 was recently invited to lead a session at the Hong Kong Common Law & Dispute Resolution Practical Training Course in Xi’an – a leading city in the “One Belt, One Road” initiative.

Co-organised by the Hong Kong International Legal Talents Training Academy and Shannxi Province Lawyers Association and bringing together 80 legal professionals from across Mainland China, the course introduced practical and operational aspects of the Hong Kong common law system and international arbitration.

During his presentation, Jonathan discussed the rules of evidence in Hong Kong and common law advocacy skills, and delivered an interactive demonstration with the audience on examination-in-chief and cross-examination of witnesses.

Special thanks to the Hong Kong International Legal Talents Training Academy for the invitation and Shannxi Province Lawyers Association for their hospitality and arrangement throughout the event.

The Court of Appeal has upheld the SFC’s power to freeze assets held by clients of licensed corporations under the Securities and Futures Ordinance (Cap. 571) (“

Chen Wencan & Anor v Secretary for Justice & Anor 

Under ss. 204(1), 205(1) and 207(e) of the SFO, the SFC has the power to prohibit a licensed corporation from disposing of or dealing with any assets held in its client’s accounts by issuing “restriction notices” if it appears to the SFC that it is “

desirable in the interest of the investing public or in the public interest

” to do so. The Applicants were investigated by the SFC on suspected ramp-and-dump schemes in respect of shares of Hong Kong-listed companies. The SFC issued restriction notices against trading accounts held by the Applicants with two securities firms, which are licensed corporations under the SFO.

The Applicants complained that the statutory regime is an unconstitutional restriction on their private property rights because it does not satisfy the “prescribed by law” requirement and disproportionately interferes with such property rights. The challenge was unsuccessful and leave for judicial review was refused at first instance. The Applicants then appealed to the Court of Appeal.

The Applicants primarily argued that the concept of “public interest” is far too wide and insufficiently certain, and the regime does not contain adequate safeguards against abuse. The Court of Appeal rejected these arguments and dismissed the appeal.

While it acknowledged that the concept of “public interest” is broad, the Court held that the statutory regime may only be invoked against licensed corporations and for the purpose of the SFC’s statutory functions, including dealing with market misconduct. Further, there were sufficient collective safeguards against any abuse of power. These safeguards included the SFC’s obligation to provide reasons, the right for any person affected to apply to the SFC to withdraw the restriction notice, and ultimately a right to apply for an independent review by the Securities and Futures Appeals Tribunal.

The Court’s judgment not only upheld the constitutionality of an important and regularly used power of the SFC, but also provides a useful overview of the mechanisms available to persons affected by restriction notices.

, leading Samantha Lau, instructed by O Tse & Co., acted for the 1

, instructed by the Department of Justice, acted for the Secretary for Justice with Leona Cheung (Principal Government Counsel).

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