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the foreign state which created them the annulment of the act of creation by the same power will involve the dissolution and non-existence of the corporation in the eyes of English law. The will of the sovereign authority which created it can also destroy it. English law will equally recognise the one, as the other, fact".
Mr. Sheldon on this point referred to two cases In re Commercial Bank of South Australia (1886) 33 Ch.D. 174 and In re Matheson Brothers Ltd. (1884) 27 Ch.D. 225. These cases, tried while the Companies Act 1862 was still in force, decide only that the English Courts have jurisdiction to wind up a branch in England of a foreign company despite the pendency of foreign liquidation. In the latter case Kay J. says "What is the effect of the winding up order which it is said has been made in New Zealand? This Court upon principles of international comity, would no doubt have great regard to that winding up order and would be influenced thereby, but the question of jurisdiction is a different question, and the mere existence of a winding up order made by a foreign Court does not take away the right of the Courts of this country to make a winding up order here, though it would no doubt exercise an influence upon this Court in making the order"
Here we have not a dissolution as in the two cases to which Mr. Potter has referred me but an intermediate stage, an order for compulsory winding up. I do not think that that radically alters the position. The company in China is in process of dissolution, and the circumstances are such that in judgment this Court ought to make an order for the winding up of the local branch of the company.
The second and third of Mr. Potter's grounds necessarily involve a consideration of the present relations between China and Japan.
In July 1937 hostilities between these two countries broke out, and at this date are still raging. As result of these hostilities the Japanese are in effective occupation of Chefoo and the adjacent country, and of all the maritime coast of the Republic of China. The effect of Proclamations of the Imperial Japanese Government published in August and September 1957 is that it is impossible for snips under the Chinese flag to trade in Chinese waters without being subject to immediate seizure by the naval forces of Japan. The question whether in these circumstances a state of war exists between China and Japan has been raised by Mr. Sheldon on behalf of those who oppose the petition. The various affidavits filed on behalf of the parties to this action are reasonably explicit on this question. The affidavit of Jun Ke Choy filea on 29th March in support of the petition refers in paragraph 7 to "the outbreak of hostilities between China and Japan"; his later affidavit of 3rd April refers in paragraph 7 to "the blockade of Japanese naval forces exercised against all Chinese vessels"; and Mr. Matsumoto in his affidavit of 16th May in opposition to the application likewise refers in paragraph 9 to "the outbreak of hostilities between China and Japan". These considered statements on affidavit are entitled to, and must receive due weight, but fortunately for me sitting as a Court of first instance, the matter is concluded by two recent judgments. In the local case of Ford v. Steinman and others, which is unreported, the Full Court of this Colony in judgments delivered as early as December 1937 held that such a state of war existeu as to justify sailors on peacetime articles from refusing to serve on a voyage into the coastal waters of China or Japan. More recently the Court of Appeal in England have considered the same question in the
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