P v. D

HCCT 31/2023

[2024] HKCFI 1132

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 31 OF 2023

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J U D G M E N T

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1.Introduction

1.1By an Amended Originating Summons dated 1 August 2023, the Plaintiff (“P”) applies for an order removing XXX[1] (“MC”) and XXX [2] (“YZ”), the current arbitrators (“Impugned Arbitrators”) in XXX XXX XXX XXX XXX (“Arbitral Proceedings”), pursuant to section 26 of the Arbitration Ordinance Cap 609 (“Ordinance”).

1.2At the hearing, P was represented by Mr David Fong of counsel.

1.3The Amended Originating Summons and relevant documents were served on the Defendant (“D”), MC and YZ. No Acknowledgement of Service has been filed by D and the Impugned Arbitrators have not sought to intervene or participate in these proceedings.

1.4The present application is preceded by an earlier unsuccessful challenge (“Earlier Challenge”) against the Arbitral Tribunal (consisting of the Impugned Arbitrators and another arbitrator, XXX XXX XXX (“DL”)[3]). The Earlier Challenge was initiated by P’s email dated 18 August 2022, which constituted its Notice of Challenge under the applicable rules and practice note (“Notice of Challenge”).

1.5Following the issuance of the Notice of Challenge, on 12 October 2022, DL decided to resign from his appointment, not because he agreed with the Notice of Challenge but on the basis that he wished to avoid further disputes on the matter. Despite DL’s resignation, P persisted with the Earlier Challenge against him.

1.6The Earlier Challenge was processed under the applicable rules and practice note and was opposed by D and the Impugned Arbitrators. Eventually, the Earlier Challenge was dismissed by the Proceedings Committee of HKIAC on 4 May 2023, following the issuance of a Recommendation of Challenges dated 2 May 2023 (“Recommendation”)[4] by the appointed panel[5] (“Panel”), on the basis that the grounds relied on by P did not give rise to justifiable doubts as to the impartiality or independence of the Arbitral Tribunal (including that of DL).

1.7Mr Fong maintains that the Impugned Arbitrators should be removed on the basis of apparent bias. The grounds formulated by Mr Fong, however, went beyond those pursued in the Earlier Challenge (“Additional Grounds”). Upon my requisitions, supplemental written submissions were lodged by Mr Fong prior to the hearing to justify why P should be permitted to rely on the Additional Grounds in the present application. I will address the foregoing in the section below dealing with the applicable principles. For the reasons set out therein, I am of the view that, in the circumstances of the present case, P is not entitled to rely on the Additional Grounds, especially when they advance a number of serious allegations which were not addressed by D and the Impugned Arbitrators and not dealt with by the Panel.

2.Chronology of relevant events

2.1The relevant events are set out in the Recommendation and a chronology provided by P. The following recap is taken largely from those documents, with my supplements.

2.2D is a company incorporated under the laws of Hong Kong and P is a company incorporated under the laws of Taiwan.

2.3The disputes between the parties arose out of an Annual Sales Contract (Contract No.: XXX XXX XXX) entered into between D as the seller and P as the buyer on 15 September 2017 ("Contract").

2.4Clause 10.1 of the Contract contains an arbitration agreement which provides:

“ Any disputes arising from or in connection with this contract shall be settled through friendly negotiations. In case no settlement can be reached, the dispute shall be submitted to Hong Kong International Arbitration Center for arbitration in accordance with the rules in effect at the time of applying for arbitration. This contract shall be governed by the Laws of UNCITRAL Arbitration Rules.”

2.5On 15 November 2018, D commenced proceedings against P (“Arbitral Proceedings”) by a Notice of Arbitration ("NOA") under the UNCITRAL Arbitration Rules (with new article 1, paragraph 4, as adopted in 2013) ("UNCITRAL Rules") and the 2015 HKIAC Procedures for the Administration of Arbitration under the UNCITRAL Arbitration Rules ("HKIAC Procedures"). In the NOA, D claims that P is in breach of its payment obligation and seeks payment of US$3,487,631.99, comprising of the price of goods delivered (US$3,253,454.02) and a sum for “penal bond” pursuant to clause 2.3 of the Contract (quantified at US$234,177.97 as at 31 December 2018).

2.6On 19 December 2018, P filed its Answer to the NOA, submitting, inter alia, that the Contract was vitiated by fraud (“Fraud Defence”). On a very high level of generality, it is P’s case that the Contract was part of a fraudulent scheme orchestrated by a Taiwanese, XXX XXX XXX XXX, with the involvement of a host of entities including XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX.

2.7The Arbitral Tribunal, consisting of the Impugned Arbitrators and DL, was constituted on 16 October 2019.

2.8The Arbitral Tribunal fixed a preliminary meeting with the parties on 16 June 2020. On 12 June 2020, P’s solicitors (1) requested the Arbitral Tribunal to first deal with P’s jurisdictional challenge (“Jurisdictional Challenge”) and (2) applied for approval from the Arbitral Tribunal for it to request assistance in taking evidence from courts in Hong Kong, Taiwan, United States, the Mainland, and Malaysia pursuant to section 55(1) of the Ordinance (“2020 Application”). It was said that the underlying basis for the 2020 Application was to obtain evidence to substantiate the Fraud Defence.

2.9On 16 June 2020, the Arbitral Tribunal circulated draft Procedural Order No 1 (“PO No 1”). Thereafter, on 10 July 2020, the Arbitral Tribunal issued the final version of PO No 1 and gave its decision on the Jurisdictional Challenge and the 2020 Application (“2020 Decision”):

(1)  In respect of the Jurisdictional Challenge, the Arbitral Tribunal referred to Articles 17(1) and 23(3) of the UNCITRAL Rules and decided to rule on it in the award on merits instead of as a preliminary question, as the Fraud Defence cut across both the Jurisdictional Challenge and the underlying merits. In doing so, at 2020 Decision §5(3), the Arbitral Tribunal specifically pointed out that the decided course would not have the effect of preventing P from presenting its case on the Fraud Defence.

(2)  As regards the 2020 Application, the Arbitral Tribunal declined to accede to the application as it was premature. In doing so, the Arbitral Tribunal pointed out that it was not preventing P from seeking approval for P’s request for assistance in taking evidence, but as the pleadings were then yet to be filed, the issues in dispute had not been crystallized. The Arbitral Tribunal observed at 2020 Decision §6 that, in an application made pursuant to section 55 of the Ordinance, the Arbitral Tribunal should guard against oppression and fishing expedition[6], the evaluation of which was then not possible. P was directed to make the application again after the filing of pleadings. It was further pointed out that section 55 of the Ordinance only applied to the Hong Kong Court and the Arbitral Tribunal did not have power to make decisions affecting courts elsewhere.

2.10PO No1 included a Provisional Timetable which made provisions for the filing of pleadings, followed by the timing for the parties to make requests for production of documents. PO No 1 §§22-23 also provided that (1) all interlocutory applications should be made in writing and the applicant was required to set out in full the relevant legal principles and relevant factual matters and (2) the Arbitral Tribunal would then decide on the procedures to be adopted to the applications made[7].

2.11Pleadings (accompanied by evidence) were filed between 25 September 2020 and 8 March 2021.

2.12In the meantime, P made a request on 23 February 2021 for YZ’s recusal, on the basis that YZ was an arbitrator in another case involving D (also as claimant). By an email dated 16 March 2021, YZ refused to do so. YZ pointed out that under the IBA Guidelines on Conflict of Interest 2014, there was no obligation for him to make any disclosure under the prevailing circumstances, and in any event, whilst both arbitrations involved D (as claimant), they were concerned with entirely different transactions and different respondents. The other arbitration had concluded, and an award was made in default of the respondent defending the claim. On the material before me, P did not persist with its request for YZ’s recusal.

2.13The parties thereafter discussed the arrangements for the substantive hearing. D invited the Arbitral Tribunal to proceed on “documents only” basis or to direct the substantive hearing to be conducted remotely. P insisted on an oral hearing.

2.14By an email dated 17 May 2021, the Arbitral Tribunal referred to Article 17(3) of the UNCITRAL Rules and observed that, as P had requested for an oral hearing, it did not have a discretion to order otherwise but agreed with D that the substantive hearing could be conducted remotely. In that email, the Arbitral Tribunal further stated that, consistent with PO No 1 §§22-23, any interlocutory applications should be made in writing within 14 days, failing which a substantive hearing would be directed and the case would be adjudicated on the materials then submitted.

2.15On 30 May 2021, P applied to the Arbitral Tribunal (1) for production of documents from D and (2) to request the Hong Kong Court for assistance in taking evidence (“Section 55 Application”) from 3 parties, namely XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX

2.16Pausing here, it is worth emphasizing that under section 55 of the Ordinance, a request to the Hong Kong Court for assistance in taking evidence may be made either by an arbitral tribunal or a party with the approval of the arbitral tribunal. P’s Section 55 Application is premised on the request being made by the Arbitral Tribunal.

2.17Returning to the chronology, on the following day, D also applied to the Arbitral Tribunal for production of documents from P. D additionally pointed out that whilst it had paid HK$600,000 as deposit for the fees of the Arbitral Tribunal, P had not done so. D submitted that the Arbitral Tribunal should request P to pay its share of the deposit.

2.18In its email dated 4 June 2021, the Arbitral Tribunal dealt with the Section 55 Application. After referring to Section 55 of the Ordinance[8], the Arbitral Tribunal indicated that it would not object to P applying to the Hong Kong Court for assistance in taking evidence, but such request should not be made by the Arbitral Tribunal, in particular when P had not paid any deposits for the Arbitral Tribunal’s fees. It was further directed that P should indicate whether it would in fact make a request on its own, and if so, P should submit a timetable within 14 days.

