China International Fund Ltd v. Dennis Lau & Ng Chun Man Architects & Engineers (HK) Ltd

HCMP 2472/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 2472 OF 2014

(ON AN INTENDED APPEAL FROM HCCT NOS. 49 OF 2013 & 9 OF 2014)

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BETWEEN

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J U D G M E N T

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Hon Lam VP (giving the Judgment of the Court):

1.On 12 August 2015, we handed down our decision for holding that the Court of Appeal does not have the power to entertain an appeal against the decision of the Court of First Instance in refusing to set aside an arbitration award when the judge refused to grant leave to appeal. This was because section 81(4) of the Arbitration Ordinance provides that such appeal could only be brought with the leave of the Court, meaning the Court of First Instance. We also held that section 81(4) is compatible with Article 82 of the Basic Law.

2.By a Notice of Motion of 9 September 2015, the Applicant applied for leave to appeal to the Court of Final Appeal in respect of our decision.  In the Motion, the Applicant formulated the following as questions of great general and pubic importance [“GPI”]:

“ 1. Whether sections 81(4) and/or 84(3) of the Arbitration Ordinance (Cap. 609)(“AO”), which provide that a challenge to an arbitration award may not be brought in the Court of Appeal unless the Court of First Instance grants leave to appeal, are a disproportionate restriction on the Court of Final Appeal’s power of final adjudication as provided under Article 82 of the Basic Law and are therefore unconstitutional.

2. In considering Question (1) above, whether the Court of Appeal has any residual jurisdiction pursuant to section 14(1) and/or sections 14(3)(ea)(iv) and (v) of the High Court Ordinance (Cap. 4) to set aside the decision of the Court of First Instance refusing leave to appeal in circumstances involving a substantial defect in the fairness of the process before that Court.”

3.The Plaintiff also relied on the “or otherwise” ground under section 22(1)(b) of the Hong Kong Court of Final Appeal Ordinance.

4.Directions were given for the Motion to be processed on paper and parties filed submissions pursuant to those directions.

5.At the substantive hearing before us, leading counsel for the Applicant did not dispute the existence of the residual jurisdiction. The only question debated before us was the juridical basis for giving rise to such jurisdiction.  In our decision of 12 August 2015, we adopted the route advocated by Lord Pannick QC, the then leading counsel for the Applicant.  We cannot understand why the Applicant should be permitted to advance a different stance in advancing Question 2 for the determination of the Court of Final Appeal.  Actually, it is not at all clear from the submissions of Mr Mok SC and Mr Ho in the present application whether they are contending that there is no residual jurisdiction and what is the basis for such contention.  If they are not so contending, and there is no other party contending that the residual jurisdiction does not exist, why should the Court of Final Appeal be troubled to give a further opinion on a point which is not contested?

6.As regards Question 1, we have given it careful consideration before we reached our decision.  With respect, Mr Mok and Mr Ho have failed to persuade us that the Applicant has a reasonably arguable case in challenging the constitutionality of section 81(4) of the Arbitration Ordinance.  Our reasons for decision speak for itself.  There is no merit in counsel’s arguments that our reference to the alternative scheme in Schedule 2 was misplaced.  It cannot be disputed that the alternative scheme is part of the overall statutory regime and it is the constitutionality (and proportionality) of that regime which was subject to examination. 

7.Nor are we persuaded that it is reasonably arguable to contend that it was wrong for us to have regard to the existence of the residual jurisdiction as part of the overall scheme of judicial scrutiny of arbitration awards in assessing the proportionality of section 81(4).  We alluded to the nature of the residual jurisdiction at paragraph 22 of our judgment and it should be quite clear from that paragraph (as well as our reference to the earlier decision in Guangdong Changhong Electric Co Ltd v Inspur Electronics (HK) Ltd [2015] 2 HKLRD 714 where the residual jurisdiction and the relevant English authorities were further discussed) that we did not conflate that residual jurisdiction with an appeal against the refusal to set aside an award (if such jurisdiction exists).

8.The submissions on less drastic options were addressed at paragraphs 46 to 55 of our judgment.  In the recent judgment of the Court of Final Appeal in Official Receiver v Zhi Charles FACV No 8 of 2015, 5 November 2015, paragraph 53, the court reiterated that the concept of “a range of reasonable alternatives” is built into the “minimal impairment” test.  The same concept was applied recently by this court in another context in Kwok Cheuk Kin v Secretary for Constitutional and Mainland Affairs CACV 57 of 2014, 22 Oct 2015.  We do not see any reasonably arguable basis for suggesting that we did not apply that test correctly in the present case.  Viewed in light of the overall statutory scheme of the Arbitration Ordinance, section 81(4) clearly comes within the range of reasonable options to achieve the legitimate aims identified in our judgment.

9.We have not had submissions on whether leave could be granted in respect of a decision by this court that it has no jurisdiction to entertain an appeal.  There can be interesting arguments in that regard and there are authorities suggesting that leave to further appeal to the Court of Final Appeal cannot be granted in this sort of situation, see HLF v MTC [2004] 3 HKLRD 241, LSW v LMYM  HCMP 1041 of 2008, 17 November 2008.  For the reasons set out above, even assuming that the court has jurisdiction to grant leave to appeal to the Court of Final Appeal (and we do not decide we have jurisdiction), we would not grant leave as we do not regard the intended appeal as reasonably arguable.  

10.We dismiss the Motion and order the Applicant to pay the costs of the Respondent on indemnity basis, such costs are to be taxed if not agreed.

Mr Johnny Mok SC and Mr Justin Ho, instructed by Anthony Siu & Co, for the applicant

Mr Benjamin Yu SC and Mr Victor Dawes SC, instructed by Herbert Smith Freehills, for the respondent

Mr Jat Sew-Tong SC and Ms Janet Ho, instructed by Department of Justice, for the intervener