"The Americans are doing what the British did in the 19th century," says a Hong Kong-based lawyer. "They are the imperialistic power of the late 20th and probably the 21st century."
This is the lesson top Hong Kong company Wharf has learnt in a precedent-setting case that has far-reaching consequences for non-American companies. Wharf was recently found guilty of breaking a contract with a US firm in Hong Kong. But it wasn't a Hong Kong court that passed the verdict. It was a court in Denver, Colorado - a city with no jurisdiction over Hong Kong. This fact aside, the court in Denver still insisted its verdict was binding and sought to enforce it. To howls of protest it forced Wharf to accept its verdict. In effect, it deployed a modern-day gunboat.
When Wharf refused to pay the damages the Denver court prevented the Hong Kong property conglomerate from dealing with US banks, and severed a $5.2 billion credit facility with Chase Manhattan. US banks were advised by their legal counsels to take a cautious approach to Wharf lest they face large fines for contempt of court, or worse.
In order to reopen its credit lines, Wharf posted a $173 million bond last month with the Denver court.