ADR

IN
HONG KONG

Christopher To
Barrister-at-Law and Programme Director, LLM in
Arbitration and Dispute Resolution, City University ofHong Kong

and

Simon So
Barrister-at-Law

SWEET & MAXWELL THOMSON REUTERS

 i TABLE OF CONTENTS
TABLE OF COMIX!■ if

CHAPTER 3 MEDIATION 4. Early Termination of the Litigation................ $024

1. Mediation Ordinance................................................................................................ 3.001 5 023
TABLE OF CONTENTS (n) Whnt is mediation?......................................................................................... 3.002
(a) Summary judgment.................................
(b) Striking out a claim..................................... 5 02*
(b) Confidentiality in mediation.......................................................................... 3 003 (c) Default judgment......................................... 5.030
Prefact................................................................................................................................. vii (c) lire without prejudice nature of mediation.................................................. 3.007 5. Civil Appeals in Hong Kong....................... .......................... . 5.037
Table ofCases................................................................................................................... xvii 2. Structure of Mediation.............................................................................................. 3,011 (a) Reviewing own decision.................................................... 5.037
(a) Opening speech by the mediator................................................................... 3.011 (b) Court of First Instance, High Court................................ . 5.039
Table of Legislation.......................................................................................................... xliii (c) Court of Appeal, High Court............................................. 5 040
(b) Joint session..................................................................................................... 3.023
(c) Private scssion/caucus..................................................................................... 3.030 (d) Court of Final Appeal......................................................... 5.046
CHAPTER 1 THEORIES OF DISPUTE RESOLUTION (d) Rcjoint session................................................................................................. 3.037 6. Civil Justice Reform 5.049
1. Conflict Resolution............................................................................................... 1.001 (c) Signing of mediated settlement agreement.................................................. 3.039
2. “Litigotintion" — Bargaining in the Shadow of the Low................................ 1004 PART in
3. Non-Determinative Forms of Dispute Resolution............................................ 1.006
PART n ARBITRATION
DETERMINATIVE FORMS OF DISPUTE RESOLUTION
4. Determinative Forms of Dispute Resolution..................................................... 1013 CHAPTER 6 WHAT IS ARBITRATION?
5. Critical Responses to ADR.................................................................................. 1.014 CHAPTER 4 ADJUDICATION 1. An Outline of Arbitration....................... .................................... .......... 6.001
(a) Advantages of ADR........................................................................................ 1.014 1. Introduction...............................................................................................................4.001 (a) Arbitration Ordinance..................... ......................................... ......... _.. 6.003
(b) Disadvantages of ADR................................................................................... 1.016 2. Advantages of Adjudication....................................................................................4.012 (b) UNCITRAL Model Law................. ......................................... .......... . 6.005
6. Conclusion.............................................................................................................. 1021 3. Disadvantages of Adjudication.............................................................................. 4.013 2. Advantages of Arbitration......................

4. Natural Justice...........................................................................................................4.017 3. Disadvantages of Arbitration................ 6.010

PARTI
5. Jurisdiction................................................................................................................ 4.032 4. Ad hoc and Institutional Arbitration..... 6.013
NON-DETERMINATIVE FORMS OF
DISPUTE RESOLUTION 6. Qualities and Attributes of an Adjudicator............................................................4.046 5. Conclusion.............................................. .......................................... ................. 6-01?

