Leed Education Holding Limited, National Education Holding Limited, Hyde Education Holding Limited V Minsheng Vocational Education Company Limited - Grand Court of the Cayman Islands Cause No FSD 130 of 2023 NSJ - 3 August 2023
Country
Year
2023
Summary
In the Matter of the Application for Interim Relief Under Section 11A of the Grand Court Act (2015 Revision) and Section 54 of the Arbtiration Act, 2012.
I have before me an originating summons (the Originating Summons) filed on 19 May 2023 by the Plaintiffs in which they apply for an interim injunction (the Interim Injunction) pursuant to section 11A of the Grand Court Act (2015 Revision) (Section 11A) and to section 54 of the Arbitration Act 2012 (Section 54). The Plaintiffs seek to prevent the Defendant (also referred to as Minsheng), a company incorporated in the Cayman Islands, from taking any steps to enforce a series of share charges (the Charges) granted to Minsheng by the Plaintiffs over 49% of the issued share capital of Leed International Education Group Inc. (the Company), a company also incorporated in the Cayman Islands, pending the determination of two arbitrations commenced at the Hong Kong International Arbitration Centre (the Hong Kong Arbitration) in Hong Kong and at the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing, the People's Republic of China (the PRC Arbitration, together with the Hong Kong Arbitration, the Arbitrations).
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The exercise of the Court's discretion
131. In these circumstances, it seems to me to be appropriate that the Plaintiffs be granted an injunction restraining Minsheng from taking any steps to enforce the Charges including by exercising a power of sale until the conclusion of the PRC Arbitration or in the event that the CIETAC arbitral tribunal refuses the Plaintiffs permission to continue the injunction (provided that the Plaintiffs file further evidence confirming that their claim that interim remedies were not available following the filing of the PRC Request for Arbitration in, or in relation to, the PRC Arbitration).
132. It seems to me that the Court is required, having regard to the specific principles of international arbitration relied on and established in the case before it, to consider the balance of convenience, to balance the risk of prejudice to the parties and to consider whether the relief is consistent and in accord with those principles.
133. I am satisfied that the risk of grave and irreparable harm to the Plaintiffs from refusing to grant the injunction outweighs the risk of prejudice to Minsheng in granting the injunction. I agree with the Plaintiffs that Minsheng has not established that it will suffer material or substantial prejudice if the injunction is granted although I do give weight to and take into account the prejudice suffered by Minsheng as chargee in being prevented from exercising its enforcement rights and remedies in that capacity. In my view, there need to be substantial grounds justifying the interference with a chargee's remedies but in this case there are. The injunction will not prejudice or affect Minsheng's proprietary rights as chargee which will be preserved and remain unaffected.
It may suffer some prejudice by being unable to sell the Second Trance to a third party now (with or without the First Tranche) but the extent of such prejudice has not been established by the evidence and in any event is outweighed by the need to protect the Plaintiffs' rights under the Loan Agreements (and the SPA), by which Minsheng has agreed to be bound.
134. Furthermore, the form of injunction I propose to make ensures that the applicable principles of international arbitration, and that the primacy of the relevant arbitration, are respected with there being only a minimal effect on the PRC Arbitration (and without this Court making any findings or taking any decisions which are for the CIETAC arbitral tribunal).