Hong Kong Court Upholds the Finality of Delisting Decision

(A) Introduction
 
In China Ocean Industry Group Ltd v. The Stock Exchange of Hong Kong Ltd,[1] HCAL 616/2023, date of judgment: 25 July 2025, the Hong Kong Court of First Instance (the “Court”) dismissed the Applicant’s (the “Company”) application for leave to apply for judicial review to challenge the decision made by the Listing Division (the “LD”) and the Listing Review Committee (the “LRC”) concerning its delisting.
 
This decision provides important guidance on the scope of judicial review and the finality of delisting decisions under Rule 2B.16 of the Listing Rules.
 
(B) Facts
 
The Company, incorporated in Bermuda with limited liability, was listed on the Main Board of the Stock Exchange on 6 April 1995.[2]
 
Trading in the Company’s shares was suspended on 1 April 2021 due to delayed publication of its annual results for the year ended 31 December 2020.[3] The deadline for the Company to resume trading in its shares was 30 September 2022, failing which it could be delisted under Rule 6.01A of the Listing Rules. [4]
 
On 19 December 2022, the LD recommended that the Stock Exchange of Hong Kong Limited (the “Exchange”) delist the Company.[5] On 23 December 2022, the Listing Committee (the “LC”) decided to cancel the Company’s listing.[6] The Company then applied for a review of the LC Decision. On 4 April 2023, the LRC upheld the LC’s decision.[7]
 
On 17 April 2023, the Company notified the Exchange of its intention to apply for judicial review and request the Exchange to withhold delisting.[8] On 19 April 2023, the Exchange conditionally agreed to defer delisting only if the Company filed a "potentially viable" judicial review application by 26 April 2023.[9]
 
On 25 April 2023, the Company submitted a tripartite agreement involving its wholly-owned subsidiaries, Jiangxi Jiangzhou Union Shipbuilding Co Ltd, the Ruichang Municipal People’s Government and Ruichang Investment Company Limited, promising RMB 700 million funding (“New Information”) and pressed the LD/LRC to reconsider the delisting.[10]
 
On the same day, the LD, materially responded as follows (emphasis in original):[11]
 
 “As set out in our email, the Exchange voluntarily decided to temporarily refrain from             implementing the LRC’s decision based on two conditions: (i) the Company proceeds with the Leave Application promptly on or before 26 April 2023, and (ii) the Company can identify potentially viable grounds for judicial review in the Leave Application.
 
We note that the Company has not yet proceeded with the Leave Application. As the Company has not made the Leave Application, the Exchange is not yet able to assess whether the Company has identified viable grounds for a judicial review. For the avoidance of doubt, the Exchange does not consider that any of the evidence or grounds set out in the letter of 25 April 2023 present a viable ground for judicial review.
 
Both conditions for the Exchange’s voluntary decision to refrain from implementing the LRC’s decision remain unfulfilled.  The Exchange therefore reserves its right to proceed with the cancellation once it has had sight of the grounds of the Leave Application, or if the Company fails to take out the Leave Application by the 26 April 2023 deadline. Should the Exchange subsequently decide to proceed with the cancellation, the Exchange will provide you/the Company with not less than 72 hours’ notice in advance of the publication of the announcement relating to any rescheduled cancellation.”
 
The Company alleged that the above email constituted “decisions” made by both the LD and LRC to (i) refuse to reconsider the cancellation of the Company’s viability, and (ii) reconsider its decision upholding the LC’s decision to cancel the Company’s listing respectively (the “LD Decision” and the “LRC Decision”).[12]
 
Grounds for Judicial Review
 
The Company raised 4 grounds against the LD Decision and the LRC Decision:
 
(a)   Ground 1: The LD Decision was in breach of the LD’s Tameside duty, because the LD failed to consider the effect of the New Information on the Company’s ability to meet the Resumption Guidance.
 
(b)   Ground 2: The LRC Decision was in breach of the LRC’s Tameside duty for substantially similar reasons.
 
(c)   Ground 3: The LD fettered its discretion by refusing to consider new evidence – here, the New Information.  In particular, the LD has the power to consider the delisting of an issuer before the delisting actually happens.
 