7. Statutory Adjudication — Hong Kong..................................................................4.053

CHAPTER 2 NEGOTIATION CHAPTER 7 THE ARBITRATION AGREEMENT
1. Introduction........................................................................................................... 2.001 8. Administered Adjudication Procedures.................................................................4.064
1. Statutory Requirement for Agreement to Arbitrate.............................................7.001
2. Rules of Negotiating............................................................................................. 2.012 9. Conclusion.................................................................................................................4.O8O
2. Rules for the Construction of the Arbitration Agreement.................................. 7.005
3. Advantages of Negotiation.................................................................................. 2.014 (a) An informed bystander with all the background
CHAPTER 5 LITIGATION
4. Disadvantages of Negotiation............................................................................. 2.015 knowledge.................................................................................................... — 7.006
1. Introduction................................................................................................................5,001
(b) Presumption of consistency and coherence when different
5. Types of Negotiation............................................................................................ 2.016
2. Civil Trials in Hong Kong........................................................................................5.002 clauses deal with a similar topic................................................................ — 7.013
6. Negotiation Concepts........................................................................................... 2.020 (a) Small Claims Tribunal.................................................................................... 5.004 (c) Presumption for an intention to create a binding obligation.................— 7.015
7. Preparing for Negotiation.................................................................................... 2.022 (b) Labour Tribunal............................................................................................... 5.007 (d) Presumption of party autonomy................................................................ .... 7.016
(c) Lands Tribunal................................................................................................. 5.011 (e) Conferring natural meanings to words.......................................................... 7,019
8. Negotiation Strategies.......................................................................................... 2.026
(d) District Court................................................................................................... 5.014 (f) Presumption of no absurdity.......................................................................... 7.020
9. Barriers to Reaching a Negotiated Agreement................................................. 2.037 (g) Presumption of “one-stop" jurisdiction................................................. —. 7.024
(c) Court of First Instance, High Court.............................................................. 5.017
10. Conclusion............................................................................................................ 2.041 3. Procedures to Commence a Civil Action............................................................... 5.019 3. Injunction to Stay Court Action..............................................................................7.026
(a) Action by Writ of Summons.......................................................................... 5.020 (a) Court’s mandatory obligation to stay court action...................................... 7.026
(b) Action by way of Originating Summons..................................................... 5.023 (b) Test of primafacie or arguable case.......................................................... .. 7.029
 ilv TABLE OF CONTENTS
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til TABLE OF CONTENTS TABLE OF CONTENTS till
CHAPTER 11 THE AWARD, COSTS AND INTEREST 3. Grounds for Setting Aside and Refusing to Enforce an Award—------------ 12.017
4. Separability of the Arbitration Agreement...........................................................7.069 (d) Documents assisting the arbitral tribunal................................................... 9 035 1. Introduction............................................................ (a) Incapacity of party and invalidity of arbitration agreement........ ....... ...... 12.017
5. Challenging Jurisdiction of the Arbitral Tribunal...............................................7.076 (e) Printed case and pleadings.............. 9.038 2. Types of Award.................................... (b) Lack of notice and due process violations and infringement
11.003
(a) Statutory power of the arbitral tribunal....................................................... 7.076 4. Administrative Preparation....................................................................................9.042 (a) Partial/interim award.................... of right to a fair hearing................................................................. ................ 12.021
11.004
(b) Doctrine of kompetenz-kompetenz (competence-competence)............... 7.077 (a) Tribunal secretary.......................................................................................... 9.042 (b) Agreed award................................ (c) Outside or beyond the scope of the arbitration agreement------------------ 12.033
11.005
(b) Thmslation/interpretation............................................................................. 9.045 (d) Irregularities in the composition of the arbitral tribunal or
(c) Court’s intervention in ruling of jurisdiction............................................. 7.081 3. Form of an Award................................ 11.007 the arbitration procedure...................................................... ........ —_______12.037
(d) Duty on parties to object............................................................................... 7.084 (c) Transcript....................................................................................................... 9.047
(a) In writing....................................... 11.008 (e) Award not binding, set aside or suspended..................................................12.042
5. Discovery.................................................................................................................9.048 (b) Signature of the arbitrators..........
CHAPTER 8 THE ARBITRAL TRIBUNAL 11.009 (0 Non-arbitrability................... ..................... ................................................... 12044
(a) General principles......................................................................................... 9.048 (c) Date of award................................. 11.013 (g) Contrary to public policy............................................................................... 12046
1. Introduction .........................................................................................................8.001 (b) Relevance...................................................................................................... 9.050 (d) Place of the award......................... 11.014
(c) Arbitral tribunal’s power to order discovery...................... -..................... 9.056 4. Enforcing an Arbitral Award........................................... .................................... 12056
2. Arbitration Agreement and the Arbitral Tribunal............................................... 8.003 (c) Time limit of rendering an award 11.016
(d) IB A Rules on Taking of Evidence in International Arbitration................ 9.058 (a) New York Convention awards...................................................................... 12057
(a) Number of arbitrators) ...... 8.004 4. Substantial Requirement of an Award................................................................ 11.018 (b) Mainland awards...................................................................... ..................... 12061