2.19In the 4 June 2021 email, the Arbitral Tribunal also dealt with other matters, including (1) the cross applications for production of documents for which directions were made to deal with them by way of Redfern Schedules and (2) D’s request that P do pay its share of the deposit for the Arbitral Tribunal’s fees, to which the Arbitral Tribunal stated that the matter had already been dealt with in Procedural Order No 2.

2.20Between 11 June and 14 July 2021, the parties exchanged their requests for document production in the form of Redfern Schedules. During this period, P persisted with the Section 55 Application, on 18 June and 14 July 2021 respectively:

(1)  I note that the scope of the Section 55 Application described in P’s email of 18 June 2021 had expanded from that stated on 30 May 2021 (§2.15 above), for example it was suggested the Inland Revenue Department was to be included;

(2)  In P’s email to the Arbitral Tribunal dated 14 July 2021, it insisted upon the Section 55 Application (ie the request should be made by the Arbitral Tribunal) on the basis that it was a right conferred by the Ordinance, but indicated that it was prepared to pay for the costs for the Arbitral Tribunal to make the request.

2.21On 13 August 2021, the Arbitral Tribunal issued Procedural Order No 3 (“PO No 3”) which dealt with the parties’ applications for document production and (again) the Section 55 Application. In respect of document production, the parties were to produce the documents which were ordered to the produced by the Arbitral Tribunal to the other party within 14 days. The Arbitral Tribunal also dismissed the Section 55 Application for, inter alia, the following reasons:

(1)  First, the Arbitral Tribunal stated that it had already made a decision on the Section 55 Application on 4 June 2021 (§2.18 above) and there was no material change in circumstances for the matter to be revisited. P had misunderstood the effect of section 55 of the Ordinance, in that there was no absolute right conferred on P to ask the Arbitral Tribunal to make a request to the Hong Kong Court. The discretion whether to do so remained with the Arbitral Tribunal and a relevant factor was whether P had paid its share of the deposit for the Arbitral Tribunal’s fees (which it did not);

(2)  The Arbitral Tribunal was of the view that P’s failure to pay its share of the deposit was a breach of the agreement to arbitrate (“Alleged Prejudgment”) and it was entitled to take that into account in the exercise of its discretion whether it should make a request to the Hong Kong Court for assistance in taking evidence;

(3)  Secondly, the Arbitral Tribunal pointed out that there were very few cases where a request under section 55 of the Ordinance was made by an arbitral tribunal but there were many instances where the request was made by a party with the approval with an arbitral tribunal. The Arbitral Tribunal observed that P did not articulate any reasons why it could not or would not itself make the request (no doubt after obtaining approval from the Arbitral Tribunal);

(4)  Thirdly, as a matter of practicality, it would not be cost-effective for the Arbitral Tribunal to instruct solicitors to make the request;

(5)  Fourthly, P did not provide any evidence on whether it had contacted any of the parties from whom evidence was sought and the difficulties encountered by it.

The Arbitral Tribunal made an order that the costs of the Section 55 Application should be borne by P and further directed that P should within 7 days indicate whether it was itself to make a request.

2.22Pausing here, I should point out that the Alleged Prejudgment is one of the Additional Grounds relied on by Mr Fong. It was said by Mr Fong that in observing that P was in breach of the agreement to arbitrate, the Arbitral Tribunal had prejudged the Fraud Defence and regarded P as deploying “guerrilla tactic” by not paying its share of the deposit for the Arbitral Tribunal’s fees. Indeed, the Alleged Prejudgment was presented as P’s “case theory”, in that the Arbitral Tribunal was subconsciously biased against P.

2.23Returning to the chronology, on 20 August 2021, P applied to the Arbitral Tribunal for approval under section 55 of the Ordinance to make a request to the Hong Kong Court for assistance in taking evidence from XXX XXX XXX XXX XXX (“2021 Application”). It is noted that in respect of XXX XXX, a main area for which evidence was sought was XXX XXX XXX bank statements.

2.24On 26 August 2021, the Arbitral Tribunal approved the 2021 Application, confined to the scope set out in P’s email of 20 August 2021, and directed P to (1) submit its application for evidence taking to the Hong Kong Court within 7 days and (2) report the status of the court proceedings to the Arbitral Tribunal every 14 days. It was further directed that the production of documents otherwise ordered in PO No 3 would not thereby be affected.

2.25On 27 August 2021, D applied for an extension of time to produce documents (in respect of one class of the documents ordered to be produced). The other classes were produced by D.

2.26On 1 September 2021, P applied to the Arbitral Tribunal for an extension of time to 29 September 2021 for P to submit its applications for evidence taking to the Hong Kong Court. P indicated that in connection with the evidence to be obtained, if it was necessary to make an application to the Mainland Court for assistance in taking evidence, it would need to engage lawyers and could not therefore provide an estimate of the time needed. Further, P applied to the Arbitral Tribunal for approval of its revision to the scope of evidence that P would request from the Hong Kong Court (“Application for Revision”). By email dated 2 September 2021, D objected to P's applications.

2.27By its email dated 9 September 2021, the Arbitral Tribunal (1) agreed to D’s application for extension of time (for 14 days) for its document production and directed D to provide explanation should it fail to comply with the extended deadline and (2) granted an extension of time to 23 September 2021 for P to make the court applications but dismissed the Application for Revision given “the serious delay” and on the basis that “the Application for Revision was not reasoned”. As regards P’s indication of a possible application to the Mainland Court, the Arbitral Tribunal noted that applications to the Mainland Court for assistance in taking evidence did not require the Arbitral Tribunal's approval, and P was free to decide whether it would make such an application. However, the Arbitral Tribunal would proceed with the substantive hearing without waiting for the conclusion of any such possible Mainland proceedings. If any new evidence was obtained from the Mainland, P would have to apply to the Arbitral Tribunal for permission to submit such evidence for good cause, and the Arbitral Tribunal reserved its right to not accept such evidence, particularly if it was submitted too late.

2.28On 10 September 2021, P applied to the Arbitral Tribunal to reconsider a 28-day extension and pointed out that D was unfairly granted an extension of time to produce documents.

2.29On 16 September 2021, the Arbitral Tribunal rejected P’s application, pointing out that P had had 4 months to make the court applications but elected not to do so. Conversely, the Arbitral Tribunal was of the view that the extension of time granted to D was against the background that P’s court applications had the effect of delaying the substantive hearing and as a result no prejudice could have been caused.

2.30On 17 September 2021, P sought an explanation from the Arbitral Tribunal on how it concluded that P had had more than 4 months to make the court application but failed to act.

2.31On 20 September 2021, the Arbitral Tribunal stated that it did not intend to continue to waste all parties’ time on the topic and reiterated the reasons set out in its email dated 9 September 2021[9]. The Arbitral Tribunal stated that further applications for an extension of time for P to make the court applications would not be entertained unless there existed special circumstances.

2.32On 21 September 2021, P provided to the Arbitral Tribunal the reasons in support of its Application for Revision. It was stated that the 2021 Application contained errors and was incomplete.

2.33On 23 September 2021, P informed the Arbitral Tribunal that it had applied to the Hong Kong Court for assistance in taking evidence from XXX XXX XXX XXX XXX, as per the Arbitral Tribunal's order dated 9 September 2021 (“Court Applications”). Unbeknownst then to the Arbitral Tribunal, the Court Applications were defective as they exceeded the scope of the approval granted on 26 August 2021.

2.34On 24 September 2021, D applied to the Arbitral Tribunal for a further extension of one or two months for its document production on the grounds that it had difficulties in producing email correspondence due to the cancellation of the email account in question and it required time to find means to restore the email account. On 27 September 2021, P objected to the D's application and requested the Arbitral Tribunal to make a peremptory order against the D.

2.35On 21 October 2021, in the course of reporting on the progress of the Court Applications to the Arbitral Tribunal, P submitted that the Arbitral Tribunal should treat the parties with equality. P had complied with the Arbitral Tribunal's order in submitting the Court Applications and had been making regular reports on the progress to the Arbitral Tribunal, but D had been in breach of the Arbitral Tribunal's order by failing to produce the documents ordered for production. P submitted that the Arbitral Tribunal should not allow this. P further submitted that D’s failure to produce documents, coupled with certain evidence in the case, showed that the case was about commercial fraud and was therefore outside the jurisdiction of the Arbitral Tribunal.

2.36On 4 November 2021, P wrote to the Arbitral Tribunal pointing out that D still had not produced the documents as ordered and the Arbitral Tribunal had not dealt with the D’s request for time extension made on 24 September 2021. P pointed out that it had previously requested the Arbitral Tribunal to issue a peremptory order requiring D to produce the documents on time, but no response was given. P invited the Arbitral Tribunal to address these issues, to conclude that the relevant transactions were not genuine, and to direct D to withdraw its claim.

2.37On 9 November 2021, the Hong Kong Court heard the Court Application against XXX. P reported to the Arbitral Tribunal that, since the scope of assistance sought under P’s Court Applications was different from that approved by the Arbitral Tribunal, the Court directed P to make an immediate application to the Arbitral Tribunal for approval of the revised scope and to further deal with the Court Applications after the Arbitral Tribunal gave its views on the matter. P therefore requested the Arbitral Tribunal to reply to P’s reasons in support of its Application for Revision given on 21 September 2021 and to provide a complete reasoning so as to enable the Hong Kong Court to understand the consideration given by the Arbitral Tribunal on the matter.

2.38The Arbitral Tribunal’s email of 9 November 2021 dealt with the Court Applications, the Application for Revision and D’s application for extension of time.

(1)  In respect of the Court Applications, the Arbitral Tribunal pointed out that the scope of the Court Applications had exceeded the scope which was approved on 26 August 2021. P had therefore breached the Arbitral Tribunal's order.

