Edward Alder, instructed by Lau, Horton & Wise LLP, acted for the claimant in successfully opposing a stay to arbitration of a €6m claim on ground that the arbitration agreement was a forgery in Haller AG v Vestey Intl Group Ltd & China Meheco Corp [2022] HKCFI 652.

In 2013, the German claimant sold cargos of frozen tuna (in transit) to a Mainland Chinese corporation (D2) on 180-day bill of exchange terms (BoE). When the claimant later sought payment, D2 produced a set of ‘tripartite agreements’ under which, D2 asserted, the claimant, D2 and D2’s Hong Kong sub-buyer (D1) had all agreed D2 did not need to honour the BoEs until D1 had paid D2, which had not happened.

The claimant denied knowledge of the ‘tripartite agreements’ and said neither it nor D1 had signed them. The claimant produced evidence that (a) the sole director and shareholder of D1 as shown in the Hong Kong corporate records was a German individual who had never heard of D1, and (b) D2 had negotiated with the claimant for a prolongation of payment, which was inconsistent with its case that it need not pay.

There was no Hong Kong authority on the approach the Court should take where a claimant asserts the arbitration agreement is a forgery. The Court considered:

(i) the general Hong Kong UNCITRAL Model Law approach to stays (stay on prima facie case of arbitration agreement) (PCCW Global, [2007] 1 HKLRD 309),

(ii) the approach to alleged forgery in Singapore (also a Model Law jurisdiction) (prima facie case test still applies other than in the clearest case) (Malina Ventura [2015] SGHC 225), and

(iii) the approach to alleged forgery in England (not a Model Law jurisdiction but the 1996 Arbitration Act closely follows the Model Law) under the well-known Fiona Trust case ([2008] 1 Lloyd’s Rep 254).

The Court concluded the English approach is ultimately not very different from the Model Law approach. If the issue cannot be resolved on the evidence, a stay is granted under the inherent jurisdiction, not the Model Law provision for a stay. The prima facie approach must apply, otherwise any defendant can derail proceedings by mere assertion. The Court concluded that D2 had not even produced a prima facie case test that the tripartite agreements were genuine.

The judgment also addresses leave granted to serve D2 out of Hong Kong under gateway (c) as a ‘necessary and proper party’. The claimant had served D1 as of right in Hong Kong. The Court rejected the argument that the claimant had used D1 as a jurisdictional ‘trojan horse’ to sue D2, stating that D1 was a proper party as was D2 to the Claimant’s action. The existence of genuine proceedings in the jurisdiction against the anchor defendant ‘virtually concludes’ the forum non conveniens issue in favour of the claimant.@