Read the full judgment text of FACV 000010/1998 on BabelCite. This FACV judgment was delivered on 9 February 1999 before Chief Justice Li, Litton PJ, Ching PJ, Bokhary PJ and Mason NPJ.
Arbitration law – enforcement of Convention award – Arbitration Ordinance, Cap 341 – public policy ground under s.44(3) – natural justice and apparent bias – inspection of equipment in absence of party – contract for sale of rubber-tyre recycling equipment by Hong Kong seller to Mainland buyer – equipment failed to meet contract specifications – arbitration by CIETAC – Tribunal appointed experts at respondent seller's request – experts inspected end-user's factory accompanied by Chief Arbitrator but without notifying seller – experts reported equipment could not be modified to meet contract – seller did not raise objection to Chief Arbitrator's presence after receiving Tribunal's letter of 4 January 1996 – CIETAC award in buyer's favour – seller's application to set aside dismissed by Beijing No. 2 Intermediate Court – seller resisted enforcement in Hong Kong on basis of s.44(2)(c) (inability to present case) and s.44(3) (public policy) – whether failure to raise public policy ground in Beijing proceedings barred reliance on it in Hong Kong – held, no; party not bound to elect between supervisory and enforcement remedies, and public policy of enforcement forum is distinct from that of supervisory forum – whether seller's conduct in continuing arbitration without prompt objection justified enforcing the award – held, yes; word 'may' in s.44 and Article V confers residual discretion, and seller kept point up its sleeve contrary to principle in China Nanhai Oil – whether seller proved it was unable to present its case under s.44(2)(c) – held, no; seller had ample opportunity to comment on experts' report and made no attempt to challenge it – whether enforcement would be contrary to public policy under s.44(3) – held, no; public policy is narrow residual ground requiring violation of forum's most basic notions of morality and justice, and mere apparent bias or procedural departures the seller accepted by its conduct are insufficient – appeal allowed with costs, orders of Court of Appeal set aside and orders of Findlay J. restored so as to restore registration of award and judgment in buyer's favour.
Legal issues: Whether respondent barred from raising public policy ground by reason of Beijing proceedings · Whether respondent's conduct in the arbitration barred reliance on public policy · Whether respondent was unable to present its case under s.44(2)(c) · Whether enforcement would be contrary to public policy under s.44(3) · Whether court should exercise residual discretion to enforce the award
Outcome: Appeal allowed; the Court of Appeal's orders setting aside the grant of leave to enforce and the judgment are set aside, and the orders of Findlay J. are restored.