(2)  In respect of the Application for Revision, the Arbitral Tribunal stated as follows:

“ … 仲裁庭己多次表示不準備接受 [P] 一再在沒有提供任何依據或支持下提出同類型的請求 (儘管仲裁庭有明確的指示，所有申請都必須有充分約法律論據和證據支持)。 直到 2021年 9月21日發出電子郵件中，[P] 才提供了其申請的相關依據。這完全是對仲裁庭命令不可接受約漠視，[P] 亦再次進一步拖延了仲裁程序 … 儘管如此，爲了正當程序的利益，也為了盡可能廣泛的調取多方證據，仲裁庭準備在例外惰況下允許這一申請 … 但是，雖然仲裁庭允許申請，仲裁庭命令與香港法院程式和調證申請在本仲裁中有關的費用成本無論如何，都應由 [P] 承擔。”

(3)  In respect of D’s application for extension of time, the Arbitral Tribunal observed that as the substantive hearing could not proceed pending the Court Applications, D’s delay did not cause any real prejudice. However, that did not mean D could delay its document production indefinitely. An extension of time of 28 days was granted and D had to provide an explanation if the extended deadline was not met.

2.39On 7 December 2021, D claimed to have completed its document production.

2.40On 29 December 2021, the Taiwan Taipei District Court, in a claim made by P against XXX XXX XXX, found that P was defrauded by a number of parties including XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX and bogus transactions involving XXX XXX XXX XXX XXX XXX XXX XXX were carried out.

2.41After conducting hearings on 11, 15 and 17 February 2022, the Hong Kong Court issued evidence taking orders against XXX XXX XXX XXX XXX (“Court Orders”).

2.42On 26 April 2022, P applied to the Arbitral Tribunal for approval of its request to the Hong Kong Court for assistance in taking evidence against another third party (ie Bank of Communications (Hong Kong) Limited) ("BOCOM Application") and for an order accepting P’s plea that the Arbitral Tribunal did not have jurisdiction (“2^nd Jurisdictional Challenge”). P pointed out that as XXX XXX did not comply with the Court Orders, the BOCOM Application was necessary to obtain the bank statements from XXX XXX’s bank (§2.23 above). Were the Arbitral Tribunal inclined to not approve the BOCOM Application, P requested a hearing pursuant to Article 17(3) of the UNCITRAL Rules.

2.43On 13 May 2022, the Arbitral Tribunal directed the parties to lodge submission on P’s applications made on 26 April 2022.

2.44On 15 June 2022, having considered the parties’ submissions, the Arbitral Tribunal rejected the BOCOM Application and the 2^nd Jurisdictional Challenge in Procedural Order No 4 (“PO No 4”):

(1)  The BOCOM Application was dismissed on the basis that P’s delay in putting forward the application was unacceptable. P already perceived the purported significance of the bank statements as early as August 2021 and there was no reason why the BOCOM Application was not made earlier but only made upon XXX XXX’s failure to comply with the Court Orders. The Arbitral Proceedings could not be delayed pending P being satisfied that it had marshalled all the evidence it considered necessary. The Arbitral Tribunal specifically pointed out that P was at liberty to make submissions and pursue its case on the role played by XXX XXX at the substantive hearing;

(2)  The 2^nd Jurisdictional Challenge was dismissed on the basis that the issue had already been decided on 10 July 2020 (ie the 2020 Decision set out at §2.9 above), in that the plea would be dealt with in the award on merits instead of as a preliminary question.

2.45In PO No 4, the Arbitral Tribunal additionally gave directions for the preparation of the substantive hearing. The parties were given two months to consult with each other on, and lodge, 4 documents, namely a List of Agreed Facts, a List of Issues, a Hearing Timetable and a Dramatis Personae. No date was fixed for the substantive hearing.

2.46By an email dated 10 July 2022 (“10/7/22 Email"), P expressed that it did not agree with PO No 4 and reserved all its rights in that regard. P expressed surprise at the Arbitral Tribunal's view that the bank statements of XXX XXX were not relevant or material to the Arbitral Proceedings. It also disagreed with the Arbitral Tribunal's view that the BOCOM Application was late, as shown by the progress of the Court Applications, which was reported to the Arbitral Tribunal on a bi-weekly basis. P submitted that the Arbitral Tribunal's decision not to grant the BOCOM Application deprived P of its right to be heard. P’s email contained a link to a document entitled "Summary of the Progress of Evidence Taking in Hong Kong Court" ("Progress Summary") together with a bundle of documents referred to in the Progress Summary. P later alleged that DL never downloaded or read the Progress Summary and the documents, which formed the main basis of the challenge against DL.

2.47By an email dated 12 July 2022, D objected to the course taken by P to challenge PO No 4 and regarded P’s action to have unjustifiably escalated costs. D repeated its request for P to pay its share of the deposit for the Arbitral Tribunal’s fees.

2.48On 3 August 2022, considering that the parties, particularly P, had misunderstood PO No 4, the Arbitral Tribunal provided further explanations to the parties ("3/8/22 Clarifications"). I shall refer to its contents below by reference to P’s complaints.

2.49The 3/8/22 Clarifications provided the impetus for the Earlier Challenge. Within the 15-day time limit prescribed by the applicable rules, on 18 August 2022, P issued the Notice of Challenge.

3.The Earlier Challenge

(i)  The applicable rules and procedures

3.1The UNCITRAL Rules provides:

(1)  Article 12(1)[10]: “Any arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.”;

(2)  Article 13(1): “A party that intends to challenge an arbitrator shall send notice of its challenge within 15 days after it has been notified of the appointment of the challenged arbitrator, or within 15 days after the circumstances mentioned in articles 11 and 12 became known to that party.”;

(3)  Article 13(3): “When an arbitrator has been challenged by a party, all parties may agree to the challenge. The arbitrator may also, after the challenge, withdraw from his or her office. In neither case does this imply acceptance of the validity of the grounds for the challenge.”;

(4)  Article 13(4): “If, within 15 days from the date of the notice of challenge, all parties do not agree to the challenge or the challenged arbitrator does not withdraw, the party making the challenge may elect to pursue it. In that case, within 30 days from the date of the notice of challenge, it shall seek a decision on the challenge by the appointing authority.”.

3.2Article 10 of the HKIAC Procedures provides:

“ Where HKIAC is to decide a challenge to an arbitrator under the UNCITRAL Rules, such challenge shall be determined by HKIAC in accordance with the procedures set out in the applicable practice note.”

3.3The Practice Note on Challenges to Arbitrators (Effective 11 March 2019) (“Practice Note”) provides:

(1)  Clause 2.1: “A party wishing to challenge an arbitrator shall submit, within 15 days after the confirmation or appointment of the arbitrator has been notified to the challenging party or within 15 days after that party became aware of the circumstances giving rise to the challenge, a Notice of Challenge and any accompanying documents to HKIAC (the “Notice of Challenge”). The Notice of Challenge shall at the same time be communicated to all other parties to the arbitration, the Challenged Arbitrator and, where applicable, the other members of the arbitral tribunal. In respect of a challenge to an emergency arbitrator, the foregoing time limits shall be shortened to three days.”;

(2)  Clause 2.2(a): “The Notice of Challenge shall be in writing and shall state the reasons for the challenge.”;

(3)  Clause 2.4: “Unless the Challenged Arbitrator withdraws or the non-challenging party agrees to the challenge, HKIAC shall determine the challenge.”;

(4)  Clause 2.5: “The grounds of a challenge shall, in principle, be limited to those set out in the Notice of Challenge. The challenging party may amend or supplement the grounds of challenge only if HKIAC considers it appropriate to allow such amendment having regard to the circumstances of the case and having consulted with the non-challenging party and the Challenged Arbitrator.”;

(5)  Clause 2.6: “Following receipt of a Notice of Challenge pursuant to paragraph 2.1 above, each other party to the arbitration and the Challenged Arbitrator may submit an Answer to the Notice of Challenge (the “Answer”), within a time limit set by HKIAC.”;

(6)  Clause 3.1: “The Proceedings Committee of HKIAC shall determine the challenge. In making its determination, the Proceedings Committee may appoint the Secretariat or a panel of one or three members (the “Panel”) to consider a challenge made to an arbitrator or an emergency arbitrator and to make a recommendation to the Proceedings Committee as to the merits of the challenge, which shall be accompanied by reasons and shall not be binding on the Proceedings Committee (the “Recommendation”). The Panel may be drawn from members of HKIAC’s Council, International Advisory Board, Proceedings Committee and Appointments Committee, and/or, where appropriate, individuals whom the Proceedings Committee considers to have substantial experience in international arbitration. The Proceedings Committee will determine the challenge following receipt of the Recommendation.”

(ii)  The Notice of Challenge

3.4The Notice of Challenge made specific references to (1) the BOCOM Application, (2) PO No 4, (3) the 10/7/22 Email and (4) the 3/8/22 Clarifications.

3.5In relation to DL, the Notice of Challenge alleged that, in the 3/8/22 Clarifications, DL had maintained the view that P had delayed in putting forward the BOCOM Application without having downloaded and read the Progress Summary and the associated documents. According to P, the foregoing amounted to actual or apparent bias (“DL Challenge”).