(b) Qualification of arbitrators)..................................................................... 8.007 6. Witnesses.................................................................................................................9.061
(a) In accordance with law.................................................................................. 11.018 (c) Macao awards.......... ........... ........ ......—-------------- -------------------------- 12063
(a) Eliciting evidence from factual witnesses.................................................. 9.061
3. Statutory Regime for Challenging an Arbitrator................. .............................. 8.011 (b) With reasons.................................................................................................... 11.020 (d) Other awards................. ............................................ ....................................12.064
(b) Legal professional privilege....................................................... -............... 9.065
(a) Conflict of interest regime............. .......................... .................................... 8.011 Completion............. ........................ . 11.024
(c) Expert witness............................................................................................... 9.074 5. Indemnity Costs upon Unsuccessful Challenge.................. ............................. 12068
(b) Natural justice regime.................................. .......................... ........... .......... 8.024 (d) Certainty........................................................................................................... 11.034
4. Natural Justice and Arbitral Tribunal........................................... .......... ............ 8.027 CHAPTER 10 INTERIM MEASURES 11.035
.............................. ........ ............ .........................................................................................
(a) What is natural justice?.................................................... ............................ 8.027 General principles.............................................................. ........................... 11.035 Appendix 1 Sample Agreement to Mediate......... .................... 269
1. Introduction.......................................................................................................... 10.001
(b) Direct pecuniary or proprietary interests..................................................... 8.029 (b) Fees and expenses of the arbitral tribunal.................................................... 11.044 Appendix 2 Sample Notice of Arbitration_____ ______ ___________________273
2. Venue of Application 10.003
(c) Possibility of bias and apparent bias........ .......................... ........................ 8.035 (c) Common cost orders....................................................................................... 11.048
(a) Power of the arbitral tribunal 10.003 Appendix 3 Sample Procedural Order No 1............................... 278
(d) Immunity of arbitrators if not dishonest......................................... .......... 8.050 (d) The effect of sealed offer to costs ................................... .«..................... 11.055
(b) The court’s role in interim measures...........................................................10.006 Appendix 4 Sample List of Issues (Scott Schedule).......................... ...... ....... ........280
(e) Summary__________ _____ ______________ ___________________ ___ 8.052 (e) Taxation and assessment of costs.................................................................. 11.059
3. Interlocutory Injunction..................................................................................... 10.011
5. Procedure of Challenging an Arbitrator........................ ....... ......—------------- 8.055 (0 Basis for assessment of costs........................ 11.062 Appendix 5 Sample Chronology -....... 282
(a) Purpose......................................... 10.011
(a) Statutory power of the arbitral tribunal and the court.............. .—........... 8.055 (g) Adverse cost order for failure to mediate...................................... ............. 11.067 Appendix 6 Sample Dramatis Personae..................... —..................................... 283
(b) Principles enunciated in American Cyanamid............................................10.013
(b) Duty on the parties to object---- ------------------------------------- ---- ------- 8.058 6. Interest.......................................... •••••••••••••• 11.073 Appendix 7 Sample Mareva Injunction________________ —_______ __ _____ 284
4. Mareva Injunction (Freezing Order)................................................................... 10.019
6. Termination of the Mandate of Arbitrator—------- ---------------------------------- 8.063 (a) General principles.................. 11.073
(a) Purpose............................................................................................................. 10.019 Appendix 8 Sample Anton Filler Order............................... .................................. 289
(b) The applicable rate................ 11.076
(b) Ex parte application and full and frank disclosure.................................... 10.021
CHAPTER 9 THE HEARING (c) Principles................................................................................................... — 10.023 7. Correction of the Award.... ......................... .................. 11.079
1. Introduction...........................................................—------------- 9.001 (d) Third parties holding the assets of the respondent...................................... 10.030 (a) The concept offunctus officio and exceptions to it 11.079
2. Commencement of Arbitration......——----- ———----------- 9.005 (e) Ancillary disclosure order 10.031 (b) Correction of the award........................................... 11.083
(a) Statutory limitation of time............ ......... —......... ............ 9.007 5. Anton Filler Orders (Search Orders). 10.032
(b) Contractual limitation of time---------------------------------- - 9.008 Pui pose 10.032 CHAPTER 12 RECOURSE AGAINST AN AWARD
(c) Extension of contractual limitation of time.............. .......... 9.011 (b) Principles 10.033 1. Framework under the UNCITRAL Model Law...................................... 12.001
(d) Service of the notice of arbitration as the commencement (c) Execution •••••• ••••••••••••••• ••••••••••••• ••• ••••••»••••. • l 0*03^ (a) Setting aside an award................................................................. 12.004
of arbitral proceeding ........a.....«•«.*........... 9.018 (d) Discharge.......................................... ........... ..—...................-..................... 10.037 (b) Refusing to enforce an award................................................. 12.006
(e) Consolidation of disputes.......... ........... ...... —----- --------- 9.023 (c) Appealing to the Court of First Instance............................................ 12.009
6. Security for Costs..................................... ~....... ~..............................................10.039
3. Preliminary Meeting_____—.................................................................. .— 9.028 (a) Power of the arbitral tribunal to require claimant to give 2. General Principles in Enforcing and/or Refusing to Enforce an Award 12.012
(a) Preliminary issues...............................................................................-.... — 9.029 security for costs................ -.............................................. -.......................10.039
(b) List of issues (Scott Schedule).......................................................... -........ 9.031 (b) Purpose....................................................-.................................................... 10.041
(c) Trill bundling........................................................................................... 9.032 (c) General principles in granting security for costs................. 10.043
 ivtil TABLE OF CASES TABLE OF CASD

