Read the full judgment text of HCCT 38/2021, HCCT 28/2023, HCCT 52/2023 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.
Arbitration — Illegality defense — Application of public policy — Model Law Article 34 — Setting aside awards — Scope of court review — Hong Kong law adopts Patel v Mirza approach over Tinsley v Milligan for illegality — Court entitled to review consequences of illegality for conflict with current public policy without revisiting arbitrator's findings of fact or law — Remission to arbitrator to apply correct approach warranted. Arbitration clause imposes limitation on damages recoverable — Whether limitation clause restricts arbitrator's jurisdiction or substantive admissibility — Court holds it limits admissibility and no timely jurisdiction challenge raised — No ground to set aside on that basis. Facts: G and N parties to SPA and arbitration after BVI court held share placement invalid for improper purpose breaching BVI statute. Arbitrator applied outdated illegality test denying relief to G and awarding damages to N. Court suspends setting aside proceedings pending arbitrator’s reconsideration applying current legal test evidenced by Hong Kong Court of Appeal decision Monat. Interim preservation order freezing disputed funds continues to safeguard possible award. Costs ordered on indemnity basis for part of proceedings attributable to jurisdictional challenge. This case clarifies Hong Kong’s public policy position on illegality in arbitration enforcement, scope of court's supervisory jurisdiction under Model Law, and limits of jurisdictional challenges relating to arbitration awards.
Legal issues: Application of public policy in setting aside arbitral awards on illegality grounds · Jurisdictional challenge based on Clause 6.10(e) of SPA limiting arbitrator’s power to award consequential damages
Outcome: Setting aside proceedings suspended and matter remitted to arbitrator under Article 34(4); G’s application to set aside on Clause 6.10(e) ground dismissed; continuation of interim preservation order granted.
Cited by 2 cases · Cites 2 cases