3.6In relation to the Arbitral Tribunal, the following 5 grounds were advanced:

(1)  By reference to 23/8/22 Clarifications §7, the Arbitral Tribunal’s refusal to hold a hearing in respect of the BOCOM Application was in breach of Article 17(3) of the UNICTRAL Rules and the Arbitral Tribunal did not keep an open mind in its handling of procedural matters (“Ground 1”);

(2)  The Arbitral Tribunal made a number of decisions which were (1) not contested between the parties, and (2) went beyond the contentions of the parties (“Ground 2”). P cited the following examples:

(a)  The Arbitral Tribunal considered that the Application for Revision constituted serious delay (3/8/22 Clarifications §2). However, the revised scope was more focused than the original scope. D also did not have any substantive objection on the modification of the scope, but only objected to the taking of evidence on the grounds that such request would significantly delay the arbitration proceedings. P was of the view that "needing time" was not the same as "delay” (“Circumstance (i)”);

(b)  The Arbitral Tribunal did not think that continuing to wait for the execution of the Court Orders would yield more evidence (3/8/22 Clarifications §4). However, this point was not debated by the parties. It was clear that the Bank of Communications had the bank statements of XXX XXX, and it would have only taken a few months to obtain the relevant documents. The Arbitral Tribunal did not explain why it was necessary to continue with the Arbitral Proceedings at that stage in a rush and without regard to procedural and substantive justice. In particular, before the Court Orders were executed, the length of the substantive hearing could not be determined and preparation for the substantive hearing could not be made because the witnesses could not be contacted and the contents of their evidence were unknown (“Circumstance (ii)”);

(c)  The Arbitral Tribunal considered that P had 8 months to take evidence from third parties but had failed to obtain any new evidence (3/8/22 Clarifications §5). P stated that D did not object on this ground, and therefore this point was not debated by the parties. P submitted that it did not have 8 months to take evidence because the hearings of the Court Applications were rescheduled to mid-February 2022 due to the Arbitral Tribunal not agreeing to the Application for Revision in time. Apart from the closure of the Registry of the Hong Kong Court from mid-March to mid-April 2022, which disrupted the inclusion of the penal notice in the Court Orders, P actually only had about one month to execute the Court Orders and make the BOCOM Application immediately afterwards on 26 April 2022. The Arbitral Tribunal's view that P had not effectively utilized the time to conduct the taking of evidence was factually inaccurate. Furthermore, P reported on the progress of the evidence taking once every two weeks and the Arbitral Tribunal throughout did not express any dissatisfaction with the progress. Also, P received a telephone call from XXX informing P that XX was not aware of any contractual relationship between XXX XXX and D during his tenure as the sole shareholder and director of XXX XXX from XXX to XXX. P reported this important new evidence to the Arbitral Tribunal as early as 1 June 2022 ("Circumstance (iii)");

(d)  In dismissing the BOCOM Application, the Arbitral Tribunal held that P had caused delay. The Arbitral Tribunal explained in the 3/8/22 Clarifications that P should have added such an application on 20 August 2021 (ie the 2021 Application referred to at §2.23 above). D only argued in its email dated 25 May 2022 that P should have added such an application by 9 November 2021. Moreover, P had already commenced its application for an order for taking of evidence as early as 12 June 2020, which was more than one year earlier than the earliest time the Arbitral Tribunal had considered that such an application should be made ("Circumstance (iv)");

(e)  As early as 12 June 2020, when P commenced its application for an order for taking evidence, the Arbitral Tribunal in its 2020 Decision had unreasonably rejected P’s application (§2.9 above) for reasons that were not argued by the parties (“Circumstances (v)”);

(f)  Without hearing the parties’ arguments, the Arbitral Tribunal issued the directions contained in its email of 9 September 2021 in respect of P’s intended application to the Mainland Court for taking evidence (§2.27 above) (“Circumstance (vi)”).

(3)  P complained of unequal treatment. The Arbitral Tribunal previously extended the time limit for the D to produce documents and did not impose sanctions on the D’s delay. D should have produced all the documents on 27 August 2021, but only claimed to have completed its production of documents on 7 December 2021. The Arbitral Tribunal did not make any costs order against D, but excused D's delay on the basis it did not affect the progress of the Arbitral Proceedings. In contrast, the Court Orders were still being enforced and the BOCOM Application did not affect the progress of the Arbitral Proceedings. However, the Arbitral Tribunal not only dismissed the BOCOM Application, but also ordered P to pay the costs of the D. P had invited the Arbitral Tribunal to explain the unequal treatment in the 10/7/22 Email but received no response (“Ground 3”);

(4)  The Arbitral Tribunal demonstrated apparent bias by using unjust and argumentative language in the 2/8/22 Clarifications (“Ground 4”). The following examples were cited:

(a)  §2: “每隔一段時間擴大一次取證範圍，反復拖延裁程式”;

(b)  §2: “然而 [P] 在2021年9月23日向香港法院提交協力廠商取證申請的時候，擅自擴大取證範圍。考慮到 [P] 已經做了擴大的取證範圍，為了讓 [P] 能夠有機會獲得香港法院的協助，而不是被法院全面駁回，仲裁庭最終勉為其難同意了P 第一次擴大取證範圍的請求”;

(c)  §2: “然而 [P] 沒有吸取教訓，反而變本加厲”;

(d)  §4: “[P]不能以第三方拒不提供證據為由無限延長仲裁程式”.

(5)  The Arbitral Tribunal attacked P’s lawyers by insinuation in the concluding remarks of the 2/8/22 Clarifications, where it was stated `'強烈建議雙方律師秉特專業精神” (“Ground 5”).

(iii)  Chronology of events subsequent to the Notice of Challenge

3.7On 16 September 2022, HKIAC invited the Arbitral Tribunal to provide a response to the Notice of Challenge.

3.8On 22 September 2022, the Arbitral Tribunal replied, stating its disagreement with the Notice of Challenge and refused to withdraw from office.

3.9On 10 October 2022, HKIAC informed the parties that the Proceedings Committee had appointed the Panel and invited written responses from D and the Arbitral Tribunal on the Notice of Challenge by 24 October 2022 (which was subsequently extended to 1 November 2022).

3.10On 12 October 2022, DL decided to withdraw from his office pursuant to Article 13(3) of the UNICTRAL Rules.

3.11The Impugned Arbitrators provided their response on 1 November 2022 (“IA Response”). As summarized in the Recommendation:

(1)  As to P’s request for assistance in taking evidence, the Arbitral Tribunal gave P several opportunities and sufficient time to put forward the relevant requests. The Arbitral Tribunal denied twice P’s applications for revision of the scope of the assistance on the basis of P’s excessive delay. Further, pursuant to the UNCITRAL Rules, the Arbitral Tribunal had the discretion to decide whether to hold an oral hearing for procedural matters. Concerning the facts of the case, the Arbitral Tribunal considered that it was pointless to hold an oral hearing. As P did not rely on any witness evidence to support its application, there was no need for cross-examination of witnesses. As regards the documentary evidence and legal submissions made by the parties, the Arbitral Tribunal took the view that the P had already submitted detailed reasons for its application and had adequate opportunity to reply, and in those circumstances, an oral hearing would not have been helpful in clarifying P’s position and whether an oral hearing was held or not did not make any difference. In any case, whether to hold an oral hearing or not cannot be a valid ground for challenging the Arbitral Tribunal's independence and impartiality;

(2)  As to P’s allegation that the Arbitral Tribunal had in the past rejected P’s applications for reasons which had not been argued by the parties, this was not a valid ground to remove the Arbitral Tribunal. The Arbitral Tribunal had a wide discretion to deal with procedural matters. Neither the UNCITRAL Rules nor the Ordinance required that an arbitral tribunal should make a ruling only on the basis of an issue argued by one of the parties;

(3)  The Arbitral Tribunal had been treating the parties with equality. When P requested the Hong Kong Court for assistance in taking evidence, the Arbitral Tribunal patiently waited for P to complete such request and could not move the arbitration forward. Therefore, D’s requests for extension of time for production of documents did not affect the progress of the Arbitral Proceedings, as they were in parallel with P’s requests for taking evidence. Indeed, after D had produced all the documents, the proceedings before the Hong Kong Court were still ongoing;

(4)  The Arbitral Tribunal did not agree with P’s criticism that the wording used was offensive to P. It was true that the Arbitral Tribunal criticized some of P’s conduct, but the comments were made fairly and based on facts. It was difficult to understand P’s allegation that the Arbitral Tribunal attacked P’s lawyers by insinuation, because the Arbitral Tribunal's email clearly stated that it was written to "both sides". Further, the Arbitral Tribunal's request was made in the hope that the parties could try to reach an agreement on the procedural matters. Such request had nothing to do with the objections to the Procedural Order No. 4 raised by P.

3.12On 8 November 2022, D provided its response out of time. It agreed with the IA Response. D requested HKIAC to dismiss the Notice of Challenge on the basis that the grounds therein were unfounded and consisted of P's subjective assumptions and arbitrary conclusions. D pointed out that, despite its objections, the Arbitral Tribunal had granted, even excessively granted, P time to request assistance for evidence taking from the Hong Kong Court. It had been almost 15 months since the Arbitral Tribunal approved P’s application on 13 August 2021, but P had not obtained any effective evidence and kept making requests to the Arbitral Tribunal to revise the scope of assistance, which led to serious delay in the Arbitral Proceedings.

3.13On 29 November 2022, P provided its reply. P contended that the IA Response constituted apparent bias and/or casted justifiable doubt on their impartiality because: (1) the Impugned Arbitrators provided their own chronology of events without pointing out any problems in P’s chronology of events; (2) the Impugned Arbitrator’s chronology of events was not drafted in a fair manner; (3) the statements made in the IA Response reflected their prejudgment of P's requests; and (4) the tone adopted by the Impugned Arbitrators was adversarial, indicating that they were acting as the other party's advocate.

