The High Court of Hong Kong dismissed an application by the Plaintiffs (“AT”) to set aside a Partial Award and a Final Award on Costs, reaffirming the principle of minimal curial intervention for the Court’s review of arbitral awards.
The dispute centered on a complex share purchase agreement (“SPA”) and subsequent supplemental agreements involving significant cross-border financing between AT, QC and others. The Arbitral Tribunal ruled in favour of QC.
AT primarily sought to set aside the Awards on the grounds that (1) it was unable to present its case on a PRC illegality issue in relation to the necessary approval and permit for overseas direct investment (“ODI”), and (2) the Awards are in conflict with public policy due to PRC illegality.
The Court rejected AT’s arguments.
- The Court reiterated that it is not the function of the Court to comb an award to look for errors. The Court also will not lightly interfere with the case management decisions of the Arbitral Tribunal, unless they can be shown to be a serious denial of justice.
- Even if there were any procedural irregularlity in the arbitration, the Court exercised its discretion not to set aside the Awards because the alleged irregularity did not affect the outcome of the Awards.
- On the issue of illegality and Mainland public policy, the Court held that it would not review the correctness of the Tribunal’s decision that there was no contravention of Mainland regulations. Any Mainland regulations on cross-border payments also do not apply to Hong Kong, and thus breach of the regulations (even if any) would not be contrary to the public policy of Hong Kong.
This judgment underscores the Court’s approach in ensuring the finality of arbitral awards and clarified the principles on when the Court would intervene with an arbitral tribunal’s decision in cases of alleged foreign illegality and in case management decisions.
Ms. Frances Lok SC and Mr. Adrian Lee, instructed by Grandall Zimmern Law Firm, acted for the plaintiffs in the arbitration and the defendants in the setting aside application (QC).
The full judgment of the stay of execution decision is available at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=178523&currpage=T