Chimbusco International Petroleum (Singapore) Pte Ltd v Eastman Chemical Ltd v Heyro Chemical Co Ltd (No 2)
Fully Best Trading Ltd [2016] 1 HKLRD 582............................... 7.027, 12.068 (2012) 3 HKLRD 307.......................... .......................................................... 10.026
TABLE OF CASES China Everbright-IHD Pacific Ltd v Elpe International (Far East) Ltd v Hewlett Packard Hong Kong Ltd
Ch’ng Pob (CACV 513/2001, [2002] HKEC 218)................ ............... .....11.076 (CACV 58/1993, (1993] HKEC 363)............................................................11.040
China Merchants Heavy Industry Co Ltd v JGC Corp Estate of Ng Chan Wah, Re (HCAP 5/2003, (2003] HKEC 317)----------------------9.053
Hone Kong [2001] 3 HKC 580........ ................................ .............. ....... ............................. 7.067 Estate of Wang Teh Huei, Re (CACV 76/2003, (2003] HKEC 545)----------------- 9.053
China Nanhai Oil Joint Service Corp Shenzhen Branch v Extramoney Ltd v Chan, Lai, Pang Sc Co (1990] 2 HKLR 268 —....... ...............10.050
A v B (1998] HKLRD (Yrbk) 542___________________________________ __ 9.053
A v R (Arbitration: Enforcement) (2009] 3 HKLRD 389_____ 12.047,12.068,11070 Gee Tai Holdings Co Ltd [1995] 2 HKLR 215______________ 12.037, 12.038
AA Cben (Asia Pacific) Consultants Ltd v Khoo EE Liam China Property Development (Holdings) Ltd v Mandecly Ltd F&D Buildings Services Engineering Co Ltd v
(HCA 4354/2003,2 June 2011)................................................. ................. 10053 (HCCT 53/2010, (2015] HKEC 523)---------------------------------- 11.085,12.016 Chevalier (E&M Contracting) Co Ltd [2001] 3 HKC 403_____________ 7.05*
Advance Finance Ltd v Pang Sze Mni Loretta (1986] HKLR 523___________ 10.025 China Property Development (Holdings) Ltd v Fai Tak Engineering Co Ltd v Sui Chong Construction Sc
Akai Holdings Ltd v Ho Wing On Christopher Mandecly Ltd (CACV 92-93/2015, (2016] HKEC 1151)_____________11.085 Engineering Co Ltd (DCCJ 305/2009, (2009] HKEC 1000)----------------- 7.003
(HCMP 1718,1720 and 1722/2009, (2009] HKEC 1585)____________ 10 028 China Smart Properties Ltd v Manson Holdings Ltd Fast-Link Express Ltd v Falcon Express Ltd
Aktieselskabet Dansk Skibsfinansiering v (HCA 13913/1997, [2002] HKEC 449)____________________________10.047 (HCA 2040/2005, (2006] HKEC 8).................... ............ .............................10.016
China Solar Power (Holdings) Ltd v ULVAC Inc Four Seas Industrial Co Ltd v Sheen Long Industries Ltd
Wbeelock Warden & Co Ltd (1994] 2 HKC 264____________________ 9.039
American International Group Inc v X Co (HCMP 1191/2015, (2015] HKEC 2559)__________________________ 12.025 (1993] 2 HKC 706___________ _____ ______ _____________________ 10.033
China State Construction Engineering Corp Guangdong Branch v Full Range Electronics Co Ltd v General-Tech Industrial Ltd
(HCCT 60/2015, (2016] HKEC 1996)________________________ ___ 11039
Madiford Ltd [1992] 1 HKC 320_________ _________________________7.038 (CACV 59/1997, (1997] HKLY 531)_______________ ______ _________9.051
Andersen v Huang Kuang Yuan (1997] HKLRD 1360______________10 043,10 044
CSSC Huangpu Wenchong Shipbuilding Co Ltd v
Arima Photovoltaic Sc Optical Corp v Flextronics Computing Sales and
Dry Bulk Services Ltd Gao Haiyan v Keeneye Holdings Ltd
Marketing (L) Ltd (CACV 194/2012, (2014] HKEC 968)_______ ____ 12.035
(HCMP 1626/2016, [2016] HKEC 2739)------ ---------------------- 10.007, 10.026 (2012] 1 HKLRD 627_______ ...7.088, 8.062, 12.046.
Aijowiggins HKK2 Ltd v X Co (HCCT 53/2015, [2016] HKEC 2472)....7.086, 8 060
Chinacast Education Corp v Chan Tze Ngon 12.048, 11052, 11070
(HCA 1062/2012, [2015] HKEC 2162)................................. .......... ........... 10.049 Gay Constructions Pty Ltd v
Bank of East Asia Ltd v Labour Buildings Ltd
Chinney Construction Co Ltd v Po Kwong Marble Factory Ltd Caledonian Techmore (Buddings) Ltd (1995] 2 HKLR 35_____________7.003
(HCMP 769/2002, (2007] HKEC 1958)_____________ ____ ___ ...5.022
(2005] 3 HKLRD 758...................................................... .................11.037, 11.057 Golden Eagle International (Group) Ltd v
