High Court Considers Scope of Protection of Trading Interests Ordinance

In Hayward Industries Inc v Ningbo CF Electronic Tech Co Ltd [2025] HKCFI 2350; [2025] 3 HKLRD 383, the Court considered a novel question regarding the interpretation of section 7 of the Protection of Trading Interests Ordinance (Cap. 471) (“PTIO”). This was in the context of an application to discharge a Mareva injunction given that the relevant provisions of the PTIO were not drawn to the Court’s attention at the ex parte stage.

The Plaintiff was seeking to enforce a North Carolina judgment in Hong Kong for damages under two pieces of US legislation (the North Carolina Unfair Trade and Deceptive Trade Practices Act and the federal Lanham Act) as well as pre-judgment interest and legal costs. Under the North Carolinian Act, the Plaintiff’s compensatory damages of US$4.9 million were automatically tripled to US$14.7 million. The Plaintiff had obtained a Mareva injunction against the Defendants in Hong Kong to secure a portion of these sums.

The Defendants successfully argued that the Plaintiff’s failure to draw the Court’s attention to the PTIO constituted material non-disclosure, which led to the Court discharging the injunction. In considering re-grant, Deputy High Court Judge Gary CC Lam analysed whether the PTIO would afford the Defendants a complete defence. The Court held that, properly interpreted, the PTIO rendered unenforceable both the compensatory and non-compensatory elements in a composite judgment based on one cause of action. The Court cannot selectively enforce the compensatory element in such a judgment. However, where a judgment contained several awards based on different causes of action, under s.7 of the PTIO those awards would be regarded as separate judgments such that the purely compensatory awards could be enforced.

As such, there was at least a good arguable case that the Plaintiff’s award of US$4.9 million was purely compensatory in nature and still enforceable. The Court therefore re-granted the injunction.

The full judgment can be viewed here.

Tony Ko and Sean O’Reilly, instructed by MinterEllison LLP acted for the for the Defendants.