Huawei has lost a legal bid to force HSBC to disclose documents, marking a setback in the tech giant’s efforts to prevent the extradition of its chief financial officer to the US.
Meng Wanzhou faces charges of bank fraud over claims she misled HSBC over Huawei’s dealings in Iran, causing the bank to violate US sanctions.
She has been under house arrest in Canada since her arrest in December 2018 and is now fighting an extradition case.
The legal battle was brought to London last week when Huawei took HSBC to the High Court in a bid to access documents that could help it undermine the extradition proceedings.
But judge Mr Justice Fordham today dismissed the application, ruling that the bank did not have to open its books for Huawei.
He also ordered Meng, who is the daughter of Huawei founder Ren Zhengfei, to pay HSBC £80,000 in compensation for legal fees by 5 March.
The ruling will come as a blow to Huawei’s fight against the extradition, which has become a further strain to relations between China and the West.
Trial by Power Point
The case is centred on a meeting between Meng and HSBC at a Hong Kong restaurant in August 2013.
The US claims that Meng misled HSBC about its relationship with telecoms firm Skycom, in which it owns a controlling stake.
Reuters reports in the months leading up to the meeting had raised questions about whether Hong Kong-based Skycom had breached US sanctions on Iran.
But Meng is alleged to have told bank executives in a Power Point presentation that Skycom was a business partner rather than a subsidiary, leading HSBC to accidentally fall foul of US sanctions.
Meng’s legal team have insisted HSBC were fully aware of the nature of Huawei’s relationship with Skycom and accused the US of giving Canadian authorities an incomplete copy of the presentation.
The ruling also eases pressure on HSBC, which has come under increased scrutiny in both China and the UK.
The bank, which is based in the UK but makes much of its profit in Hong Kong, was criticised in China for handing over information to the US that led to Meng’s arrest — something it was required to do by law.
But it has also come under fire in Britain over its decision to freeze the bank account of Ted Hui, prominent pro-democracy activist based in Hong Kong.