3.14In relation to the Impugned Arbitrators’ comments on the grounds relied on by P:

(1)  On Ground 1, P submitted that the new reasons given for not holding a hearing objectively gave rise to justifiable doubt as to the truth of those reasons. The balancing of fairness and efficiency as provided for in Article 17(1) of the UNCITRAL Rules had not been argued by the parties. P’s main defence was fraud, and the evidence was essential for the P’s defence. Therefore, a hearing should have been held. Even if the Arbitral Tribunal had the discretion to decide whether to hold a hearing, it did not have the power to make a decision based on reasons which were not argued by the parties or without a hearing. The Impugned Arbitrators’ view that there was no need for cross-examination was first raised in the IA Response and, in any event was not a prerequisite for a hearing. The Impugned Arbitrators did not explain how P had a sufficient opportunity to respond;

(2)  On Ground 2, the making of the decisions by the Arbitral Tribunal based on matters which were not argued or raised by the parties or beyond the parties’ arguments indicated that P did not have sufficient opportunity to respond to those matters or reasons. This constituted apparent bias and/or casted justifiable doubt on the impartiality of the Arbitral Tribunal;

(3)  On Ground 3, the Impugned Arbitrators did not explain why there was no unequal treatment as asserted by P;

(4)  On Ground 4, the Impugned Arbitrators did not respond to P’s assertion concerning the language used;

(5)  On Ground 5, the Impugned Arbitrators did not explain the necessity and meaning of the phrase “秉特專業精神”;

(6)  The Impugned Arbitrators did not address the question as to whether DL’s bias would lead to apparent bias of the Arbitral Tribunal. However, as the Panel noted in the Recommendation, the foregoing complaint was not raised by P in the Notice of Challenge, and only raised by P to the HKIAC in its reply to the IA Response.

3.15As stated above, the Earlier Challenge was dismissed by the Proceedings Committee of HKIAC on 4 May 2023, following the issuance of a Recommendation by the Panel on 2 May 2023.

3.16Relevant to the Additional Grounds is the Panel’s observation at Recommendation §§77 to 79:

“ [77] While no parties have raised any issue with the timeliness of the Challenges, the Panel wishes to consider this matter for the sake of completeness of this Decision.

[78] Article 13.l of the UNCITRAL Rules and paragraph 2.1 of the Practice Note set a time limit for a party to submit the Notice of Challenge. According to these provisions, [P] shall submit its Notice of Challenge within 15 days after [P] became aware of the "circumstances" mentioned in Article 13.l. As regards the circumstances that arose outside of the 15-day time limit but gave rise to the Challenges due to the cumulative effect of such circumstances, ‘the concern with the overall effect of the circumstances is to be balanced against concern that the challenging party is referring to recent circumstances to revive a stale challenge’.

[79] As P submitted the Notice of Challenge on 18 August 2022, in principle, its Challenges could only be based on circumstances of which the P became aware on or after 3 August 2022. The Panel notes that P’s Challenges primarily concerned the [3/8/22 Clarifications] which [were] issued by the Tribunal on 3 August 2022.”

3.17In the present application, P acknowledged in its Supplemental Skeleton Submissions that it relies on at least 2 Additional Grounds. The first is based on the Alleged Prejudgment contained in PO No 3 (issued on 9 September 2021 set out at §2.21(2)) above (“1^st Additional Ground”). The second is based on an allegation that PO No 4 (issued on 16 June 2022) had the effect of denying P a reasonable opportunity to present its case (“2^nd Additional Ground”).

3.18The Additional Grounds are plainly outside of the 15-day time limit by reference to the Notice of Challenge issued on 18 August 2022.

4.The applicable principles

(i)  Whether P should be permitted to rely on the Additional Grounds

4.1Section 26(1) of the Ordinance, which gives effect to Article 13 of the UNICTRAL Model Law provides as follows:

“ Article 13 of the UNCITRAL Model Law, the text of which is set out below, has effect subject to Section 13(4) —

‘Article 13. Challenge procedure

(1) The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of paragraph (3) of this article.

(2) Failing such agreement, a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in article 12(2), send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(3) If a challenge under any procedure agreed upon by the parties or under the procedure of paragraph (2) of this article is not successful, the challenging party may request, within thirty days after having received notice of the decision rejecting the challenge, the court or other authority specified in article 6 to decide on the challenge, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award.’. ” (emphasis added)

4.2In the course of the Earlier Challenge, P appeared to have disputed whether the Arbitral Proceedings were governed by the HKIAC Procedure, and hence whether the Practice Note was applicable to the Earlier Challenge. This dispute was no longer maintained by P in the present application, whether in Mr Fong’s submissions or on the evidence[11]. I therefore proceed on the basis that the parties had agreed that the Earlier Challenge was to be governed by the UNCITRAL Rules, the HKIAC Procedure and the Practice Note (collectively “Applicable Rules”).

4.3On the issue of whether P should be permitted to rely on the Additional Grounds, Mr Fong made the following “overarching points”:

(1)  Article 13(2) of the UNCITRAL Model Law only requires the stating of the reasons and not providing the evidence justifying the challenge: UNICTRAL Arbitration Rules: A Commentary, 2^nd Ed at page 248. Mr Fong submitted that I should treat the Additional Grounds as evidentiary circumstances of the “umbrella reason” in the Earlier Challenge, namely the Arbitral Tribunal failed to give P a reasonable opportunity to present its case;

(2)  The present application is not an appeal but a de novo hearing. Mr Fong drew an analogy with S Co v B Co [2014] 6 HKC 421 where, in the context of a de novo review of an arbitral tribunal’s ruling on a plea of jurisdiction, Mimmie Chan J remarked that the court should consider the challenge on its own, and on the facts and evidence presented to the court.

4.4I do not agree with Mr Fong.

4.5In my view, the reference to Article 13(2) of the UNCITRAL Model Law, in the circumstances of the present case, is entirely misconceived. First, as I have already set out at §4.2 above, P no longer maintains its position that the Earlier Challenge was not governed by the Applicable Rules. Secondly, in any event, Article 13(2) plainly has no application, as the Earlier Challenge was not decided by the Arbitral Tribunal[12] but by the Proceedings Committee of the HKIAC.

4.6Article 13(3) requires the court, in its supervisory role, to decide afresh on an unsuccessful challenge previously determined, where there were procedures agreed between the parties, under those agreed procedures. It seems to me quite plain that, if P were allowed to rely on the Additional Grounds, the challenge before me is no longer the unsuccessful challenge previously determined under the procedures agreed between the parties. I have already set out the relevant Applicable Rules at section 3(i) above. Permitting P to rely on the Additional Grounds would be a clear departure from (1) Article 13(1) of the UNICTRAL Rules and Clause 2.1 of the Practice Note (allowing a challenge to be raised beyond 15 days after P became aware of the relevant circumstances) and (2) Clause 2.5 of the Practice Note (allowing P to rely on grounds not stated in the Notice of Challenge without consulting D and the Impugned Arbitrators).

4.7I also do not regard the analogy sought to be drawn with S Co is an apt one. The proposition to be derived from S Co is that, in the context of challenging jurisdiction under Article 16 of the UNITRAL Model Law, unless waiver applies, the parties can raise before the court new objections not previously raised before the arbitral tribunal:

“ [30] In the case of Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2011] 1 AC 763, [2011] 1 All ER 485 (UKSC), the English Supreme Court held that an arbitral tribunal’s decision as to the existence of its own jurisdiction could not bind a party who had not submitted the question of arbitrability to that tribunal; and that a person who denied being party to an arbitration agreement was under no obligation to participate in the arbitration or to take any step in the country of the seat of the allegedly invalid arbitration. The court further held that where an English court was asked to enforce a foreign arbitration award, and an application was made to resist enforcement on the ground that the alleged arbitration agreement was not valid, the court would determine anew the question as to whether or not the non-signatory had been a party, and that in so doing, the tribunal’s own view of its jurisdiction had no legal or evidential value, although the court would examine its reasoning and conclusions.

[34] Finally, the judgment of Lord Saville of Newdigate SJC in Dallah states:

‘ … the starting point in this case must be an independent investigation by the court of the question whether the person challenging the enforcement of the award can prove that he was not a party to the arbitration agreement under which the award was made. The findings of fact made by the arbitrators and their view of the law can in no sense confine the court, though of course the court may find it useful to see how the arbitrators dealt with the question. Whether the arbitrators had jurisdiction is a matter that in enforcement proceedings the court must consider for itself.’

[35] … When the jurisdiction of the tribunal is challenged, the issue in dispute is whether there was initial consent to the submission of the dispute to arbitration and to the tribunal’s determination. Since art 16 provides for the court to decide the matter of the tribunal’s jurisdiction, the court must independently determine for itself whether or not the parties had consented to the submission of the dispute to the tribunal, and should not be bound or restricted by the tribunal’s preliminary decision on its own jurisdiction. The court should not be in a worse position than the arbitrator in its determination of the challenge. Natural justice also requires such independent review, as otherwise the tribunal would be the final judge of its own powers and cause.

…

[37] I agree with Mr Wong, however, that the de novo review of the tribunal’s ruling on its jurisdiction simply means that the court considers the challenge on its own, and on the facts and evidence presented to the court. A party is still entitled to argue that the party raising the challenge to jurisdiction is estopped from complaining of some alleged irregularity, or raising some completely new objection, not on the basis that it had never been raised before the tribunal, but because the party had by its own conduct in the arbitration waived such irregularity.” (emphasis added)

4.8However, unlike the Earlier Challenge which was governed by the Applicable Rules, as I understand it, the arbitration rules usually do not prescribe a specific procedure to a plea as to the jurisdiction of the arbitral tribunal, and Mr Fong certainly has not referred to any.

4.9In the foregoing regard, the general proposition is that a party who knowingly refrains from challenging an arbitrator on the grounds of circumstances related to his alleged lack of independence or impartiality within the time limit provided by the applicable arbitration rules is deemed to have waived the right to raise such circumstances before the court: UNCITRAL Model Law on International Commercial Arbitration: A Commentary at page 246.

4.10Mr Fong however suggested that there is material which supports the contrary view, namely some national courts have held that a mere negligent ignorance of the factual basis for a challenge, even if it rises to the level of constituting constructive knowledge, is insufficient to constitute waiver or to trigger the time limit. As there arguably was no waiver, (Mr Fong reasoned) I should therefore consider the Additional Grounds.

