After the 2008 collapse of the Bank Century, a public bank in Indonesia, the bank was taken over by the Indonesian government through Bank Indonesia and renamed Bank Mutiara. The first four defendants (D1, D2, D3 and D4) of the case were alleged to have illegally caused the collapse in order to enrich themselves and certain third persons. The Central Jakarta District Court issued three restraint orders in October 2009, and March and July 2010, ordering the restraint of the overseas bank accounts of the four defendants (some of which were located in Hong Kong) pending a final decision on the confiscation of assets.
At the request of the Indonesian government, the Secretary for Justice (“the Secretary”) of the Hong Kong Special Administrative Region (“the HKSAR”) applied to the Court of First Instance of the HKSAR for an order to restrain the bank accounts of the defendants in Hong Kong. On 15 December 2010, a restraint order was issued prohibiting the defendants from disposing of, dealing with, or diminishing the value of “any of their property in Hong Kong”.
D1 and D2 were tried in absentia in Jakarta and convicted of corruption and money laundering offences. They were ordered to pay restitution of IDR 3,115,889,000. Should they fail to pay, their assets might be seized to satisfy the order.
Additionally, the District Court of Central Jakarta issued an order to confiscate the assets and money owned or controlled by D1 to D4.
On 26 December 2012, the Indonesian Government made a supplementary request to the Secretary to enforce the above two orders as an external confiscation order pursuant to section 27 of the Mutual Legal Assistance in Criminal Matters Ordinance (Chapter 525, Laws of Hong Kong) (“the Ordinance”) and the provisions of the Agreement between the Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of the Indonesia Concerning Mutual Legal Assistance in Criminal Matters (“the Agreement”).
IndonesiaChinaIn October 2009 and March and July 2010, the Central Jakarta District Court issued three restraint orders, ordering the restraint of the overseas bank accounts of D1, D2, D3 and D4 in Hong Kong. At the request of the Indonesian Government, the Secretary applied to the Court of First Instance of the HKSAR for an order to restrain the bank accounts of the said defendants in Hong Kong. On 15 December 2010 a restraint order was made by the Court of First Instance which prohibited D1 to D18 from disposing of, dealing with, or diminishing the value of any of their property in Hong Kong, including accounts in various banks.
After D1 and D2 were tried in Indonesia, an order was made by the District Court of Central Jakarta to confiscate the assets and money owned by D1, D2, D3 and D4. On 26 December 2012, the Indonesian Government made a supplementary request to the Secretary to enforce the Indonesian confiscation order as an external confiscation order. The Secretary applied to the Court of First Instance of the HKSAR to register the order.
High Court of the Hong Kong Special Administrative Region (Court of First Instance)
On 31 January 2013, the Secretary (on behalf on the Indonesian government) applied to register the Indonesian confiscation order as an external confiscation order pursuant to section 28 of the Ordinance. In parallel,
(a) D1, D2, D11, and D12 applied to discharge the restraint order made by the Court of First Instance of the HKSAR on 15 December 2010 against the property held in their names. They also opposed the application of the Secretary to register the Indonesian external confiscation order.
(b) D3, D5 to D9 and D13 to D16 had not taken an active part in the proceedings before the Court of First Instance of the HKSAR.
(c) While not taking an active part in the proceedings before the Court of First Instance of the HKSAR, D10 also applied to discharge the restraint order made by the Court of First Instance on 15 December 2010, but would abide by the decision of the Court of First Instance to register the Indonesian external confiscation order.
(d) D4, D17 and D18 opposed the application to register the Indonesian external confiscation order only at a very late stage, hence, the Secretary applied for and was granted an adjournment of their discharge application. The restraint order against D4’s, D17’s and D18’s property in Hong Kong was ordered to be continued during the adjournment.
D1, D2 and D12 challenged the jurisdiction of the Indonesian court and, hence, the enforceability of the Indonesian confiscation order in Hong Kong. They – inter alia – mainly based their case on the fact that D1 and D2 had never been arrested or brought before any of the courts in Indonesia but were only convicted in their absence without notice of the proceedings being served on them in compliance with the Indonesian law. The Court of First Instance of the HKSAR dismissed the arguments of D1, D2 and D12 on this issue, noting that:
(a) the District Court of Central Jakarta had ruled that the relevant defendants had been validly and properly summonsed and given notice of the proceedings in accordance with the Indonesian law and that the District Court of Central Jakarta had jurisdiction to try them in absentia; and
(b) D1 and D2 were actually aware of the institution of criminal proceedings in Indonesia and had instructed their lawyers to be present and take notes thereat. The Court of First Instance of the HKSAR was thus of the view that D1 and D2 suffered no unfairness, prejudice or injustice.
Moreover, the application of United Nations Convention Against Transnational Organised Crime (“UNTOC”) was discussed in the context of the question of what ‘realisable property’ under s.5 of Schedule 2 to the Ordinance meant. The Court of First Instance of the HKSAR noted that:
(a) the Mutual Legal Assistance in Criminal Matters (Transnational Organised Crime) Order (Chapter 525X, Laws of Hong Kong) incorporating the the UNTOX; and
(b) the Mutual Legal Assistance in Criminal Matters (Corruption) Order (Chapter 525W, Laws of Hong Kong) incorporating the United Nations Convention Against Corruption,
stipulate that the requested jurisdiction should, within its domestic legal system, enforce the confiscation ordered by, or pursuant to the request of, the requesting jurisdiction.
