Read the full judgment text of HCCT 70/2020 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 17 June 2021 before Hon Mimmie Chan J.
Arbitration — Share Redemption Agreement — Framework Agreement — Misrepresentation — Issue estoppel — Apparent bias — Public policy — Security for costs. The case concerns two arbitrations between parties W and AW under separate but related agreements involving shareholding disputes and allegations of misrepresentation. Award 1 (Arbitration 1) found no actionable misrepresentation, while Award 2 (Arbitration 2) found misrepresentations and rescinded the Share Redemption Agreement, with inconsistent findings on materially the same facts, by tribunals sharing a common arbitrator. The court examined settled principles of issue estoppel and held the failure of the common arbitrator to address and explain these inconsistencies or seek submissions from the parties resulted in manifest invalidity of Award 2, contrary to public policy demanding fairness and due process. The claim of apparent bias against the Presiding Arbitrator in Arbitration 2, based on nondisclosure of co-counsel history and social association with counsel for AW, was rejected under the objective fair-minded observer test. The application for security for costs against W was dismissed given the strong merits of the setting aside application, lack of Hong Kong assets, and absence of credible risk of evasion. The court ordered dismissal of the application for security and indemnity costs to W, recognizing the importance of maintaining the arbitral process’s integrity when inconsistent awards arise involving common arbitrators.
Legal issues: Issue Estoppel Ground · Apparent Bias Ground · Application for Security
Outcome: Award 2 is manifestly invalid and the application for security is dismissed.
Cited by 2 cases · Cites 2 cases