In First Laser Limited v Fujian Enterprises (Holdings) Company Ltd and anor [2023] HKCFA 39, the Appeal Committee of the CFA clarified that when an appellate court remits an issue for trial, the scope of the remitter must depend on the terms of the order, understood in the context of the judgment giving rise to the remitter.

In 1996, the first defendant (“FEHC”) agreed to sell 51% of its shares in its subsidiaries to the plaintiff (“FL”) as part of a joint venture in Macau (“FLA”). After FL’s and FEHC’s relationship deteriorated, the latter sold the shares of its subsidiary (“FCL”) to JDS Uniphase China Holding Company (“JDS”). In an earlier appeal to the CFA ((2012) 15 HKCFAR 569), the CFA held the FLA was invalid under Mainland Law, which gave rise to restitution.

The CFA remitted the issue of restitution to the CFI for determination in accordance with Mainland law (the “Remitter”).

In the trial of the Remitter, DHCJ To allowed FL to introduce, with new evidence, a restitutionary claim based on a “nominee investment contract” (“NIC”), rather than the FLA. The CA allowed FEHC’s appeal, because a finding of an NIC was neither consistent with the CFA’s review of the evidence, nor supported by new evidence.

FL sought leave to appeal, submitting that the proper scope of a remitter constituted a question of great general and public importance. Ribeiro PJ, writing for the Appeal Committee, disagreed and refused leave. His Lordship held that:

• The scope of any remitter depends on the construction of the order to remit. It depends on the language of the order, the circumstances in which it was made, and the reasons for making it.
• Trial judges had no jurisdiction to expand their own decision or try any other issue when dealing with remitters.
• The Remitter was ordered to determine the issue of restitution consequent upon the invalidity of the FLA. It did not involve determining whether a separate NIC came into existence, its potential invalidity, and attendant consequences.

The full judgment can be viewed here.