4.11In my view, Mr Fong’s argument has the opposite effect. First, there is no suggestion that the Additional Grounds were not pursued in the Earlier Challenge out of “negligent ignorance”. Secondly, if P maintains that it is not barred by the time limit to raise the Additional Grounds under the Applicable Rules, it seems to me obvious that the proper course for P to take is raise the Additional Grounds by issuing a further Notice of Challenge and for the Additional Grounds to be processed under the procedure agreed between the parties.

4.12Mr Fong suggested that as present application was served on D and the Impugned Arbitrators, it was open to them to deal with the Additional Grounds, but they chose not to. I am unable to accept Mr Fong’s submissions. First, it is for P to provide justification that it may rely on the Additional Grounds. Secondly, taking Mr Fong’s submissions to their logical conclusion, the time limits prescribed under the Applicable Rules would become completely otiose. Thirdly, especially in the case of a challenged arbitrator, he will more likely than not have to incur legal expenses in contesting the court proceedings involving new complaints which are considered “stale” under the Applicable Rules.

4.13For the above reasons, I am of the view that P is not permitted to rely on the Additional Grounds.

4.14I should point out that §4.11 above should not be construed as a tacit or explicit encouragement to P to mount a new challenge based on the Additional Grounds. The Impugned Arbitrators and D have not commented on them, but my provisional view is that they do not come close to showing apparent bias.

4.15In relation to the 1^st Additional Ground, looking at the matter holistically, I do not see how it can be said, from the perspective of a hypothetical fair-minded and informed observer[13], that the Impugned Arbitrators had prejudged the Fraud Defence. The Alleged Prejudgment in PO No 3 was expressed in the context that the Impugned Arbitrators were entitled to take into account P’s non-payment of its share of the deposit for the fees of the Arbitral Tribunal in the exercise of its discretion on whether to it should make a request to the Hong Kong Court for assistance in taking evidence. There was no contemporaneous allegation of the Alleged Prejudgment, and indeed P had at one point offered to pay for the costs for the Arbitral Tribunal making the request (§§2.15 to 2.22 above). The fact of the matter was that the Arbitral Tribunal, for practical and legal reasons, decided not to make a request itself but granted its approval to P to make the request (which exercise was to obtain evidence in support of the Fraud Defence). The Arbitral Tribunal’s approval to obtain evidence in support of the Fraud Defence is inimical to the Alleged Prejudgment.

4.16In any event, the correctness of notion that the Impugned Arbitrators’ comment that P was in breach of the Arbitration Agreement necessarily amounted to a prejudgment of the Fraud Defence is debatable. Again, D and the Impugned Arbitrators have not commented on it, but it seems to me that an obvious response is that P’s position ignores the doctrine of separability, which provides that even where the underlying contract is vitiated, the arbitration agreement which forms part of it may still be upheld as a valid and independent agreement so that any disputes within its scope must be referred to arbitration: Russell on Arbitration, 24^th Ed at §§2-011. In other words, it was entirely possible for the Arbitral Tribunal to have formed the view that P was in breach of the agreement to arbitrate, without forming the view that the Fraud Defence was unsubstantiated.

4.17In relation to the 2^nd Additional Ground, the allegation that PO No 4 has the effect of denying P a reasonable opportunity to present its case, in my provisional view, is not made out. PO No 4 did not fix a date for the substantive hearing and only required the parties prepare and file within 2 months (1) a List of Agreed Facts, (2) a List of Issues, (3) a Hearing Timetable and (4) a Dramatis Personae. It seems to me quite clear that the preparation of the foregoing 4 documents could proceed pending the execution of the Court Orders. PO No 4 §12 expressly provides that the Arbitral Tribunal would thereafter consult with the parties matters relating to the substantive hearing including dates, duration and other protocols. As far as I can see, there is nothing to prevent P from raising at that time the progress of its execution of the Court Orders and how that would impact on the hearing dates and duration of the substantive hearing. The hearing bundles are required to be lodged only 5 days before the substantive hearing. No doubt documents obtained in the meantime pursuant to the Court Orders may then be included in the bundles to be compiled. Indeed, this was precisely the clarification offered at 3/8/22 Clarifications §5, namely that the Arbitral Tribunal did not preclude the inclusion of any evidence obtained pursuant to the Court Orders.

4.18Further, the fair-minded and informed observer would also note the inherent tension in the positions taken by P at the time of PO No 4. On the one hand, it raised the 2^nd Jurisdictional Challenge, on the basis that it had established the Fraud Defence despite the (lack of) progress of the enforcement of the Court Orders and the dismissal of the BOCOM Application. On the other hand, P maintained a complaint that it was prevented from presenting its case on the Fraud Defence, as evidence was outstanding (to be obtained pursuant to the Court Orders) and relevant evidence was not allowed to be obtained (due to the dismissal of the BOCOM Application).

(ii)  Apparent bias

4.19The applicable test is stated at Jung Science Information Technology Co Ltd v ZTE Corporation [2008] 4 HKLRD 776 §§50-52. The test is whether an objective fair-minded and informed observer, having considered the relevant facts, would conclude that there was a real possibility that the tribunal was biased. The test is not whether the particular litigant thinks or feels that the arbitral tribunal has been or may have been biased.

4.20The attribute of the hypothetical objective fair-minded and informed observer is as follows (Jung Science §53):

“ The attributes of the fictitious bystander to whom courts defer have therefore been variously stated. Such a person is not a lawyer. Yet neither is he or she a person wholly uninformed and uninstructed about the law in general or the issue to be decided. Being reasonable and fair-minded, the bystander, before making a decision important to the parties and the community, would ordinarily be taken to have sought to be informed on at least the most basic considerations relevant to arriving at a conclusion founded on a fair understanding of all the relevant circumstances. The bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers. The bystander must also now be taken to have, at least in a very general way, some knowledge of the fact that an adjudicator may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted. The fictitious bystander will also be aware of the strong professional pressures on adjudicators (reinforced by the facilities of appeal and review) to uphold traditions of integrity and impartiality. Acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context. Finally, a reasonable member of the public is neither complacent nor unduly sensitive or suspicious.” (emphasis)

4.21The reference in the above quotation to “may properly adopt reasonable efforts to confine proceedings within appropriate limits and to ensure that time is not wasted” is consonant with and should be considered in the light of the requirements and duties set out at sections 46(2) and (3) of the Ordinance:

“ (2) The parties must be treated with equality.

(3) When conducting arbitral proceedings or exercising any of the powers conferred on an arbitral tribunal by this Ordinance or by the parties to any of those arbitral proceedings, the arbitral tribunal is required -

(a) to be independent;

(b) to act fairly and impartially as between the parties, giving them a reasonable opportunity to present their cases and to deal with the cases of their opponents; and

(c) to use procedures that are appropriate to the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for resolving the dispute to which the arbitral proceedings relate.”

4.22In a similar vein, Articles 17 of the UNCITRAL Rules provides:

“ (1) Subject to these Rules, the arbitral tribunal may conduct the arbitration in such manner as it considers appropriate, provided that the parties are treated with equality and that at an appropriate stage of the proceedings each party is given a reasonable opportunity of presenting its case. The arbitral tribunal, in exercising its discretion, shall conduct the proceedings so as to avoid unnecessary delay and expense and to provide a fair and efficient process for resolving the parties’ dispute.

…

(3) If at an appropriate stage of the proceedings any party so requests, the arbitral tribunal shall hold hearings for the presentation of evidence by witnesses, including expert witnesses, or for oral argument. In the absence of such a request, the arbitral tribunal shall decide whether to hold such hearings or whether the proceedings shall be conducted on the basis of documents and other materials.”

4.23As already alluded to, the nature of the present application is a de novo hearing. As noted by Burrell J at Pacific China Holdings Ltd v Grand Pacific Holdings Ltd [2007] 3 HKLRD 741 §15(3), it is permissible for me to accord some weight to the views expressed by the Panel in the Recommendation.

5.Analysis of the Grounds set out in the Notice of Challenge as pursued by Mr Fong

5.1As stated at §3.17 above, Mr Fong acknowledged that P relies on at least the 2 Additional Grounds. There are 3 other complaints advanced by Mr Fong which merit mention, namely (1) the allegation that the Impugned Arbitrators were tainted by reason of DL’s apparent bias (2) the allegation that the manner in which the Impugned Arbitrators conducted themselves in the Earlier Challenge, especially in the wording of the IA Response, showed apparent bias and (3) the expansion of Ground 5 to include the Arbitral Tribunal’s email of 20 September 2021.

5.2First, as noted above, DL resigned from his office on 12 October 2022, but nevertheless P persisted with the DL Challenge. As the DL Challenge was dismissed by the Proceedings Committee, there was no question of the Impugned Arbitrators being tainted by DL’s apparent bias.

5.3In the present application, P invites the court to decide on the DL Challenge, because unless the court decides that the DL Challenge is substantiated, the complaint that the Impugned Arbitrators were tainted by DL’s apparent bias equally cannot get off the ground.

5.4However, the present application was not served on DL, and such failure is plainly a non-compliance with the mandatory provisions of RHC Order 73, rule 5(5)(b), requiring the originating summons to be served on the arbitrator. I decline to entertain this complaint. Even had I done so, I would have found against P on both bases. Primarily, the DL Complaint in my view is not substantiated for the reasons set out in the Recommendation, namely the Progress Summary was not necessary for DL to have come to or concurred with the views expressed in the 3/8/22 Clarifications. Additionally, the fair-minded and informed observer would be aware that ML and YZ are both arbitrators of standing and experience. Mr Fong’s suggestion that DL’s status as a senior counsel would lead the fair-minded and informed observer to conclude that Impugned Arbitrators were more likely to be influenced by DL is entirely without basis (Mr Fong’s Skeleton Submissions §168).

