[introduction of the lawyer in this case] Liu Yan, partner of Liaoning Tongfang law firm, member of Liaoning financial insurance professional committee and member of wealth management lawyers Union. Lawyer Liu Yan has been rated as an excellent young lawyer in Heping District of Shenyang and an excellent Communist Party member in the lawyer industry of Shenyang. The main business areas are legal advisory services, civil and commercial litigation and execution, especially in the field of financial litigation.
[judgment points] the plaintiff is a company registered in the Hong Kong Special Administrative Region. The legal relationship between the plaintiff and the defendant in the margin trading occurred in the Hong Kong Special Administrative Region. This case shall be tried with reference to the foreign-related civil procedure. The characterization of foreign-related civil relations shall be governed by the laws of the place of law (Chinese Mainland), which is a dispute over margin trading. The plaintiff and the defendant agreed in the margin securities client agreement that they shall be governed by the laws of the Hong Kong Special Administrative Region. Therefore, the relevant laws of the Hong Kong Special Administrative Region shall apply to the substantive review of this case. According to the laws of the Hong Kong Special Administrative Region, the principle that the party in breach of the agreement shall compensate the other party is "the losses suffered by relying on the contract", which means that the defaulter is ordered to compensate the other party for the expenses incurred by the other party due to its breach of the contract. Therefore, the court supported all the plaintiff's claims according to law.
[basic case] on February 26, 2016, the defendant LV opened an account for margin securities customers with a securities broker (Hong Kong) Co., Ltd. of the plaintiff, and the plaintiff provided stock financing services for the defendant. On February 29, 2016, the defendant LV transferred the five shares held by him in a Securities Co., Ltd. to the plaintiff for mortgage financing, and the plaintiff paid HK $33 million to a Securities Co., Ltd. on behalf of the defendant. Subsequently, the defendant LV conducted stock trading through the account for many times. On March 24, 2017, the share price of the shares held by the defendant plummeted, resulting in insufficient margin in his account. The plaintiff closed all the shares held in the defendant's account. After closing the position, the defendant still owes the plaintiff a deposit of HK $14704424.14. In addition, according to Article 7 of the margin securities client agreement, the defendant shall pay to the plaintiff the interest of all the outstanding balance at the interest rate (annual interest rate of 8.25%) mentioned in the credit accommodation letter issued by the plaintiff. The interest shall be calculated in the form of daily settlement and shall be paid on the last day of each month or at the request of the plaintiff. After closing the position, the defendant still owed the plaintiff the deposit and interest. The plaintiff repeatedly urged the defendant to repay the deposit and interest in arrears, but the defendant refused to return it. Therefore, the plaintiff told the court to order the defendant to pay the plaintiff's deposit of HK $14704424.14; Order the defendant to pay the plaintiff the deposit interest from March 1, 2017 to the date of actual settlement (temporarily calculated to December 31, 2017 as HK $1157923.99, and the interest shall be calculated according to the agreement of margin securities customers); Order the defendant to pay all expenses incurred by the plaintiff for realizing the creditor's rights (including but not limited to lawyer's fees, notarization fees, legal investigation fees, etc.); The defendant was ordered to bear all the litigation costs of the case.
[judgment result] i. the defendant LV paid the plaintiff a security broker (Hong Kong) Co., Ltd. a lump sum of HK $14704424.14 in the principal of the margin arrears within 10 days after the judgment came into effect; 2、 Within ten days after this judgment takes effect, the defendant LV paid the plaintiff a one-time interest of HK $14704424.14 on the principal of the margin arrears of a securities broker (Hong Kong) Co., Ltd. (from March 1, 2017 to the date of actual settlement, calculated at the annual interest rate of 8.25% as agreed in the margin securities Client Agreement); 3、 Within ten days after this judgment takes effect, the defendant LV paid the plaintiff a securities brokerage (Hong Kong) Co., Ltd. a one-time notarization fee of HK $22020, a lawyer's fee of RMB x million, a property preservation liability insurance fee of RMB 25355, and a translation fee of RMB 300; 4、 Reject other claims of the plaintiff's securities brokerage (Hong Kong) Co., Ltd. The case acceptance fee was 97866 yuan, and the preservation fee was 5000 yuan, which was borne by the defendant Lv.
