Offshore Case Notes

• Published date: 16 November 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Shareholders
• Law Firm: Forbes Hare
• Author: Mr William Hare and Sarah McLennan

The Obligations to give Full and Frank Disclosure and a Fair Presentation when presenting an Ex Parte Application: A Cautionary Tale

Bruno Wang & another v. Real Assets (RA) Global Opportunity Fund I Limited & another

A recent decision of the BVI Commercial Court highlights the importance of presenting cases fairly and with full and frank disclosure, and the consequences that may follow when these obligations are not met. Ex parte orders may be discharged and, in cases where the failures are not innocent, they may not be re-granted.

On 19 August 2022, the BVI Commercial Court (Wallbank J) dismissed an application for the continuation of an ex parte order appointing Provisional Liquidators ("PLs") over Real Assets (RA) Global Opportunity Fund I Limited ("RAGOF"), acceded to an application for the discharge of the PLs and set aside an ex parte order appointing receivers over shares in RAGOF (the receivership order having been part of a two-staged approach to replacing the management of RAGOF). Having found the breaches of the ex parte professional obligations to be "not innocent" and "very serious", the Court declined to re-grant either of the ex parte orders. A copy of the judgment is available at https://www.eccourts.org/chia-hsing-wang-v-xy-et-al/.

Background

In 2021, an alleged beneficial owner of certain shares in the RAGOF fund, Mr Chia Hsing Wang (also known as Bruno Wang), sought and obtained (stage 1) an order (on an ex parte basis) from the BVI Court appointing receivers over shares in RAGOF, then held by an alleged nominee of Mr Wang, in order that the receivers could then apply (stage 2) for provisional liquidators over RAGOF, claiming (amongst other disputed allegations) that receivership was necessary to prevent that Fund and/or its management shareholder pursuing a forced redemption of Mr Wang's shares. Mr Wang alleged that the individuals controlling RAGOF were not acting in its best interests and that the appointment of provisional liquidators was necessary for the purpose of maintaining the value of assets of RAGOF before it was placed into liquidation. He also made various allegations about Floreat, a private wealth management group which had provided certain services to Mr Wang and (indirectly) to RAGOF but which was not named as a respondent (the management shareholder which was named as a respondent was owned separately by one of Floreat's principals). Upon the ex parte application of the receivers, an order was made appointing PLs.

The two-staged approach was described by Mr Wang's leading counsel as "novel" at the ex parte hearing and was subsequently described by Mr Wang's representatives as "a novel route for...