5.5Secondly, P did not seek to include the allegations against the conduct of the Impugned Arbitrators’ conduct in the Earlier Challenge by seeking to amend or supplement the Notice of Challenge pursuant to Clause 2.5 of the Practice Note. As noted at Recommendation §66, the allegation was only made in P’s reply to the IA Response. The Panel did not deal with it, and views were not sought from the Impugned Arbitrators and D. For the same reasons given for my refusal to allow P to rely on the Additional Grounds, I decline to consider this allegation.

5.6Thirdly, Ground 5 as set out in the Notice of Challenge only includes a complaint against the content of the 3/8/22 Clarifications. Mr Fong in his Skeleton Submissions also invited me to consider the Arbitral Tribunal’s email of 20 September 2021, in which it was stated that the Arbitral Tribunal did not intend to continue to waste all parties’ time. For the same reasons given for my refusal to allow P to rely on the Additional Grounds, I decline to consider this allegation.

5.7I now deal with the grounds set out in the Notice of Challenge as pursued by Mr Fong.

(i)  Grounds 1 and 2

5.8Mr Fong dealt with Grounds 1 and 2 together. Underscoring his submissions on Ground 1 is the proposition that, under Article 17(3) of the UNCITRAL Rules (set out at §4.22 above), the Impugned Arbitrators have no discretion to refuse an oral hearing when such is requested by a party, even in respect of procedural matters.

5.9As noted at §2.14 above, the Impugned Arbitrators were acutely aware of the need to hold a substantive hearing, if so requested by a party. The Impugned Arbitrators were further of the view that their refusal to hold a hearing in respect of the BOCOM Application when requested by P on 26 April 2022 (§2.42 above), even if amounting to a failure, was not a reason substantiating the challenge (§3.11(1) above).

5.10Mr Fong cited a plethora of commentaries to support his argument that it is established that the obligation to hold a hearing when requested applies also to procedural matters. In my view, Mr Fong’s proposition is not without controversy. Even on the material cited by Mr Fong, he only selectively relied on those parts which were favourable to his position, without referring to the whole. By way of example, I have quoted below the entirety of some of the commentaries referred to by Mr Fong and only the italicized portions were set out in his Skeleton Submissions (and the bolded portions are against his proposition):

(1)  The UNCITRAL Arbitration Rules: A Commentary, 2^nd Ed at page 50:

“ The limits on the right to a hearing guaranteed by Article 17(3) art not entirely clear, however. At face value, the provision appears to include the right to request hearings not only on the merits, but also on jurisdictional and other preliminary questions and even procedural matters. On the other hand, the participants of the New Delhi Congress, when referring to a right “generally available in legal proceedings,” plainly did not contemplate a right to have a separate hearing on any kind of preliminary issue. Further, the inclusion of the phrase “any stage of the proceedings” in the 1976 Rules (which was not included in the Preliminary Draft) does not contradict this conclusion. The quoted phrase was added in response to the suggestion of the representative of the Soviet Union who “proposed an amendment to the effect that a party might request an oral hearing at any stage in the proceedings, not just at the begin- ning.” Thus the altered wording was not intended to have any bearing on the question of whether there is a right to a hearing on procedural and other issues, but only to clarify when a hearing can be requested. (As explained below, the phrase “any stage of the proceedings” was replaced by “an appropriate stage of the proceedings” in the 2010 UNCITRAL Rules.)

The Iran-US Claims Tribunal has interpreted corresponding Article 15(2) of the 1976 Rules so as to make the right to a hearing dependent on whether or not the question regards “procedural matters.” If it does, a hearing can be dispensed with, notwithstanding a party’s request concerning it. The right to a hearing has been considered excluded, inter alia, for requests for interim measures and preliminary jurisdictional questions.” (underlined words referred to by Mr Fong)

(2)  UNCITRAL Model Law & Arbitration Rules: The Arbitration Act 2005 (Amended 2011 & 2018) and the AIAC Arbitration Rules 2018 at §26.8 to 26.10:

“ [26.8] However, if the parties have not agreed on any procedure, this section grants parties the right to make a request for an oral hearing at any point. The use of the word "shall" indicates that it is mandatory upon the arbitral tribunal to consider and agree to such a request. This follows the basic principles of natural justice and “audi alteram partem", ensuring no prejudice against any one party.

[26.9] The question is if a party requests oral hearing, is the arbitral tribunal obliged to comply with it or does it have discretion to dismiss the request or go on to vary the parties' previous agreement? This is a battle involving the autonomy of the parties and the arbitral tribunal's power to determine the conduct of the procedure in the manner it considers best in the circumstances of the case, the right each party has to present its case with ample opportunity, and the right to be heard.

[26.10] Since section 26(2) uses the word "shall", the arbitral tribunal may be obliged to hold an oral hearing. However, it retains the discretion over the timing of such oral hearing. Also, there is nothing in this section to prevent the arbitral tribunal from asking for the reason for the request if no factual issues have been raised in the pleadings. If there are no more factual issues to be adduced, the arbitral tribunal may dispense with the oral hearing. ” (underlined words referred to by Mr Fong)

5.11Further, other textbooks advance positions contrary to that advocated by Mr Fong, for example, at Arbitration Practice and Procedure, Professor Mark Cato, 3^rd Ed §17.9.1:

“ … Previously it had been held that if either party asked for a hearing, the arbitrator must agree or risk the possibility of being found to have miscounted the proceedings … It may well be that the judicial view of arbitration has changed over the 30 years or so…”

5.12A case in point is Kenworth Engineering Ltd v Nishimatsu Construction Co Ltd, HCCT 33 of 2004, 25 May 2004 which was a case dealing with an application for removal of an arbitrator for misconduct in refusing to hold an oral hearing, at the request of one of the parties to the arbitration. Reyes J said:

“ [2] The 1^st ground in the Notice is that the Arbitrator failed properly to consider Kenworth's application that there be an oral hearing in relation to the matters which became the subject of the 8^th Award. In rejecting Kenworth's application for an oral hearing by a letter dated 7 April 2004, the Arbitrator (normally based in South Africa) stated:-

‘ I have given anxious consideration for your request for an oral hearing to reconsider the timetable for this matter. You have in that letter [of 2 April 2004] given reasons why you say there should be an oral hearing.

You say that it is reasonable to ask for such a hearing for any important matter, that it would be convenient to deal with each step in the timetable at such a hearing and that an oral hearing would enable me to clarify matters when I am in doubt. It may be reasonable to ask and there may be some advantages in having a oral hearing, but I have to consider whether the costs of and delay involved in such a hearing are factors that outweigh these possible advantages. I do not consider the possible advantages are sufficient. The matter is purely procedural with no substantive rights being affected. I see no difficulty in fixing each step of the timetable if it is to be adjusted. And you need not be concerned about me being in doubt. If I am, I will ask for clarification.

There is no, or very little, law involved in the matter that would benefit from argument by senior counsel.

What advantages there are would arise mostly from a 'live' hearing, and I cannot come to Hong Kong this month, having business here in Cape Town. These possible advantages fade when one considers a video conference. But even a video conference would take time to arrange. As I see the present position, any substantial delay now would put the scheduled dates in jeopardy. Your senior practitioners are away until about this time next week. It would take more time to arrange a video conference and I would need time to consider my decision. That would mean that a change in the timetable would become inevitable before I had even decided whether or not there should be such a change.

In the result, I am totally unconvinced that an oral hearing would be worth the delay and cost, and that application is refused.’

[3] In my view, far from being obviously or seriously wrong, the Arbitrator's reasoning seems impeccable. I do not see that his commonsense, practical decision gives rise to any unfairness or constitutes any misconduct, whether technical or otherwise.”

5.13For the purpose of the present application, I am not required to determine conclusively the correctness of the position advocated by Mr Fong, namely that Article 17(3) applies to both substantive hearings on the merits and hearings on procedural matters.

5.14The fair-minded and informed observer would know that there are respectable arguments to the contrary and would not conclude from the Impugned Arbitrator’s refusal to hold a hearing requested by P that there was a real possibility that they were biased. The observer would also have noted that PO No 1 §§22-23 (§2.10 above) made specific provisions even at the outset of the Arbitral Proceedings on how an interlocutory application would be dealt with, and directions were given to the parties to lodge submissions on the BOCOM Application on 13 May 2022 (§2.43 above) and was only decided after careful considerations of the parties’ submissions.

5.15In relation to Ground 2, Mr Fong highlighted the need for the parties to be given a reasonable opportunity to present their arguments on all the essential building blocks of the Arbitral Tribunal’s decision, and in making various adverse conclusions when they were not argued between the parties, the Arbitral Tribunal had deprived P of that reasonable opportunity: Zermalt Holdings SA v Nu-Life Upholstery Repairs Ltd [1985] 2 EGLR 14 at 15L.

5.16I note that Zermalt and the other cases cited by Mr Fong in support of the same proposition are all concerned with awards on the merits. In my view, there is plainly a distinction in the arbitration context between an award on the merits and procedural decisions. I agree with the observations made at Recommendation §93:

“ Similar to the other assertions of [P] which are discussed below, P appears to be labouring under the impression that the arbitral tribunal could only rely on the contents of the submissions made by the parties in making procedural decisions and directions. Hence, it would appear that [P] seems to expect that the arbitral tribunal would only make use of the exact wording of the arguments made by the parties and nothing else in its decisions. The Panel does not consider this to be correct, as the arbitral tribunal was entitled to also take into account the relevant factual circumstances of the case to consider and decide on the procedural matters with a view to avoiding unnecessary delay and expense, and to provide a fair and efficient process for resolving the parties' dispute as provided in Article 17(1) of the UNCITRAL Rules…”

5.17To supplement the Panel’s above observations, Russell on Arbitration, 24^th Ed §5-105 states:

“ … An arbitrator must act judicially, but is “master of his own procedure” and is expected to adopt a proactive approach to case management. It is not necessary for reasons to be given regarding why particular case management directions have been made. The court will not interfere with the exercise of his discretionary powers for dealing with procedural and evidentiary matters during the course of the reference unless his conduct is so extreme as to warrant his removal. For example, it is for the tribunal to decide what, if any disclosure should be ordered and when it should be given. Moreover the tribunal is entitled to change its mind and order disclosure of documents even if it previously declined a request for their production.”

