Pacific China Holdings Ltd (in Liquidation) v. Grand Pacific Holdings Ltd

CACV 136/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 136 OF 2011

(ON APPEAL FROM HCCT NO. 15 OF 2010)

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.This is the Plaintiff's application for leave to appeal to the Court of Final Appeal.

2.First, on the basis that the appeal is as of right under section 22(1)(a) of the Hong Kong Court of Final Appeal Ordinance (Cap 484).

3.In Gao Haiyan & Anor v Keeneye Holdings Ltd & Anor (No 2) [2012] 1 HKC 491, this Court (differently constituted) held in relation to proceedings to enforce an arbitral award that the appeal was not as of right because it did not satisfy the immediacy requirement, as explained by the Appeal Committee in Chinachem Charitable Foundation Limited v Chan Chun Chuen & Anor (unreported, FAMV 20/2011, dated 28 October 2011) in para 31.  We also did not accept the submission that because there the respondent immediately suffered a detriment, namely, the enforceability of the arbitral award, the immediacy requirement was satisfied, because it is the normal event of litigation that the winner gains a benefit and loser suffers a detriment by the result.

4.Here, Mr Charles Manzoni, SC (for the Plaintiff) relied on WFM Motors Pty Limited v Malcolm Maydwell (unreported, CACV 148/1995, dated 29 February 1996), where this Court (also differently constituted) which regarded a judgment on the validity of the registration in Hong Kong of a foreign judgment as involving an appeal as of right.  WFM Motors was followed by this Court (also differently constituted) in Karaha Bodas Company LLC v Persusahaan Pertambangan Minydak Dan Gas Bumi Negara (unreported, CACV 121/2003, dated 18 March 2008) where the court said that we could not agree with counsel's submission that WFM Motors was plainly wrong, and:

"1.  … That being the case, I believe we are obliged to give leave and would do so. …"

5.WFM Motors has been overtaken by subsequent decisions of the Court of Final Appeal, for example, China Field Ltd v Appeal Tribunal (Buildings) (2009) 12 HKCFAR 68 and WLK v TMC (No 1) (2009) 12 HKCFAR 473. 

6.Mr Manzoni also advanced the submission that questions of great general or public importance are involved in our decision as follows:

"(1)  In what circumstances may an arbitral tribunal conduct an arbitration otherwise than in accordance with the parties' agreement?

(2)  What is the breadth of an arbitral tribunal's discretion to make case management decisions?

(3)  To what extent, and upon what legal basis, is the court entitled to question the merits of an arbitral tribunal's case management decisions?

(4)  On the facts of the case, was the administration of justice by the arbitral tribunal due and proper, and were the procedures adopted by the tribunal fair?

(5)  What is the correct test to apply when considering, for the purposes of the provisions of the UNCITRAL Model Law, whether:

(a)  a party has been unable to present its case (Article 34(2)(a)(ii));

(b)  the procedure adopted by the arbitral tribunal was not in accordance with the agreement of the parties, in circumstances where such agreement was not in conflict with a provision of the Model Law from which the parties cannot derogate (Article 34(2)(a)(iv));

(c)  a party has not been given a full opportunity to present his case (Article 18)?

and having regard to the correct tests, has the Applicant furnished proof of one or more of such matters?

(6)  What is the nature of the discretion available to a court to refuse to set aside an award in the event that a party has furnished proof of one or more of the matters set out in Article 34(2) of the Model Law?"

7.We agree with Ms Teresa Cheng, SC (for the Defendant) that the first 5 questions, though superficially general questions, are in fact wholly case and fact-specific.  Thus Question 4 asks: "On the facts of this case …"

8.And the final part of Question 5 asks "Has the applicant furnished proof" of a breach of Article 34(2)(a)?

9.Nor is the test raised in Question 5 or the nature of the discretion truly questions of great general or public importance.  Furthermore, in para 97 of our judgment we said:

"97.  … it is academic whether the Court has a discretion in the event of any violation to refuse to set aside the award. …"

10.Thus, any view expressed by us was obiter.

11.Mr Manzoni also relied on FG Hemisphere Associates LLC v Democratic Republic of the Congo (No 2) [2010] 2 HKLRD 1148, but that decision does not help because FG Hemisphere was concerned not with whether the claim was a liquidated claim but whether the order was final,

12.Mr Manzoni also suggested this case will provide the Court of Final Appeal with an important opportunity authoritatively to clarify the circumstances in which one may set aside an award under Article 34, and how any discretion to do so (or not to do so) should be exercised.  And that since the amount involved is in excess of USD 55,000,000, permitting these matters to be ventilated and adjudicated upon at the highest level would enhance Hong Kong's status as a leading arbitration jurisdiction and would add to the jurisprudence in model law jurisdiction.  These are not reasons for leave to be given by this Court.

13.For the above reasons we have refused leave to appeal with costs.

Ms Teresa Cheng, SC & Mr Adrian Lai instructed by Herbert Smith for the Defendant

Mr Charles Manzoni, SC instructed by Sidley Austin for the Plaintiff

Please refer to FAMV18/2012 for the relevant appeal(s) to the Court of Final Appeal.