(d)   Ground 4: The LRC fettered its discretion by refusing to consider the New Information for substantially similar reasons.  In particular, the LRC is not functus after taking a decision and can re-open a decision it has made provided that the listed issuer’s listing is not cancelled.
 
(C) Decisions
 
The Exchange’s Submissions
 
The Exchange submitted that the alleged LD and LRC Decisions did not exist.  As such, the Company’s intended challenge was doomed to failure from the outset. The Exchange’s arguments are summarized as follows:-[13]
 
(1)    Not every decision by a decision-maker is reviewable. “Intermediate” or procedural decisions, which do not give rise to a substantive consequence, will not be subject to the Court’s supervisory jurisdiction.

(2)    The declining of an invitation to reconsider a decision does not automatically give rise to a fresh decision which is amenable to judicial review.  It must be shown that, as a matter of substance and reality, such a fresh decision has been made.

(3)    The Court is reluctant to find that there is a fresh reviewable decision where there is reason to believe the applicant seeks to avoid some procedural or substantive requirements.

(4)    An applicant cannot bring himself within time to apply for judicial review under Order 53 rule 4 of the Rules of the High Court Cap 4A “simply by asking the decision-maker to reconsider the application, and then challenge that refusal.
 

The Court's Reasoning

The Court accepted the Exchange’s submissions and dismissed the Company’s application on the following grounds:
 
(1)   No Reviewable Decision
 
(a)   The Delisting Decision was decisive in nature, which was supported by Rule 2B.16, stating that the decision of the LRC shall be “conclusive and binding” on the listed issuer.  From that moment on, there was no further question as to whether the Company would be delisted.[14]
 
(b)   The Company’s challenge targeted the wrong act. The email sent by the Exchange dated 25 April 2023 was not reviewable. The decision which should have been challenged was the Delisting Decision.  However, that challenge had no prospects, because the Company failed to comply with the Resumption Guidance before the prescribed remedial period.[15]
 
(c)   The Company’s challenge was exactly what previous Courts have warned against, namely that applicants should not be allowed to rely on the “softer target” of a reconsideration decision and circumvent a substantive bar (namely, that the Delisting Decision disclosed no public law error). [16]
 
(d)   Permitting such challenges would undermine market certainty, contradicting Rule 6.01A, and Guidance Letter 95-18 (“Guidance Letter”) §§12 and 19, by enabling issuers to prolong delisting indefinitely via “new evidence” submissions.[17]
 
(2)   No Public Law Error
 
(a)   The Exchange was entitled to disregard the Company’s request to reconsider the Delisting Decision without exercising any discretion or carrying out any inquiry. Both Rules 2A.08 and 2B.06, which provide that (1) the LC has reserved to itself the power to cancel the listing of a listed issuer, (2) the LC’s decision (and, if the LRC is requested to review the same, the LRC’s decision) is conclusive and final. Given that only the LC / LRC has the power to cancel a listed issuer, the LD has no power to reconsider the Delisting Decision.[18]
 
(b)   The 18-month remedial period (Rule 6.01A) is not to promote the resumption of trading, but to create an effective delisting framework in light of the Exchange’s statutory objective.  Extending it via “new evidence” would contradict the Exchange’s statutory duty to maintain market certainty.
 
(c)   Neither the LD nor LRC breached any Tameside duty. They had no obligation to entertain the New Information after issuing a final Delisting Decision. 
 
(D) Key Takeaways
 
In conclusion, the above decision provides helpful guidance on the scope of judicial review. Decisions that are “intermediate” or procedural in nature, which do not give rise to a substantive consequence, are not reviewable. Rule 2B.16 of the Listing Rules states LRC decisions are “conclusive and binding”. Once issued, the only remaining question is when delisting occurs. Further, the LD and LRC had no duty to reconsider new information after the issuance of a final delisting decision.

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[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=170769&currpage=T
[2] China Ocean Industry Group Ltd v. The Stock Exchange of Hong Kong Ltd, §13
[3] Ibid, §22
[4] Ibid
[5] Ibid, §24
[6] Ibid, §32
[7] Ibid, §36
[8] Ibid, §4
[9] Ibid, §5
[10] Ibid, §38
[11] Ibid, §7
[12] Ibid, §8
[13] Ibid, §42
[14] Ibid, §43
[15] Ibid
[16] Ibid
[17] Ibid, §45
[18] Ibid, §54