CL-2022-000069 - [2025] EWHC 1512 (Comm)

The Claimants operate the “HungryPanda” food delivery business, with customers ordering via the “HungryPanda” and “PandaFresh” apps and online platform. HungryPanda was founded in 2017 and grew rapidly. By 2021, it was operating in more than 60 cities across the United Kingdom, France, Italy, the United States, Australia, New Zealand, Japan, South Korea, and Singapore.

In these proceedings, the Claimants seek to recover damages for breaches of the Asset Purchase Agreement dated 15th October 2021 (“the APA”) entered into between the Claimants as purchasers and the Defendants as sellers of the Business and Assets of the Defendants.

The Defendants’ Business represented an online take-away food order platform (“the EASI Business”) and the Defendants’ Assets represented the contracts, goodwill, IT systems, intellectual property, and the like, by which the EASI Business was carried on.

The Defendants, together with subsidiaries, joint venturers and franchisees, previously operated the EASI Business, primarily based in Australia, but with less substantial operations in New Zealand, Japan, the United Kingdom, the United States, and Canada. The Third Defendant (EASI Global Ltd), incorporated in Hong Kong, is the principal company through which the EASI Business was conducted. The Fourth Defendant (referred to as “EASI China”), incorporated in China and a wholly-owned subsidiary of the Third Defendant, was the IT centre for the EASI Business. The First and Second Defendants (Yan Liu and Jie Shen) between them held an 87% stake in the Third Defendant, in each case through a corporate vehicle they own. Mr Junquan Xu (also known as Mr Peter Liu) is the First Defendant’s husband and the Second Defendant’s business partner. The Claimants allege that Mr Peter Liu “was the directing mind and will of all corporate entities in the Sellers’ Group … including the negotiations, execution and performance of the APA”. Indeed, Mr Peter Liu has described himself as the Founder and Chief Executive Officer of the EASI Group. Mr Peter Liu’s precise role, however, does not need to be determined at this trial. However, Mr Peter Liu did act on behalf of the Defendants in respect of the events described below.

At the trial, the Claimants were represented by Mr William Edwards KC.

The Defendants did not actively participate in the trial. Further, the Defendants have not filed a Defence. Their previously instructed solicitors, DLA Piper UK LLP, came off the record by the order of Foxton, J on 21st December 2022. In fact, on 13th January 2023, Foxton, J further ordered that the Defendants be debarred from defending the Claimants’ claim by reason of their failure to comply with a previous of this Court requiring the payment of costs relating to an interlocutory application.

In Al Saud v Gibbs [2024] EWHC 123 (Comm), at para. 7-8, Calver, J explained the significance and consequence of a debarring order of this nature:

“7.

… the principles which are applicable to this application are as follows:

i)

When determining the effect of a debarring order the court should first consider the terms of the order. What does the order state the relevant party is debarred from doing? …

ii)

If an order debars a defendant from defending the proceedings (like the one here), at the trial the defendant should not be permitted to adduce evidence, cross-examine the claimant's witnesses, or make submissions in defence of the claim.

iii)

Moreover, the defendant will usually be prevented not just from advancing a positive case, but also from making any submissions that challenge the claimant’s case …

iv)

The prohibition on making submissions (and cross-examining) applies to issues of quantum just as it does to issues of liability …

v)

There appears to be a narrow, residual discretion or trial management power to permit a debarred defendant to take some part in the relevant proceedings …

vi)

The court may also have regard to the nature of the pleaded defence of the debarred defendant for the purposes of understanding the nature and extent of the relevant claim …

vii)

But in exercising this narrow power, the court should have regard to the importance of ensuring that a debarring order, which is an important sanction available to the court in the exercise of its case management powers, and an important method of ensuring that the court’s case management orders are respected, means what it says and is not undermined by permitting the defendant to escape its effect by purporting to make supposedly “clarificatory” submissions.

viii)

Of course, where a defendant is not permitted to participate in the trial, by reason of an order debarring him from defending a claim, the claimant does not automatically win by default. At the trial, the claimant must satisfy the court that he is entitled to the relief sought. In this case it remains for the Claimant to prove her claim and her entitlement to the damages sought.

8.

The debarring order is not only an important method of ensuring that the court’s case management orders are respected, but it is also of important practical effect as the facts of this case show. Allowing the Defendant in this case to have a limited form of participation at trial by defending both the merits of the claim and quantum of liability, would be unfair to the Claimant. It would allow the Defendant to participate in the trial despite his refusal to comply with court orders concerning disclosure in a case where disclosure is central to the claim …”

Having these principles in mind, the 13 January 2023 Order therefore has the effect of depriving the Defendants of any substantial participation in the trial in adducing evidence, challenging the Claimants’ evidence, and in making submissions. The important consequence of the debarring order to bear in mind is that if the proceedings had been contested with the full participation of the Defendants, it is well possible that there may have been a different result, whether the difference is in favour of the Claimants or the Defendants; equally, it is well possible that the result may have been the same. In any case, the Court’s role is the same, namely to adjudge the claims based on the evidence and arguments legitimately before it.

Shortly before the commencement of the trial, the First and Third Defendants instructed solicitors, Duan & Duan UK LLP, and by their counsel, Mr Akash Gohil, applied for relief from the sanction imposed by the order dated 13th January 2023. I dismissed that application. The result is that although the Defendants were free to attend the trial (the First and Third Defendants’ newly instructed solicitors attended during the trial), they were not permitted by reason of the order dated 13th January 2023 to defend the claim either by interrogating the evidence or making submissions.

The First and Third Defendants, or indeed any of the Defendants, did not apply for permission to participate in the trial even in the limited sphere identified by Calver, J in Al Saud v Gibbs.

The Claimants have served both factual and expert evidence. By a further order of Mr Justice Henshaw dated 22nd October 2024, the Claimants’ witnesses were not required to attend to give oral evidence unless the Defendants gave notice to the contrary by 21st February 2025. No such notice was tendered.

The Claimants served and relied on witness statements of Mr Frank McGlade, the Chief Financial Officer of HungryPanda Ltd, the parent of the Claimants, and Mr Kelu Liu, the founder and Chief Executive Officer of the HungryPanda group.

The Claimants have also served, in accordance with the Court’s order dated 22nd October 2024, an expert’s report in respect of the calculation of their losses which forms the basis of the Claimants’ claim for damages. The expert’s report was prepared by Ms Katherine Hart who is a Chartered Accountant and a Managing Director in the Disputes, Investigations and Valuations team at Quantuma Advisory Limited.

I have reviewed the written evidence of the Claimants’ factual and expert witnesses, but as they were not required to attend the trial, I have not heard their oral testimony.

As the Defendants did not appear at the trial, and I would add as they were not permitted to defend the proceedings, the Claimants are required to draw the attention of the Court to factual and legal points which have been referred to by the Defendants and points which might be to the benefit of the Defendants (Braspetro Oil Services v FPSO Construction Inc [2007] EWHC 1359 (Comm); [2007] 2 All ER (Comm) 924, para. 33, and CMOC Sales v Persons Unknown [2018] EWHC 2230 (Comm), para. 14).