Tongcheng Travel Holdings Limited v OOO Securities (HK) Group Limited

 [2024] HKCFI 2710, the Court of First Instance considered the interaction between setting aside default judgment and stay application for arbitration.

The Plaintiff entered into an investment management agreement (IMA) with the Defendant in 2018, by which the Plaintiff transferred US$30 million to the Defendant to invest. Under the IMA, the agreement is effective until both parties agree in writing to terminate. The IMA also contains an arbitration clause, providing for the parties’ reference of disputes to “the relevant legally authorized body in Hong Kong for arbitration”.

In 2022, the Plaintiff sought to unilaterally terminate the IMA. The Plaintiff then sued for the return of the managed assets and obtained default judgment. The Defendant applied to set aside the default judgment on the basis that there was a valid arbitration agreement.

Mimmie Chan J set aside the default judgment and made several important findings:

, instructed by Gibson, Dunn & Crutcher, for the Defendant.

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