Re Shandong Chenming Paper Holdings Limited [2024] HKCA 352 (Hong Kong)

The principal question arising in the case is whether or not the approach adopted in Re Guy Kwok Hung Lam [2023] HKCFA 9 (“Guy Lam CFA”) should be applied. In Guy Lam CFA, the court dismissed a bankruptcy petition on the ground that the dispute over the petition debt should be determined in the New York court in accordance with the exclusive jurisdiction agreement between the parties. On the other hand, the company in this case raised a cross-claim against the petitioner which is being arbitrated pursuant to an arbitration agreement between the parties. 

The court held that where the cross-claim is subject to an arbitration clause, as in the present case, it would be against the parties’ agreement for the court to enter into the merits and determine that there is no genuine and serious cross-claim, or one that is of substance. Such a determination would be akin to giving summary judgment in favor of the defendant and against the claimant in respect of the cross-claim. It follows that, where the parties agreed to have all the disputes under the agreement determined in another forum, the public policy in holding parties to their agreements comes into play, just as it does in a disputed debt case Guy Lam CFA.