In Re Xu Peixin [2025] HKCFI 5846, the court provided a helpful guidance on how a ‘genuine intention to arbitrate’ may be demonstrated under the Re Lam Kwok Hung Guy (2023) 26 HKCFAR 119 principles.
Upon the presentation of the petition based on a guarantee governed by an arbitration clause, the debtor opposed contending that the matter should be referred to arbitration. A few months later, the debtor’s solicitors further wrote to the petitioner requesting the petitioner to agree to submit the dispute to arbitration, which led to a chain of correspondence debating who should commence the arbitration. Eventually, the debtor commenced arbitration. Nevertheless, the petitioner argued that the debtor did not have a genuine intention to arbitrate.
The court rejected the argument. It explained that what engages the principle of party autonomy is not the commencement of an arbitration by the debtor, but the parties’ agreement that any dispute should be determined by arbitration.
Whilst the most straightforward way to demonstrate a genuine intention to arbitrate is to serve a notice of arbitration, the same can be done by writing to the claimant informing him that the debt is disputed and should be referred to arbitration. In most cases the claimant will be the appropriate party to commence arbitration and the above will generally suffice to demonstrate a genuine intention to hold the claimant to the agreed dispute resolution mechanism.
The sooner the debtor makes plain his desire to arbitrate the more straightforward the matter becomes and absent the claimant demonstrating either that the grounds for disputing the debt are frivolous or an insolvency consideration that justifies presentation of a petition, the court will dismiss the petition. Service of a notice in opposition, which states that the debt is disputed and that the dispute should be arbitrated will commonly be sufficient to show a genuine intention to arbitrate if coupled with a clear and reasoned proposal that the claimant commence the arbitration process.
In the present case, the petitioner was the natural claimant. If before the petition had been issued the debtor had sent a letter requesting that the petitioner to commence an arbitration, that would have sufficed. Whilst on the facts such letter was sent a few months later which left room for arguments, the court was satisfied that a genuine intention to arbitrate has been demonstrated.
The petition was ultimately dismissed on the ground that the debtor’s estoppel by representation defence is not frivolous.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=174856&currpage=T
Jenkin Suen SC and Kaiser Leung, instructed by Howse Williams, acted for the Debtor
