The Court reiterated that the appointment of JPLs is one of the most “intrusive remedies in the court’s armoury sometimes referred to as the nuclear option”. Such an appointment requires strong justification and the Court will take considerable care before making such a “draconian order”. In its assessment, the Court will consider the principle of proportionality and, if a lesser remedy can protect the applicant[1], JPLs should not be appointed.
[1] Such as injunctive relief (as it was in Position Mobile).
The Court’s conclusions
Before turning to the merits, Doyle J noted that the appointment was sought on an ex parte basis, without notice to Troops itself. He reiterated that the Court should be especially cautious when asked to press the “nuclear JPL button” on an ex parte basis, and that it was a very serious step to appoint JPLs without notice over a Cayman Islands company with many subsidiaries in other jurisdictions.
Whilst the Court accepted that there was a prima facie case for making a winding up order against Troops and that REFF had standing to bring the petition (as a judgment creditor), the necessity hurdle had not been satisfied. In particular, REFF argued that the alternative remedy that it had sought and obtained before the Hong Kong Court – a freezing order – was too limited in its scope, stopping short of offering full protection. Doyle J suggested that REFF could apply to the Hong Kong High Court to vary/extend the scope of the existing freezing order, and seek similar relief in other jurisdictions (if necessary). He concluded that “rather than seeking to use a sledgehammer to crack a nut, the petitioner should have gone back to the Hong Kong court for further relief following delivery of the Hong Kong Judgment.” The Court did not have sufficient comfort to “press one of the law’s nuclear weapons”, and so declined to do so.
Doyle J also noted that the “main battle” between the parties appears to be in Hong Kong, and is continuing by way of the appeal against the HK Judgment. Accordingly, the Cayman Islands Court should not make any order which on the face of it restricts Troops in pursuing its appeal.
Key takeaways
The judgment serves as a useful reminder as to the caution with which the Court will approach ex parte applications generally, particularly those seeking the appointment of JPLs over a company which is part of a large international group and which is not on notice to the application. It also serves as a useful summary as to the principles applicable to the appointment of JPLs, including the balancing factors to be considered (particularly necessity) and the relevance of any alternative remedies which might be available.