[reason for adjudication] the plaintiff signed the margin securities account opening agreement with the customer in accordance with the requirements of the securities and Futures Ordinance of Hong Kong. The agreement was signed voluntarily by the customer and was legal and effective in accordance with the laws of Hong Kong. The principle of Hong Kong law that a party in breach of the agreement should compensate the other party is "the losses suffered by relying on the contract", that is, to order the defaulter to compensate the other party for the expenses incurred by the other party due to its breach of the agreement. Anglia Television Ltd v. reed (1972) 1qb60 case confirmed the above principle. In this case, the plaintiff conducted guaranteed financial capital business (margin trading business) to Lv LV should return the relevant margin and the corresponding interest to the plaintiff when it is due, regardless of whether the customer is profitable in the trading of stocks. However, LV did not return the deposit and interest due, which is the loss suffered by the plaintiff according to the contract. Therefore, according to laws and agreements, LV should compensate the plaintiff for the loan and corresponding interest loss. As for the notarization fees, lawyer fees, property preservation liability insurance fees and translation fees claimed by the plaintiff, the defendant shall compensate the plaintiff for the losses, expenses and expenses caused by LV, as the above-mentioned expenses are incurred by the plaintiff in the foreign-related case when he submits the evidence outside the territory and the expenses for realizing the creditor's rights of the case, and the agreement on margin securities customers stipulates the expenses.
[relevant laws] Articles 3, 8, 10 and 41 of the law of the people's Republic of China on the application of laws concerning foreign related civil relations, Article 64, paragraph 1, article 144 and article 259 of the Civil Procedure Law of the people's Republic of China, and article 551 of the interpretation of the Supreme People's Court on the application of the Civil Procedure Law of the people's Republic of China, Article 2 of several provisions of the Supreme People's Court on civil litigation evidence, securities and futures regulations, Anglia Television Ltd v. reed (1972) 1qb60 case.
[lawyer's opinion]
1. Case characterization
In accordance with Article 259 of the Civil Procedure Law of the people's Republic of China, the provisions of this part shall apply to foreign-related civil proceedings within the territory of the people's Republic of China. Where there are no provisions in this part, other relevant provisions of this Law shall apply. Article 551 of the interpretation of the Supreme People's Court on the application of the Civil Procedure Law of the people's Republic of China stipulates that the people's courts may refer to the special provisions on the application of foreign-related civil procedure when trying civil litigation cases involving Hong Kong, Macao Special Administrative Regions and Taiwan.
The plaintiff in this case is a company registered in the Hong Kong Special Administrative Region. The legal relationship between the plaintiff and the defendant in the margin trading occurred in the Hong Kong Special Administrative Region. Therefore, this case should be tried with reference to the foreign-related civil procedure. Article 8 of the law of the people's Republic of China on the application of laws concerning foreign-related civil relations stipulates that the laws of the place (Chinese Mainland) shall apply to the determination of the nature of foreign-related civil relations. Therefore, this case is a dispute over margin trading.
2. Case entrustment procedures
If a foreign-related case is brought in the mainland, if a Hong Kong enterprise handles the formalities of entrusting a mainland lawyer in Hong Kong, the Hong Kong lawyer entrusted by the Ministry of justice after assessment shall be the entrusted notary and issue the relevant notarial documents, which shall be reviewed and sealed by the China legal service (Hong Kong) Co., Ltd. established by the Ministry of justice in Hong Kong.
The materials entrusted for notarization include: relevant certification materials issued by the commercial registration authority of the place where the Hong Kong enterprise is located to prove the existence of the legal person and other organizations, resolutions or other documents of shareholders (meeting), directors (meeting), executive directors, etc. agreeing to file a lawsuit, resolutions of shareholders (meeting), directors (meeting), executive directors and partners appointing authorized representatives, agency agreement, power of attorney, indictment, Evidence materials. Since all materials submitted to the court need to be notarized by the entrusted notary and reviewed and sealed by China legal services (Hong Kong) Co., Ltd. established by the Ministry of justice in Hong Kong, the materials must be prepared in detail when handling notarization to avoid secondary notarization.
3. Application of law
Article 3 of the law of the people's Republic of China on the application of laws to foreign-related civil relations stipulates that the parties may expressly choose the law applicable to foreign-related civil relations in accordance with the law. Article 10 stipulates that foreign laws applicable to foreign-related civil relations shall be ascertained by the people's courts, arbitration institutions or administrative organs. If the parties choose to apply the laws of a foreign country, they shall provide the laws of that country. Where it is impossible to ascertain the laws of a foreign country or there are no provisions in the laws of that country, the laws of the people's Republic of China shall apply. Article 41 provides that the parties may choose the law applicable to the contract by agreement. If the parties have no choice, the law of the habitual residence of the party whose performance of the obligations best reflects the characteristics of the contract or other laws that have the closest connection with the contract shall apply.
In this case, both parties agreed in the margin securities client agreement that this Agreement shall be governed by the laws of the Hong Kong Special Administrative Region and shall be implemented in accordance with the laws of the Hong Kong Special Administrative Region of the people's Republic of China. Therefore, the substantive review of this case is applicable to the laws of the Hong Kong Special Administrative Region. The Hong Kong Special Administrative Region belongs to the common law system, and Hong Kong lawyers can be entrusted to assist in the legal investigation. The basis for the judgment of this case includes the written law securities and Futures Ordinance and the case Anglia Television Ltd v. reed (1972) 1qb60.