Bio-Chem Technology v Rich Leaf International
Chiu Koon Ming Andy v Cheung Shun Ching Mike GR Investment Holdings Ltd [2010] 3 HKLRD 273 ................ 11.064,11.070
(HCA 476/2017, (2017] HKEC 2489)_______________________ —7.059
(HCA 2297/2014, (2015] HKEC 602)............ ..................... .......................... 7.077 Grand Pacific Holding Ltd v
Brand Farm Buxbaum LLP v Samuel-Roxenbaum Diamond Ltd (No 2)
Chok Yick Interior Design Sc Engineering Co Ltd v Pacific China Holdings Ltd (No 1) [2012] 4 HKLRD 1-----------11014,11016,
(2003] 1 HKLRD 600____________________________________ ...10.045
Fortune World Enterprises Ltd [2010] 2 HKC 360...................................... 7.028 11021,11026
Brilliant Star Investment Ltd v
Chongqing Machinery Import & Export Co Ltd v Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (No 2)
NZI International Acceptances Ltd (1989] 1 HKC 375________________5.028
Yiu Hoi (HCCT 19/2001, (2001] HKEC 1671)______ ___________ ___ 12.018 [2012] 4 HKLRD 569......................................... ............ ...............................11070
Brunswick Bowling &. Billiards Corp v Shanghai Zhonglu
Choy Po Chun v Au Wmg Lun [2012] 2 HKLRD 148____ __________________ 5.022 Grand Pacific Hotel Ltd, Re (2004] 1 HKLRD 1015______________________ 10.050
Industrial Co Ltd (2011] 1 HKLRD 707_____________12.021, 12.031, 12.032
Chu Chung Ming v Lam Wai Dan (2012] 4 HKLRD 897............................ ........... 3.006 Grandeur Electrical Co Ltd v Cheung Kee Fung
Chu Hoi Dick v Secretary for Home Affairs (No 2) (2007] 4 HKC 428............. ...3.010 Cheung Construction Co Ltd (2006] 3 HKLRD 535__________________ 7.028
CY Tsun Investment Co Ltd v Incorporated Owners of Hoi To Court
Compania Sud Americana de Vapores SA v Grandview Industries Co Ltd v Leung Yiu Kei
(HCSA 16/2003, (2004] HKEC 801)_______________________________7.028
Hin-Po International Logistics Ltd (2016) 19 HKCFAR 586............... . 10.007 (HCA 1617/2011, (2012] HKEC 1247)____________________________ 10.026
Chan Cheung Fong v Ng Wing Kwok (1988] HKC 215____________________ 5.007
Crete Maritime Corp v Emirates Shipping Line DMCEST Grant Thornton International Ltd v JBPB Sc Co
Chan Hung v Yung Kwong Chung
[2017] 5 HKLRD 345....................................................................................10.027 (HCCT 13/2011 (2013] HKEC 477)________ _____ _______________ 11034
(HCA 216 and 217/2004, (2009] HKEC 74)________________________ 9 054
Grant on Natural Resources Co Ltd v Armico Metals International Ltd
Charter View Development Ltd, Re (HCCW 45/2006, (2007] HKEC 1057)___10.053
Deak Sc Co (Far East) Ltd v NM Rothschild Sc Sons Ltd [1981] HKC 78............. 9.054 (HCCT 5/2012, [2012] HKEC 1686)______________________________11046
Charter View Holdings (BVI) Ltd v Corona Investments Ltd
Desirable International Fashions Ltd v Great Wall Pan Asia International Investment Co Ltd v
(1998] 1 HKLRD 469__________________________________________ 10.053
Chiang Shi Chau [1997] 3 HKC 170.......... ........................................... ......5.035 Cervera Holdings Ltd (HCCT 13/2016, (2016] HKEC 1236)......10.025.10.026
Chee Cheung Hing & Co Ltd v Zbong Rong International (Group) Ltd
Dongguan Harris Plastic Products Co Ltd v Chan Dai Chung Greater Beijing Region Expressways Ltd, Re
(HCA 1454/2015, (2016] HKEC 656)_____________________________ 7.066
(HCA 289/1999, [2001] HKEC 1251)........................... ...............................10.050 (2000] 2 HKLRD 776---------------------------------10.043,10.044, 10.046,10.052
Cheeroll Ltd v Tose (2003] 2 HKC 422__________________________________ 9.051
Drag ages et Travaux Public v Grupo Pacifica Incorporada v Worldwide Marine Product Ltd
Cheung Shui SoyJ" L- v Personal Representatives of
Hong Kong Chinese Insurance Co Ltd [1993] 1 HKC 617........................10.043 (CACV 217/2015, (2016] HKEC 213)___ _________________________ 10024
__________ T198IJ HKLR 585_______ ___ _________ ____ _____5.028
Chian Ker Ch^^CT^rZone Investment Ltd (1994] 2 HKC 679__ _____ 10.048
Ill TABLE OP LEGISLATION

