Between: Hangzhou Lianchuang Yongjun Kechuang Equity Investment Partnership (Ltd Partnership) Applicant/Plaintiff v Zaichang Ye Respondent/Defendant

• Jurisdiction: Cayman Islands
• Court: Grand Court (Cayman Islands)
• Judge: Justice Segal
• Judgment Date: 30 June 2025
• Docket Number: CAUSE NO. FSD 108 OF 2025 (NSJ)

Between:

Hangzhou Lianchuang Yongjun Kechuang Equity Investment Partnership (Limited Partnership)

Applicant/Plaintiff

and

Zaichang Ye

Respondent/Defendant

Neutral Citation Number: [2025] CIGC (FSD) 60

Before:

The Hon. Justice Segal

CAUSE NO. FSD 108 OF 2025 (NSJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Appearances:

Mr James Eggleton and Ms Kelsey Sabine of Harney Westwood & Riegels (Cayman) LLP for the Applicant/Plaintiff

The Applications

1 This is my judgment dealing with two applications filed on 22 April 2025 by Hangzhou Lianchuang Yongjun Kechuang Equity Investment Partnership (Limited Partnership) (the Plaintiff):

• (a). the first is an ex parte without notice application (made by a summons) (the Service Out Summons) for service out of the jurisdiction of the Writ of Summons and Statement of Claim dated 22 April 2025 (the Writ) on Mr Zaichang Ye (the Defendant), at his usual or last known address in the People's Republic of China ( PRC) (the Service Out Application).

• (b). the second is an ex parte without notice application (made by a summons) (the Freezing Injunction Summons) for a freezing injunction prohibiting the disposal of assets held by the Defendant in the Cayman Islands to the value of US$6,516,591.21 until further order of the Court, including in particular, the Class B ordinary shares owned or controlled by the Defendant in a Cayman incorporated company called SunCar Technology Group Inc. ( SDA) (that is publicly traded and listed on the Nasdaq Capital Market ( Nasdaq)) and for a further order that the Defendant must inform the Applicant's attorneys in writing of any other assets held by the Defendant in the Cayman Islands above the value of US$50,000 (the Injunction Application). The Defendant was the Chairman, Director, and Chief Executive Officer of SDA and according to SDA's Form 20-F for the year ended 31 December 2023 the Defendant owned 47,000,902 shares of the Class B ordinary shares of SDA, representing approximately 87.7% of the total shareholder voting power. The Plaintiff does not have further up to date information and proceeds on the basis that the position remains as stated in the Form 20-F for the year ended 31 December 2023.

2 I refer to the Service Out Application and the Injunction Application together as the Applications. The Applications were heard remotely on 26 June 2025. The Plaintiff was represented by Mr James Eggleton of Harneys. At the conclusion of the hearing, I told Mr Eggleton that I was prepared to grant the relief sought by the Plaintiff in the Applications subject to certain modifications to the terms of the draft orders filed by the Plaintiff and subject to giving my reasons in writing subsequently. This judgment now sets out my reasons.

3 The evidence filed in support of the Service Out Application is the Second Affirmation of Chaoyu Zhang ( Zhang 2) and the evidence in support of the Injunction Application is the First Affirmation of Chaoyu Zhang ( Zhang 1). Ms Zhang is employed as investment manager at Hangzhou Lianchuang Yongjun Equity Investment Management Co., Ltd, the executive partner of the Plaintiff.

4 The Court was asked by the Plaintiff to hear the Injunction Application on an ex parte without notice basis since the Plaintiff claimed that giving advance notice to the Defendant would risk frustrating the purpose of the relief sought (the normal procedure is for the Service Out Application to be dealt with on an ex parte basis). As I explain below, I was satisfied that it was appropriate to deal with the Applications on this basis.

The Background

5 The Applications relate to and are made following and to enforce a judgment made by the Shanghai Financial Court.

6 The Plaintiff was a party to agreements for the sale and repurchase of shares in a PRC company called Sun Car Online Insurance Agency Co., Ltd (the Target Company). The Plaintiff originally purchased pursuant to an agreement dated 8 June 2018 (the Original Purchase Agreement) 2,300,000 shares in the Target Company (the Transferred Shares) for Chinese Yuan Renminbi ( RMB) 29,900,000, which equates to US$4,515,115.82 (the Original Purchase Price). The seller/transferor was another PRC company called Zhejiang Shengling Automobile Service Co. ( ZSAS) (as Mr Eggleton explained at the hearing, ZSAS used to be called Shanghai Sun Car Services Group Co., Ltd, which is the name of the seller/transferor in the relevant transfer agreements). ZSAS at the time (and up until 30 June 2022) was a wholly owned subsidiary of a further PRC company called Shanghai Feiyou Trading Co., Ltd ( Feiyou). Feiyou was a wholly owned subsidiary of SDA (which as I have noted the Plaintiff claims is controlled by the Defendant). The Defendant was a party to the Original Purchase Agreement. He was described as the “ Transferor's Actual Controller.” He also signed the Original Purchase Agreement on behalf of ZSAS. Ms Zhang said at footnote 1 to Zhang 1 (without waiving privilege) that she understood that under section 265 of the PRC Company Law (as amended) an actual controller is a person who though not a shareholder of a company is capable of actually controlling the conduct of the company through investment relations agreements or other arrangements.

