Hong Kong Court rejects wide-ranging challenge to arbitral award

As put by Mimmie Chan J of Hong Kong, “it appears that arbitration and litigation have become a game of buying time and competing in resources”. Recourse which arbitration parties have to the supervisory Court of the arbitral seat is not:

“…intended to afford them with an opportunity to ask the Court after the event to go through the award with a fine-tooth comb, to look for defects and imperfections under the guise that the tribunal had failed to act in accordance with its remit or the agreed procedure. Nor is any party entitled to rehearse once again before the Court arguments already made before the tribunal, or have different counsel reargue its case with a different focus, in the hope that the Court may be persuaded to come to a different conclusion”.

On 27 February 2024, the Hong Kong Court of First Instance published the reasoned decision of Mimmie Chan J in CNG v G & G [2024] HKCFI 575. The Court rejected a wide-ranging challenge to a Hong Kong-seated HKIAC award brought under Article 34 of the UNCITRAL Model Law (s. 81 of the Arbitration Ordinance). The judgment outlines the principles applicable to a variety of issues, including alleged failure by a tribunal to give reasons, parties’ right to a reasonable opportunity to present its case, and alleged failure to consider issues (infra petita).

The following comments may be of particular interest:

1. As regards purported failure to give reasons/deal with issues: “A long, prolix judgment or award does not mean that it must contain sound reasoning or analysis of an issue or the decision made. A short document likewise cannot indicate that there is no good reasoning or answer to the issues raised for decision”. Moreover, agreed lists of issues are “not an exam paper with compulsory questions for the tribunal to answer them all”.

2. As regards inferences that there have been such failures, the Court reaffirmed the applicable threshold: “[a]ny inference can only be drawn if it is shown that the inference is ‘clear and virtually inescapable’”.

3. As regards procedural decisions, it is not the role of the Court to “descend to a level of reviewing the minutiae of the procedure…The Tribunal is obviously in the best position to decide on the most appropriate and fair manner of proceeding”. Further, “What the court seeks to enforce and protect is a standard of due process which can satisfy basic minimum requirements and are generally accepted as essential to a fair hearing”.

The judgment also has particular relevance for arbitration parties faced with potential waiver of procedural objections, where they fail to raise such objections or seek adjournment of the arbitration.

The ‘G Parties’ were represented by Ali Malek KC, instructed by Gibson Dunn & Crutcher. Ali was granted ad hoc admission in Hong Kong and appeared with Benjamin Yu SC and Danny Tang. Ali and Judy Fu represent the ‘G Parties’ in the underlying arbitration, which is ongoing, together with Peter de Verneuil Smith KC and Victor Steinmetz.

A copy of the judgment is available here.

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