even the introverted me gets to be a part. From puppy rodeo organised by the local animal shelter to theatre performance organised by local dance studios. There is never a dull weekend.
Last but not the least, Cayman Islands is warm all year long. It is a dream for all the outdoor lovers. If you cannot find me in the office, you can spot me flying through the monkey bars at the calisthenics park or dangling on gymnastics rings in one of the cabanas at public beach.
While occasionally missing the convenience that Hong Kong offers, now I cannot see myself living anywhere else. I would highly recommend anyone considering a move to the Cayman Islands to come and experience the amazing island life.