Factually the case is far from complex. The 23 respondents, participants in a building project at the University of Riyadh, Saudi Arabia, brought an action in the Hong Kong courts against the appellant insurance company (incorporated in Hong Kong) claiming indemnification under a contract of insurance for loss incurred in correcting structural damage. The insurer denied that the loss was insured loss but counterclaimed on the basis that, if it was liable, then the 4th to 13th respondents (a consortium “PCG”) were in breach of their duty of care towards the other respondents and that, as insurer of the project, Red Sea was entitled to be subrogated to the other respondent’s rights. Upon PCG’s application to strike out the counterclaim, the appellant further claimed to be entitled, by virtue of Saudi Arabian law, to sue PCG directly for the damage caused to the other respondents. The Privy Council3 upheld this view and reversed the decision of the Hong Kong Court of Appeal to strike out this aspect of the counterclaim.