5.18In my view, none of the 6 circumstances referred to by P under Ground 2 (set out at §3.6(2) above) comes close to being a case of “extreme conduct” warranting the removal of the Impugned Arbitrators.

5.19Circumstance (i) is related to the Impugned Arbitrators view expressed in at 3/8/22 Clarifications §2 that the Application for Revision caused serious delay. Mr Fong did not make any specific submissions on Circumstance (i) and only invited me to take it into consideration: Skeleton Submissions §99(4). In my view, Mr Fong was correct not to pursue Circumstance (i) with enthusiasm. As the Panel noted at Recommendation §93, the point of serious delay caused by the exercise of taking evidence was argued by D and it was open to the Impugned Arbitrators to refer to the relevant procedural events.

5.20Circumstance (ii) concerns again the 3/8/22 Clarifications, where at §4 the Impugned Arbitrators held the view that continuing to wait for the execution of the Court Orders would not yield more evidence. In my view, prior to the 3/8/22 Clarifications, P only pointed out that the execution of the Court Orders was still ongoing. There was nothing to suggest that P had indicated to the Impugned Arbitrators that it was hopeful that the execution of the Court Orders would prove fruitful. In any event, the fair-minded and informed observer would note, as stated at §4.16 above, that PO No 4 did not have effect of shutting out the evidence obtained pursuant to the Court Orders, if any was obtained.

5.21Circumstance (iii) is another instance where Mr Fong did not make any specific submissions on: Skeleton Submissions §99(5). As noted by the Panel at Recommendation §101, the reference to 8 months was factually a reference to the period between 23 September 2021 (when P made the Court Applications) to 15 June 2022 (when PO No 4 was issued). It is also factually correct that during the period, P did not make any application to the Arbitral Tribunal to adduce any new evidence arising from the evidence taking exercise.

5.22Circumstance (iv) is yet another instance where Mr Fong did not make any specific submissions on: Skeleton Submissions §99(3). As stated at §§2.23 above, P at the outset held the view that the bank statements of XXX XXX were relevant. The Impugned Arbitrators were entitled to hold the view that the BOCOM Application could have been included when P made the 2021 Application.

5.23Circumstance (v) is an instance where Mr Fong pursued with rigour in his written submissions. I think he refrained from seriously pressing the point at the hearing. Mr Fong complained that in PO No 1, the Impugned Arbitrators dismissed the 2020 Application as it was oppressive and amounted to a fishing expedition. That complaint is factually erroneous. As set out at §2.9 above, the Impugned Arbitrators only held the view that the 2020 Application was premature, since no pleadings had been filed and the issues had then not been crystallized. Whilst the Impugned Arbitrators did mention oppression and fishing expedition, they were only mentioned as requirements to be considered in any application made under section 55 of the Ordinance. Importantly, the Impugned Arbitrators expressly stated that whether P’s application was or was not oppressive or a fishing expedition could not then be evaluated. In my view, it is entirely unhelpful for P to advance a blinkered case without carefully considering the Impugned Arbitrators’ reasons.

5.24Circumstance (vi) is yet another instance where Mr Fong did not make any specific submissions on: Skeleton §99(1). As noted at §2.27 above, P only intimated that it was possible that it would apply to the Mainland Court. No decision was made by the Impugned Arbitrators and all that was done was the Impugned Arbitrators giving indications of the considerations they would take into account should P make an application to adduce evidence obtained from the intended Mainland proceedings.

5.25For the above reasons, I agree with the Panel that Ground 2 is not made out.

(ii)  Ground 3

5.26Ground 3 is set out at §3.6(3) above. Mr Fong did not make any specific submissions on Ground 3 (Skeleton Submissions §§215-216).

5.27I agree with the Panel’s conclusion at Recommendation §§107-108. Essentially, the Impugned Arbitrators were entitled to take the view in its email dated 9 November 2021 that, due to P's Court Applications, the delay in document production by the D had not affected the progress of the Arbitral Proceedings. In respect of the BOCOM Application, the Impugned Arbitrators were entitled to take the view that it was a late application and refused it on that basis. Costs were also a matter within the discretion of the Impugned Arbitrators. There were occasions where time extensions were granted to P, for example to submit the Statement of Defence and the Court Applications, without being visited with any adverse costs orders. Likewise, in respect of P’s failed Application for Revision made on 1 September 2021, no costs order was made against P. In those circumstances, I agree with the Panel that Ground 3 is not made out.

(iii)  Ground 4

5.28Ground 4 is set out at §3.4(4) above. Mr Fong principally pursues P’s complaints against the comments set out at §3.4(4)(a), (c) and (d): Skeleton Submissions §§174 and 185.

5.29It must be emphasized that the Impugned Arbitrators accepted that they did criticize P’s conduct but they contended that their comments were fairly made and based on facts (§3.11(4) above).

5.30Mr Fong relied on the Singaporean case of Turner (East Asia) Pte Ltd v Builders Federal (Hong Kong Ltd) & Anor [1988] 1 SLR(R) 483. On the facts of that case, the challenge against the arbitrator succeeded. In doing so, Chao Hick Tin JC (as he then was) said at §78 that an arbitrator’s response and words used must always be measured and circumspect.

5.31I am not sure whether Turner really assists P. First, each case involves different factual circumstances. Secondly, it does not appear Turner applied the test from the perspective of a hypothetical objective fair-minded and informed observer set out at §4.19 above: Turner §§64 to 77.

5.32There was no attempt by Mr Fong to address the relevant attributes of the fair-minded and informed observer in the context of Ground 4, including (1) the bystander would be taken to know commonplace things, such as the fact that adjudicators sometimes say, or do, things that they might later wish they had not, without necessarily disqualifying themselves from continuing to exercise their powers and (2) acting reasonably, the fictitious bystander would not reach a hasty conclusion based on the appearance evoked by an isolated episode of temper or remarks to the parties or their representatives, which was taken out of context.

5.33In my view, a fair-minded and informed observer would not conclude from any of the comments pursued in Ground 4 that there was a real possibility that the Arbitral Tribunal was biased.

5.34To put matters into their proper perspective, all 4 comments are set out in the 3/8/22 Clarifications. In other words, even if the 3/8/22 Clarifications presented an isolated episode of temper and the Impugned Arbitrators, on reflection, wished the comments were not made, Mr Fong has not sought to address why the foregoing would necessarily disqualify them from exercising their powers.

5.35In any event, in my view, a fair-minded and informed observer would agree with the Impugned Arbitrators that their criticisms were fairly made and based on facts. By the time of the 3/8/22 Clarifications, P had obtained approval based on the 2021 Application on 26 August 2021, and only a few days later on 1 September 2021 made the Application for Revision. The Application for Revision was rejected on inter alia the basis that it was not reasoned and P only provided its reasons on 21 September 2021, two days before it submitted the Court Applications. The Court Applications were unilaterally submitted on a scope which was in excess of the approval given by the Arbitral Tribunal, and that resulted in the Court Applications being adjourned, on the basis that the Hong Kong Court directed P to seek approval from the Arbitral Tribunal on the unapproved scope. The Arbitral Tribunal was therefore driven to consent to the Application for Revision. The Arbitral Tribunal had pointed out that the BOCOM Application could have been made earlier, as P perceived the importance of the bank statements of XXX XXX even in August 2021.

5.36Against the above background, it seems to me that all 4 comments, accepted to be criticisms by the Impugned Arbitrators, namely (1) “每隔一段時間擴大一次取證範圍，反復拖延裁程式”, (2) “仲裁庭最終勉為其難同意了P 第一次擴大取證範圍的請求”, (3) “然而 [P] 沒有吸取教訓，反而變本加厲” and “[P]不能以第三方拒不提供證據為由無限延長仲裁程式” would not be regarded by the fair-minded and informed observer as showing a real possibility that the Impugned Arbitrators were biased.

(iv)  Ground 5

5.37In relation to Ground 5, it must be remembered that P’s case is that the Impugned Arbitral Tribunal attacked P’s lawyers by insinuation. I agree with the Impugned Arbitrator that the “insinuation” is not justified.

5.38The relevant part of the 3/8/22 Clarifications reads as follows. After referring to the 4 documents (ie the Agreed Facts, the List of Issues, the Hearing Timetable and the Dramatis Personae) required to be prepared pursuant to PO No 4, the 3/8/22 Clarifications stated:

“ 如果雙方無法達成一致，請雙方當事人各自提交各自的版本，但是仲裁庭強烈建議雙方律師秉持專業精神，盡量就上述程式性事項達成一致…”

5.39In my view, a fair-minded and informed observer, who is not unduly sensitive or suspicious, would agree with the Impugned Arbitrators that the request was made to both parties in the hope that the parties could try to reach an agreement on the procedural matters and that such request had nothing to do with the objections to the Procedural Order No. 4 raised by P.

6.Disposition

6.1For the above reasons, I dismiss the Amended Originating Summons. As to costs, D and the Impugned Arbitrators did not contest the proceedings. However, out of an abundance of caution, the order that there be no order as to costs is made on a nisi basis.

6.2I also direct, again out of an abundance of caution, that P’s solicitors do provide a copy of this judgment to D and the Impugned Arbitrators within 3 days hereof.

Mr David Fong, instructed by Messrs. Oldham, Li & Nie, for the Plaintiff

The Defendant, in person, absent