The appellant (Shagang) and the respondent (HNA) are both based in China. In August 2008, a charterparty was concluded between Shagang and Grand China Shipping Co Ltd. HNA provided a guarantee for Grand China’s payment obligations under the charterparty dated 6 August 2008. On 9 December 2010, Shagang made a demand to HNA under the guarantee, after Grand China defaulted. HNA declined to pay. The charterparty was terminated.

The present English proceedings were issued against HNA in September 2012, when Shagang sued on the guarantee. HNA’s defences are fraudulent non-disclosure and illegality. HNA claims that a bribe of RMB 300,000 was paid by Mr Xu Wenxhong, an employee of Shagang, on instructions by Mr Shen Wenfu, then General Manager of Shagang, to Mr Xu’s college acquaintance Mr Jia Tingsheng. This was alleged to have been done with a view to Mr Jia T persuading his father, Mr Jia Hongxiang, to approve the charterparty as quickly as possible. Mr Jia H was a General Manager within HNA and CEO of Grand China.

In support of its bribery case, HNA relied on admissions made by Mr Xu, Mr Jia T and Mr Shen to officers of the Haikou Public Security Bureau (PSB) and a guilty plea by Mr Xu in the Chinese criminal courts. Shagang alleged that the confession evidence was obtained by torture and was therefore inadmissible.

On 16 May 2016, Knowles J in the Commercial Court did not find bribery by Shagang, but also stated that he could not rule out the possibility of torture but that the available evidence did not equip him well to reach a firmer conclusion. Knowles J granted judgment in favour of Shagang for US$68,641,712. The Court of Appeal allowed the appeal on 23 July 2018, admitted new evidence and remitted the case to the Commercial Court for a partial retrial to determine whether bribery had occurred on the basis that Knowles J had already found, as a matter of law, that there was no torture.

The issues are:

1. Whether the judge made a finding that torture had not been proved on the balance of probabilities.
2. The correct treatment of hearsay evidence in a civil trial where the possibility of torture cannot be ruled out.
3. Whether the Court of Appeal erred in rejecting the contention that a payment to an individual who was not an employee or agent should not give rise to an irrebuttable presumption of bribery.