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ECCA Declines To Hear Appeal Against Ex Parte Orders Prior To Return Date – Trials & Appeals & Compensation

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Last week, the Eastern Caribbean Court of Appeal (ECCA) handed
down its judgment on an attempted appeal by a BVI company, Greater
Sail Limited (“Greater Sail”), against orders made ex
parte
by the Commercial Court, prior to the return date
hearing.

In refusing to hear the appeal, the Court found that it would be
“improper to permit [the appellant] to appeal to this
Court”
prior to an inter partes hearing before
the judge below.

Background

This judgment is the latest in this long-running litigation
between Greater Sail and Nam Tai Property Inc, Nam Tai Group Ltd
and Nam Tai Investment (Shenzhen) Co Ltd (each “NTP”,
“NTG” and “NTI”, and together the “Nam Tai
Parties”).

On 4 October 2021, the Court of Appeal, in related proceedings,
ordered that a special meeting of NTP’s shareholders be
convened on 30 November 2021. The meeting was duly held and
resolutions were passed removing four directors from office and
appointing a number of new directors in their place.


Following the meeting, the new board attempted to take control of
NTP’s group of companies, including NTI and other subsidiaries
in the People’s Republic of China. The Nam Tai Parties alleged
that, since that time, Greater Sail and its affiliates had taken
steps to stymie the transfer of control of NTP and its subsidiaries
to the new board and management.

Immediately following the court-ordered meeting, Greater Sail
sent letters to market regulators in the PRC requesting that they
refuse any changes regarding the management and legal
representative of NTP. As a result, the new officers and managers
of NTP were unable to take control of the assets and affairs of
much of NTP’s group of companies including office premises,
bank accounts and corporate seals.

On 26 January 2022, the Nam Tai Parties sought urgent interim
orders that Greater Sail allow the new board to take control of the
group and its assets. The hearing was adjourned until 31 January
2022, at which time the judge ultimately granted the interim
mandatory and prohibitory orders sought.

The Judgment

The judgment helpfully clarifies the principle that an appellant
who seeks to challenge the grant of an ex parte interim
injunction must first give the judge below an opportunity to review
the position at an inter partes hearing, so as to reach a
more informed decision after considering full evidence and
submissions. The Court found that to do otherwise could seriously
undermine the due process for dealing with interim applications and
open the floodgates to leapfrogging of inter partes
hearings. It held that Greater Sail’s attempted appeal in this
instance was an abuse of process.

In any event, on the facts of this case, the Court found that,
as Greater Sail had already complied with the mandatory aspects of
the ex parte orders, the appeal would have been largely
academic and “would serve no practical purpose”.
Nevertheless, the Court determined that, were the judge below to
uphold the orders at a scheduled inter partes hearing,
Greater Sail would, at that point, be permitted to avail itself of
its right of appeal.

Comment

Helpfully, in reaching its decision, the Court of Appeal
approved and applied the English learning in Hunter &
Partners Limited v Wellings & Partners,
where the English
Court of Appeal confirmed that a defendant to an ex parte
injunction should first seek to move an inter partes
application to discharge it, and not proceed directly down an
appellate route.

This judgment serves as a stark reminder that the normal first
instance procedure for challenging ex parte injunctions
should always be adhered to, and that a failure to do so might
constitute an abuse of process.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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