art.25..............................................................................................................................9.003 Chapter 1 The wolf also shall dwell with the lamb, and the leopard shall He dawn
art.26.............................................................................................................................. 9.074 with the kid; and the calf and the young Hon and the fatting together;
«rt.26(2)....~................................................................................................................... 9.075 and a little child shall lead them. And the cow and the bear shall feed;
■rt.28.............................................................................................................................11.019
THEORIES OF DISPUTE RESOLUTION
their young ones shall lie down together: and the lion shall eat straw
■rt.28(l)........................................................................................................................ 11.018 like the ox. And the sucking child shall play on the hole of the
«it.28(2)........................................................................................................................ 11.018 asp, and the weaned child shall put his hand on the cockatrice' den.
art.28(3)•••••••••••••••■•••••••••••••••••••••••••••■••••••••••••■••••••••••••••••••••■•••••••••••••••••••••■••■•••••a 11.019 Para. (Isaiah 11:6-8)
•rt.29............................................................................................................................ 11.010 1. Conflict Resolution................................................................................................. 1.001
•rt.30............................................................................................................................ 11.005
•rt.31............................................................................................................... 11.007, 11.081 2. “Litigotiation” — Bargaining in the Shadow of the Law.................................. 1.004
1. Conflict Resolution
«Jt.31(l)............................................................................................. 11.008, 11.009, 11.010 3. Non-Determinative Forms of Dispute Resolution............................................. 1.006
»rt.31(2)...........................................................................................................11.020, 12.035
4. Determinative Forms of Dispute Resolution...................................................... 1.013 Conflict is omnipresent in all aspects of our lives. Natural ly, proper conflict management 1.001
■rtJl(3)...........................................................................................................11.013, 11.014
is integral to our personal, professional and emotional well-being. The common
■rl32(l)........................................................................................................................ 11.001 5. Critical Responses to ADR......................................................................................1.014 denominators of situations where conflicts emerge are independence, finding fault with
■rt.33............................................................................................................ ..11.081, 12.004 (a) Advantages of ADR......................................................................................... 1.014 each other and emotional disturbance. Conflicts can be forensically dissected into the
■rt.34................................................................................................. 12.004, 12.005, 12.032
(b) Disadvantages of ADR..................................................................................... 1.016 following six parts:
art.34(lX>X0.............................................................................................................. 12.017
■ri 34(2X«Xii)..................................................................................12.021, 12.023, 12.032 (i) Compromising public interest................................................................. 1.017
(1) Interdependency: How much do the parties need each other to act cooperatively?
•11.36(1)........................................................................................................................ 12.005 (ii) Vanishing of precedent............................................................................... 1.018
If interdependency is high, then the costs of not resolving it are also likely to
UNCITRAL Arbitration Rule* 1976 6. Conclusion.................................................................................................................1.021 be high.
■rt.40(2)........................................................................................................................ 11.035
(2) Number of interested parties: How many distinct parties have an interest
in how the conflict is resolved? As the number and size of parties increase,
there are more people to please and the difficulty of resolving the conflict
increases.
(3) Constituent representation: Do the parties represent the interests of other
people who are not personally and directly involved in the process of resolving
the conflict? Reaching an agreement that is acceptable to everyone who is
affected by how the issue is resolved, especially those who are not personally
involved, is more difficult.
(4) Negotiator's authority: If the negotiator’s authority is high, then resolution is
easier, otherwise the process will take longer and will be more difficult.
(5) Critical urgency. Is it absolutely necessary that a solution be found in the
imminently future? The greater the critical urgency, the less likely a consensual
solution.
(6) Communication channels: Same-time-same-place dialogue nearly always
produces far better solutions than lesser communication channels.

