Hong Kong’s High Court grants specific performance of a HK$113m Put Option obligation over a bloc of Hong Kong and Shanghai list shares. Edward Alder, instructed by Simmons & Simmons, acted for the successful plaintiff in Wan Tai Investments v Li Hiu Yan [2022] HKCFI 3702.

The Court applied the principles of contractual construction in Maeda KKKK v Bauer Hong Kong [2020] HKCA 158 and Eminent Investments (Asia Pacific) v DIO Corp (2020) 23 HKCFAR 487 to a formula for a ratio that could trigger a security top-up obligation of the Defendant. The Court accepted that it may consider the absurdity of the results of a proposed construction to guide it to the correct interpretation, Convoy Global Holdings Ltd v Kwok Hiu [2021] HKCA 1594, and that under the Defendant’s interpretation the formula rendered no ratio at all or one that applied to only part of the security. The Court found that the Defendant had failed to comply with a top-up call, triggering the Put Option right.

The Court accepted the Plaintiff’s case that damages would not be an adequate remedy where mitigation would require the Plaintiff to sell down the shares by drip-feeding them into the market over a long period at low and fluctuating rates.