Read the full judgment text of HCCT 38/2021 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 29 December 2023 before Hon Mimmie Chan J in Chambers.
Construction and Arbitration Proceedings — Enforcement and setting aside of arbitral awards — Illegality defence — Public policy — Application of Article 34 of the Model Law — Arbitrator applied Tinsley test; Court recognizes current Hong Kong law as applying Patel multi-factorial approach to illegality per Monat — Whether Court can review arbitrator’s public policy decision and set aside awards — Held: Court entitled to consider conflict with current public policy and remit for reconsideration — Scope of arbitrator’s jurisdiction and authority under Clause 6.10(e) SPA limitation on damages — Distinction between jurisdiction and admissibility — Challenge not raised timely, no jurisdictional defect — Application to set aside on clause 6.10(e) ground dismissed. Facts: BVI courts set aside share placement made for improper purpose under section 121 BVI Act; arbitration under Hong Kong law clause commenced by G for restitution of consideration monies; arbitrator denied relief applying Tinsley test, quantified damages against G. Court suspends setting aside proceedings, remits to arbitrator to apply current public policy approach and consider if award should grant relief to G. Interim preservation order continued to protect funds. Costs awarded as to 20% on indemnity basis in favor of N. The case provides important guidance on interplay between illegality doctrines in arbitration and supervisory role of Hong Kong courts in setting aside awards under public policy exceptions.
Legal issues: Application of public policy in setting aside arbitral awards on illegality grounds · Scope and authority of arbitrator under Clause 6.10(e) of SPA regarding damages
Outcome: Proceedings to set aside awards are suspended under Article 34(4) for 3 months and matter remitted to arbitrator to reconsider awards in light of current public policy guidelines. Application to set aside on Clause 6.10(e) ground dismissed. Interim preservation order (IPO) continued pending resumption of arbitration.
Cites 3 cases