1,1 1977, Professor Kenneth Thomas (later joined by Professor Ralph H Kilmann) 1.002
developed the five modes of conflict management, which was later named after them as
die Thomas-Kilmann conflict management model. Since then, many more academics
/
0
have developed various models roughly based on what was proposed by Thomas.
/
/

/
 6 THEORIES OF DISPUTE RESOLUTION DETERMINATIVE FORMS OF DISPUTE RESOLUTION 7
4 THEORIES OF DISPUTE RESOLUTION NON-DETERMINATIVE FORMS OF DISPUTE RESOLUTION 5
distinctive phases with the completion of each phase making movement to the On the other side of the spectrum, a transformative mediation starts with a view to LOIO
The five conflict-handling modes are plotted along the dimensions of “assertiveness’1 are not two distinct processes, negotiation and litigation; there is a single process of next possible. The typical stages in this process include searching for an arena, enhance party autonomy instead of merely facilitating settlement The most prominent
and “co-cooperativeness": disputing in tbe vicinity of official tribunals that we might call LTTIGOTIATION, defining the agenda, narrowing differences, final bargaining and execution of advocates of this approach are Robert A Baruch Bush and Joseph P Folger, who identify
that is the strategic pursuit of settlement through mobilising the court process ... argument. a “transformative story” of mediation, where parties mobilise their own resources to
adjudication remains a compelling presence even when it does not occur.”1 solve their differences.1 The process is one that promotes greater confidence, self-
M Competing Collaborating 1.007 Whilst negotiation remains a procedure where parties do not have fixed pattern to follow, respect and self-reliance. In contrast, in courts, the process is predominately controlled
M
tfl When considering whether to negotiate, mediate or adjudicate a dispute, the parties’ 1.005 mediation, on the other hand, has gradually developed procedures that a mediator by professionals (lawyers). Litigation is therefore often a disempowering experience.*
z
UJ
“bargaining chips” are distributed in accordance with tbe applicable law (be it case could follow. In Hong Kong, the model for educational and accreditation purpose is
As noted by Coolger, one of the important remedies that mediation provides is to LOU
law or legislations). These “chips” determine the relative strength of the parties’ case. the “facilitative model”. The facilitative model believes that a mediator should be a
> Compromising remove the psychological brutality of the adversarial system. Mediation provides the
P Even when parties are not litigating, they are influenced by the norms established by the person independent and uninterested in the matter that the disputants are engaged upon.
e: disputants a less traumatic means of resolving conflict on top of reducing time and
litigation system, such as precedents, timetables, procedural rules and cost exposure. When a mediator encountered the situation that the disputants are unsure about a certain
tu costs.10 Mediation, both evaluative and facilitative, encourages disputants to participate,
M This is precisely the function played by mechanisms such as pre-action letters, which decision, mediators are obliged to maintain their impartiality and invite parties to seek
M to resolve with dignity and to establish trust with the mediator." Despite the differences
provides parties with an early estimation of tbe relative merits of their own case. Even their independent professional advices and come to their own conclusion. A mediator
< Avoiding Accommodating amongst the various models, mediation still aims at assisting parties to come to a
before a dispute has arisen, business entities often devote considerable resources on due should not enter the arena of discussion to push the disputants towards either direction
resolution without the need of going through lengthy and painful litigation.
diligence and compliance to prevent disputes and potential litigation from arising in the Scholars of this school of thought consider that a mediator is occupying a position
first place. In this sense, the function of the courts extends beyond deciding particular that disputants naturally look up to, and therefore, their opinion would be given undue Mediation is, however, not a panacea in resolving disputes. Whilst the Hong Kong 1.012
COOPERATIVENESS cases for particular litigants to influencing all settlements. weight Tliis would have substantially degraded parties’ autonomy and therefore defeat Government is a fervent supporter of its wider application, many academics remain
I the ultimate purpose of mediation that parties should come to their own conclusion on sceptical. Common criticism launched against the use of mediation includes both
(1) Collaborating: it produces a solution that incorporates both A’s and B’s goals. 1 their own volition.5 ideological and efficacy arguments:
In Stage 2 of Integrating, tbe goals of each party in Stage 1 are refocused into
3. Non-Determinative Forms of Dispute Resolution 1.008 Yet, the traditional facilitative model has now been under considerable challenge.
one mutually satisfying outcome. (1) Mediation is a form of disempowerment and oppression. The laxer procedures
I With the proliferation of mediation in various fields, academics and practitioners have cannot ensure the parties’ equality of arms, nor could it ensure that evidence
(2) Compromising it consists of giving in on one need in order to get another The most common form of non-determinative form of dispute resolution to be seen in 1.006
coined new tenns to describe different approaches to mediation, such as transformative, is properly scrutinised and fairly presented. Since it is based on the strong
satisfied. In Stage 2, both parties A and B have moved towards each other’s die commercial world would be “negotiation” and “mediation”. Due to information
narrative, understanding-based, transactional and evaluative mediation. ideology to seek a peaceful way out and achieve settlement, justice is often
goal but stopped at tbe earliest point of agreement asymmetry (a term used by economists), the processes of negotiation and mediation
compromised. It has been said that mediation is "not about just settlement, but