7 Shortly after the Original Purchase Agreement was entered into, the Plaintiff, ZSAS and the Defendant entered into a further agreement (the Supplemental Agreement). Once again, the Defendant was a party to the Supplemental Agreement and was described as the “ Transferor's Actual Controller” and signed the Supplemental Agreement on behalf of ZSAS.

8 Pursuant to Article 2.1 of the Supplemental Agreement ZSAS was required to repurchase the Transferred Shares from the Plaintiff (the Share Repurchase) if, prior to 30 June 2021, the Target Company failed to either: (i) make an initial public offering of stock on the Main Board, Small and Medium Enterprises Board or Growth Enterprise Market (the Designated Markets); or (ii) merge with or be acquired by a listed company (each a Repurchase Condition and, together, the Repurchase Conditions). Article 2.2 of the Supplemental Agreement provides that the repurchase price for the Transferred Shares shall be the sum of the Original Purchase Price and guaranteed investment return of 10% per annum (calculated from the date the Plaintiff paid the Original Purchase Price until the date it receives payment of the Repurchase Price from ZSAS), deducting any dividends and payouts already distributed by the Target Company to the Plaintiff (the Repurchase Price). Article 2.3 of the Supplemental Agreement requires that ZSAS pay to the Plaintiff: (i) the Repurchase Price in full within six months after it receives a written request from the Plaintiff for payment, and (ii) for any amount of the Repurchase Price not paid when due, liquidated damages at a daily rate equal to 0.05% on the amount payable for each day of delay until payment in full. Pursuant to Article 2.4 of the Supplemental Agreement, in the event that a Repurchase Condition were to be triggered and ZSAS fails to pay the Repurchase Price to the Plaintiff, the Defendant shall be held jointly and severally liable to the Plaintiff for the Repurchase Price.

9 On 26 November 2020 and 30 November 2020, the Target Company issued announcements confirming that it would not be able to make an initial public offering on the Designated Markets or merge with, or be acquired by, a listed company prior to 30 June 2021 (the Announcements). The Target Company did not make an initial public offering on the Designated Markets or merge with, or be acquired by, a listed company by 30 June 2021. The Plaintiff says that the Repurchase Conditions were deemed triggered when the Target Company issued the Announcements on 26 November 2020 and 30 November 2020.

10 On 20 April 2021, the Plaintiff commenced an action against the Defendant and ZSAS in the Shanghai Financial Court to enforce the terms of the Supplemental Agreement (the Shanghai Proceedings).

11 On 16 July 2021, the Plaintiff issued a written demand by way of a repurchase notice to ZSAS for payment of the Repurchase Price in exchange for the Transferred Shares pursuant to the terms of the Supplemental Agreement (the Repurchase Notice). Despite being issued with the Repurchase Notice, ZSAS failed to pay any amount of the Repurchase Price to the Plaintiff.

12 On 14 February 2022, the Plaintiff, the Defendant and ZSAS participated in a mediation chaired by the Shanghai Financial Court. This mediation resulted in a settlement agreement in which the parties agreed to new terms for ZSAS to satisfy its obligation to pay the Repurchase Price to the Plaintiff. The settlement terms were recorded in a judgment of the Shanghai Financial Court dated 14 February 2022, an English translation of which has been adduced in evidence (the Shanghai Financial Court Judgment).

13 The Shanghai Financial Court Judgment records that, “ During the hearing of this case, the parties voluntarily concluded the following agreement after mediation chaired by this Court…” The Shanghai Financial Court Judgment (which as can be seen from the following extract from the English translation refers to itself as a Mediation Agreement) goes on to set out the terms of that agreement as follows (my underlining):

• “1. The defendant Sun Car Services Group Co., Ltd. shall pay the share repurchase price of RMB 3,160,000 to the plaintiff Hangzhou Lianchuang Yongjun Kechuang Equity Investment Partnership (Limited Partnership) prior to February 28, 2022 to repurchase the shares of the third party Sun Car Online Insurance Agency Co., Ltd. held by the plaintiff Hangzhou Lianchuang Yongjun Kechuang Equity Investment Partnership (Limited Partnership) with a value of RMB 3,160,000 (the single share price shall be calculated as 150% of the closing price of the previous trading day). The plaintiff Hangzhou...