Read the full judgment text of HCCT 40/2014 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 15 June 2015 before Hon Mimmie Chan J.
Arbitration — Setting Aside Award — Public Policy — Limitation Defence — Failure to Deal with Central Issue — Procedural Irregularity — Article 34 UNCITRAL Model Law — Arbitration Ordinance (Cap 341) — Scope of Public Policy Grounds — Remission to Arbitrator. A and B entered into a development and sales agreement subject to arbitration. B claimed breach by A for failure to deliver compliant products. An arbitral Award was issued in favour of B, dismissing A’s counterclaim. A sought to set aside the Award, alleging the Arbitrator failed to expressly deal with A’s defence that claims were time-barred under a contractual one-year limitation clause (Paragraph 7.5). The court held under Article 34 of the Model Law and Hong Kong case law (Hebei Import & Export Corp v Polytek Engineering Co Ltd) that the public policy ground to refuse enforcement is narrowly construed but includes cases where fundamental fairness and justice are offended. The Arbitrator’s failure to address a material defence and to state reasons therefor constituted a serious procedural irregularity resulting in denial of due process and substantial injustice. The court rejected B’s argument that the defence was implicitly rejected, holding that proportionality and clarity require an express ruling. The court ordered the Award to be remitted to the Arbitrator for reconsideration within a 90-day stay and awarded costs to A. This case underscores the need for arbitral awards to address and reason on all material issues raised, ensuring procedural fairness and enforcement consistent with notions of justice.
Legal issues: Whether the Arbitrator’s failure to deal with the Limitation Defence constitutes a ground for setting aside the Award · Whether setting aside the Award on public policy grounds is warranted · Whether the Award should be set aside outright or remitted to the Arbitrator for reconsideration
Outcome: Award set aside and remitted to the Arbitrator for reconsideration on the Limitation Defence; proceedings stayed for 90 days.
Cited by 1 case