The Companies Act (2023 Revision) and Shiliu Investment Group Ltd Between Jia Ling Jiang Ltd Petitioner v (1) QI Xia Shan Ltd (2) ZI Jin Shan Ltd (3) WU Tong Shan Ltd Respondents

• Jurisdiction: Cayman Islands
• Court: Grand Court (Cayman Islands)
• Judge: Justice Jalil Asif
• Judgment Date: 10 January 2025
• Docket Number: CAUSE NO: FSD 2024-0090 (JAJ)

In the Matter of the Companies Act (2023 Revision)

And In the Matter of Shiliu Investment Group Limited

Between

Jia Ling Jiang Limited

Petitioner

and

(1) QI Xia Shan Limited

(2) ZI Jin Shan Limited

(3) WU Tong Shan Limited

Respondents

Neutral Citation Number: [2025] CIGC (FSD) 002

Before:

The Honourable Justice Jalil Asif KC

CAUSE NO: FSD 2024-0090 (JAJ)

IN THE GRAND COURT OF THE CAYMAN ISLANDS

FINANCIAL SERVICES DIVISION

Practice and procedure — late adjournment of trial due to unavailability of witnesses

Appearances:

Mr Ben Hobden and Ms Kelsey Sabine of Harneys for the Petitioner

Mr Tom Lowe KC instructed by Mr Denis Olarou and Mr Jason Mbakwe of Carey Olsen for the Respondents

1 This is my judgment on two summonses issued by the Petitioner and Respondents respectively on 17 December 2024 and 20 December 2024.

2 This matter is listed for a trial to commence on 10 January 2025, with a reading day, and to commence in court on 13 January 2025. It is a contested winding up petition in respect of Shiliu Investment Group Limited on the “just and equitable” basis in circumstances where the relationship between the two individuals behind the Company has broken down.

3 Shiliu Investment Group Limited is a Cayman Islands company, registered in February 2021, and is the ultimate holding company of a group of companies undertaking real estate development in the People's Republic of China (the PRC). Approximately 42% of the Company's shares are beneficially owned by Mr Chunhua Sang, who is the individual behind the Petitioner, and 58% of the Company's shares are beneficially owned by Mr Cui Wei through the Respondents. Mr Sang and Mr Cui are both physically located in the PRC.

4 The Petitioner alleges that the Company was operated as a quasi-partnership. The nature of the relationship between the individuals in question, Mr Sang and Mr Cui, is therefore likely to be the key issue at the hearing of the petition.

5 The matter was last before the court on 7 November 2024, when I made an order by consent on the papers requiring that Mr Sang and Mr Cui attend the trial of the petition in person to be cross-examined on their respective affirmations.

6 It now appears that Mr Sang and Mr Cui are not able to travel to the Cayman Islands, due to travel restrictions imposed upon them by the authorities in the PRC.

7 It also appears that Mr Sang and Mr Cui were each aware of their respective travel restrictions at the time that the Petitioner and the Respondents agreed to the court making the consent order but had not told the Cayman Islands attorneys acting for the Petitioner and the Respondents.

• a) Mr Sang appears to have believed that he would be able to resolve the issue in time for him to attend the trial and was working with PRC lawyers from about August 2024 onwards to do so. As a result, he did not inform the Petitioner's Cayman Island lawyers of the restriction.

• b) Mr Cui also appears to have been working with his personal Chinese lawyers during 2024 to remove the travel restriction affecting him and believed that the travel restriction would be lifted before the end of 2024. He also did not inform the lawyers in the PRC and in the Cayman Islands handling this matter on behalf of the Respondents that he was subject to that restriction.

8 It is against that background that the two summonses have come on for hearing before me today. Both parties seek leave that their intended witness should be permitted to give evidence by video link from Hong Kong rather than appearing in person in the Cayman Islands.

9 Secondly, the Petitioner seeks an order that the trial should proceed without the benefit of oral evidence from, and cross-examination of, any witness not able to travel to Hong Kong. On the other hand, the Respondents seek an order that the trial should be adjourned if either Mr Sang or Mr Cui is not able to travel to Hong Kong to give evidence. This would be to enable further efforts to be made to obtain permits for them to travel to the Cayman Islands or to Hong Kong, or to obtain permission from the PRC authorities to give evidence remotely from within the PRC itself under the terms of the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters.

10 The summonses have generated a large volume of evidence, little of which has been properly sworn or affirmed and filed, and the parties will be required to swear and affirm and file all material that has been put before the court.

11 The argument before me so far has focused on the question whether the trial should be adjourned, and this judgment therefore addresses that question alone.

12 I am displeased that the issue of the attendance of the witnesses has only now raised its head, less than one week before the trial is due to commence. Mr Sang and Mr Cui are both to be criticised for failing to keep the attorneys for the Petitioner and the Respondents updated during 2024, so that they, the attorneys, and the court would have had an opportunity to address this issue much earlier at the various directions hearings that took place during 2024.

13 For example, a letter of request under the Hague Convention could have been sent to the authorities in the PRC in the spring of 2024 to permit evidence to be given from within the PRC, and would probably have been determined by now. Certainly, the parties could have made more strenuous efforts to obtain permission for Mr Sang and Mr Cui to travel at an earlier stage, and with support from the court, with the likelihood that the current difficulties could have been avoided.

14 I am even more unhappy that Mr Sang and Mr Cui did not promptly inform the Petitioner's and Respondents' Cayman Islands attorneys of their difficulties in November 2024 when the Petitioner and Respondents submitted the consent order to the court requiring the personal attendance at trial of both Mr Sang and Mr Cui. The question of their availability for the trial could and should have been fully canvassed before the court at that time.

15 Very recently, within the last week, Mr Sang has been given permission to travel to Hong Kong and has obtained the necessary permit from the PRC authorities. Subject to my agreement, Mr Sang may be able to give evidence by video link from Hong Kong. The position regarding his evidence has therefore been resolved in part.

16 Mr Cui has not so far been given a permit to travel to Hong Kong. There is a faint possibility that he might still be given permission in time for the trial, which he describes as a 50% chance. But in my judgment, the court must grasp the nettle now and make a decision whether or not the trial should proceed on the assumption that Mr Cui will not be able to attend Hong Kong to be cross-examined, otherwise the matter is left in limbo, with no clear direction as to how the trial will be conducted, and with the risk of further costs being wasted.

17 The Petitioner and the Respondents both accept that it is strongly preferable that the witnesses should attend in person in the Cayman Islands to give evidence, if possible. But this is not possible for the currently listed trial, and it is unclear whether Mr Sang and Mr Cui will be able to attend the Cayman Islands at any time in the reasonably foreseeable future, although Mr Lowe dangles this possibility before me as a carrot to encourage the court to order an adjournment.

18 The Respondents' position is that there are two possibilities, each of which is unsatisfactory.

• a) First, pursuant to GCR O.38, rule 2(3), if Mr Cui does not attend to be cross-examined at the trial, then the Respondents will be barred from relying on his evidence...