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United Kingdom

Court of Appeal (England and Wales): consumer status of guarantor, 'close connection' for CRA 2015, and narrow public policy defence to enforcing Hong Kong arbitral award (Eternity Sky v Zhang)

Published on: 24 June 2024

Published by a LexisNexis Commercial expert
Legal News
Table of contents
  • Background
  • Decision
Article summary

Eternity Sky Investments Ltd v Zhang (Competition & Markets Authority intervening) [2024] EWCA Civ 630

Background

Mrs Zhang executed a personal guarantee backing a convertible bond offering by a company listed in Hong Kong, in which, at the material time, she and her husband were referred to as ‘the majority shareholder couple’. She commenced arbitration in Hong Kong seeking to set aside the guarantee but was ultimately unsuccessful, and was ordered to pay Eternity Sky HK$500m (about £64m) together with interest.

She then attempted to oppose enforcement of the award under section 103(3) of the Arbitration Act 1996, arguing that enforcement would offend public policy, on the footing that the essential provision of the guarantee infringed her rights under the Consumer Rights Act 2015 (CRA 2015).

Decision

The first-instance judge concluded that Mrs Zhang qualified as a ‘consumer’, albeit not a conventional one. At the Court of Appeal, Lord Justice Males, with whom...

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