The Mutual Legal Assistance in Criminal Matters (Indonesia) Order (Chapter 525Z, Laws of Hong Kong) incorporating the Agreement provides that the jurisdiction requested to give assistance should, to the extent of its law permits, give effect to the confiscation order made by the court of the requesting party.
The above three Orders also made provisions for the requested jurisdiction to trace and identify the proceeds of crime but it is the requesting jurisdiction which should make the order of confiscation. All these provisions served to support the conclusion that HKSAR Courts should enforce the confiscation according to the terms of the external confiscation order and not go beyond it. The conclusion of the Court of First Instance of the HKSAR was that for the enforcement of the Indonesian confiscation order, the meaning of “realisable property” shall be as defined in s 5(1)(a) of Schedule 2 to the Ordinance. The Court, therefore, found that it might only enforce the confiscation of the property specified in the Indonesian external confiscation order.
The court managed to tie most accounts to the defendants of the originating offences leading to the collapse of the Bank Century. Consequently, it allowed the Secretary’s applications to register the Indonesian external confiscation order (insofar as the property was specified in the Indonesian external confiscation order) as well as the appointment of the Receivers as enforcement Receivers to enforce the Indonesian external confiscation order and dismissed the majority of applications for the discharge of the restraint orders.
High Court of the Hong Kong Special Administrative Region (Court of First Instance)
D1, D2, and D12 applied for leave to appeal against the previous judgment. The Court of First Instance of the HKSAR was of the view that it was not necessary for D1, D2 and D12 to obtain leave to appeal, but added that even if it were required, it would be an appropriate case for leave to be granted.
High Court of the Hong Kong Special Administrative Region (Court of First Instance)
The Secretary applied to adjourn sine die its summons to register the confiscation order of the District Court of Central Jakarta in respect of the assets of D4, D17 and D18 as an external confiscation order, pending the outcome of the continuing criminal proceedings against D4 in Indonesia. The Court of First Instance of the HKSAR granted the order and noted that the restraint order regarding the bank accounts in question is to continue until further order by the Court.
The defendant, referred to as D1 in the judgments, was convicted of corruption and money laundering offences in absentia in Jakarta in 2012 and order to pay restitution. The Secretary contended that the defendant exercised effective control over bank accounts in Hong Kong.
The defendant, referred to as D2 in the judgments, was convicted of corruption and money laundering offences in absentia Jakarta in 2012 and order to pay restitution. The Secretary contended that the defendant exercised effective control over bank accounts in Hong Kong.
The defendant, referred to as D3 in the judgments, has not taken an active part in the proceedings and has not been represented in the hearings before the Court of First Instance of the HKSAR. At the time of the proceedings, he was serving a prison sentence in Indonesia in relation to the embezzlement and fraud offences that led to the collapse of the Bank Century in Indonesia. The Secretary contended that the defendant exercised effective control over bank accounts in Hong Kong.
At the time of the proceedings before the Court of First Instance of the HKSAR, the defendant, referred to as D4 in the judgments, was wanted for prosecution in Indonesia. Together with D17 and D18, the defendant opposed the application to register the Indonesian external confiscation order. The Secretary contended that D17 and D18 were holding bank accounts in Hong Kong under the effective control of D4.
The defendant, referred to as D5 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D6, D7, and D8, was holding bank accounts in Hong Kong under the effective control of D1 and/or D2.
The defendant, referred to as D6 in the judgments, was only shortly represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D5, D7, and D8, was holding bank accounts in Hong Kong under the effective control of D1 and/or D2.
The defendant, referred to as D7 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D5, D6, and D8, was holding bank accounts in Hong Kong under the effective control of D1 and/or D2. The property of D7, more specifically a bank account, was discharged from the original restraint order since it carried zero balance.
The defendant, referred to as D8 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D5, D6, and D7, was holding bank accounts in Hong Kong under the effective control of D1 and/or D2.
The defendant is referred to as D9 in the judgments.
The defendant is referred to as D10 in the judgments.
The defendant is referred to as D11 in the judgments.
The defendant is referred to as D12 in the judgments.
The defendant, referred to as D13 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D14, D15, and D16, was holding bank accounts in Hong Kong under the effective control of D3.
The defendant, referred to as D14 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D13, D15, and D16, was holding bank accounts in Hong Kong under the effective control of D3.
The defendant, referred to as D14 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D13, D15, and D16, was holding bank accounts in Hong Kong under the effective control of D3.
The defendant, referred to as D15 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D13, D14, and D16, was holding bank accounts in Hong Kong under the effective control of D3.
The defendant, referred to as D16 in the judgments, was not represented in the proceedings before the Court of First Instance of the HKSAR. The Secretary alleged that the defendant, together with D13, D14, and D15, was holding bank accounts in Hong Kong under the effective control of D3.
Together with D4 and D18, the defendant, referred to as D17, opposed the application to register the Indonesian external confiscation order. The Secretary contended that D17 as well as D18 were holding bank accounts in Hong Kong under the effective control of D4.
Together with D4 and D17, the defendant, referred to as D18, opposed the application to register the Indonesian external confiscation order. The Secretary contended that D18 as well as D17 were holding bank accounts in Hong Kong under the effective control of D4.
High Court of the Hong Kong Special Administrative Region (Court of First Instance)