are often “messy, emotionally charged, unpredictable and characterised by stops, starts, 1.009 In some quarters, an evaluative model in which the mediator assumes a more proactive
(3) Comparing: it produces a win-lose situation. In Stage 2, A’s goals are met and ■ just about settlement”. Under the informal process, the power imbalance is
advances and retreats”.’ In a seminal article. Philips Gulliver has developed tbe classic role beyond a mere facilitator and manager has gained popularity. As the name suggests,
B's goals are not satisfied. further magnified;11
•
“processual shape of negotiation and mediation”,4 which provides a detailed account the mediator’s role includes assessing what constitutes a suitable and fair outcome.
(4) Accommodating-, it insolves giving in to tbe other party and ignoring one’s own of the parties’ behaviour and power dynamics. This model has been influential on The mediator is vested with increasing decision-making power that is akin to that of (2) The potential danger that intervening third parties impose solutions by coercion
goals. In Stage 2 of Smoothing, B puts aside his goals so that A's goals can be mediation policy development in both the West and the East Reduced to its bare bones, an adjudicator in arbitration or litigation. Mediators adopting this model assume that and manipulation; and
the model encompasses two major phases, namely, the cyclical and developmental the participants want and need to be provided with some guidance as to the appropriate
(3) The heavy dependence on the skills and qualification of the mediator may
processes: grounds for settlement — based on law, industry practice or technology — and that
(5) Avoiding-, it is staging away from or withdrawing from a conflict In Stage 2, party prejudice the fairness and efficacy of proceedings. As of now, mediation has
the mediator is qualified to give such guidance by virtue of his/her training, experience
A has not altered course, but party B has removed himself from the situation. yet to be a statutorily regulated profession.
(1) The cyclical process', the pillar of this phase involves information exchange. At and objectivity.4 Advocates for the evaluative model consider that the mediator should 1
its core is constant learning and re-evaluation of the parties' relative position, assist parties to come to a satisfactory settlement by providing professional advice that
Um That said, there is no hard and fast rule as to which strategy is to be preferred. assessed in light of the merit ofthe case, new arguments proposed, and the court’s a mediator possesses. The reason facilitative-model practitioners fail is because they are
not allowed to give advice to the disputants and the information vacuum when making
4. Determinative Forms of Dispute Resolution
decision in interlocutory applications. The position of each party will subtly
change as a result of exposure to other perspectives, arguments and persuasion. decision might possibly lead to the “buyer’s remorse”.7 Another strength of the evaluative ;
2. “LmcorunoN” — Bargaining in the Shadow of the Law Unlike non-determinative forms of dispute resolution, litigation and arbitration are 1.013
The process is reciprocal because in order to obtain much needed information model lies in its ability to properly address the emotional needs of the disputants. In
determinative forms of dispute resolution in that the tribunal would make a decision
from the other side disputants normally have to share information about their contrast, the facilitative model has put undue weight on the doctrine that emotions are |
1-004 Sodo-legal scholars have coined the term “litigotiatioo’* to capture the ways in which , for the parties in dispute. The supporters of determinative form of dispute resolution
case and perspective. Of particular importance is external information from associated with autonomous decision-making, whilst ignoring other possible emotional
the law as a shadow impacts on tbe negotiation process.1 Commenting on the American third parties entering the mix and shifting perceptions. effects that might occur during, or even after, the conclusion of the mediation.
context Galanter explained tbe term as follows: 1 a Both and S Pope. Thangrag the Quality of Conflict lotcnctioiL Tba Priaapica and Practice of Traniforaiati\«
(2) The developmental process: this is the stage where parties strive to reach a Modnboo" (2002) J Prpp [kip Ftsol U 67
“On the contemporary American legal scene tbe negotiation of disputes is not an constructive conclusion. The parties go through a succession of analytically R Both and R Folget. Th* Promut of Mfdloaan Responding to Ceqfltt through Rmponormoa md Recognition
• Leooard Risks. "McAator OncntaOcau. ScnttgiM and TocbaqucT (1994)) 2 Ahtmaerm to High Coo ofUngotioa (W^B.n. 1994)
alternative to litigation. It is only a slight exaggeration to say that it is litigation. There III. * OJ Coed get. Srmawod Mediation in Dtvorro Settlement (Lexington Bools. 1971).
I • IM E Allan Lind. “Wee*. Control, and Procedural Justice lamunvtal tod Non-bxtratool Concent is Fanmm
19S4)W(2) Journal ofUgqt
' Ellen A WaMmaa. Tbe Evalaa&vt-FacOiUtiw Debut m Mediation Applying tbe Leaf of Tbtnpenttc Jvupradcoca’ n 5,4ga«nt«"(1990) 59(5) JWmJ of Persona*t\-and SocH PsyxMogy 952-959
< 1991) 12 Manp'tnt Law Frritw 155. Both tad Folger (a 9 above)
■ tM s**fewof &cu«r TfeCwrf Cfcwr»-(!rr9)s«s) j
r. r*sfmra Nt A Cran-Calrtral Pmprcrm (. PrtM. 1979>
 10 TIIFOIWS OF DISPUTE l< KAO tin ION

I TlirOKirs OF DISPUTE RESOLUTION CONCLUSION 9

1.022 Ibis chapter aims at giving a flavour of the spectrum of different ADR mechanisms
prevailing in Hong Kong. The rest of the book is divided into three parts:
favour the certainty and consistency they had over the non-determinative form of such H9 shipping and insurance law, where many of the disputes hove been referred
dispute resolution.11 to arbitration. Beverley Mcl.achlln PC, making specific reference to the construction (1) Part I is dedicated to Non-Determinative Forms of Dispute Resolution. Chapter
industry, warns that court decisions build up a settled legal framework ngninst which 2 discusses the strengths arid shortcomings of negotiation, whilst Chapter 3
contracts enn be drawn and disputes. “The living tree finds little nourishment in such delineates the structure of mediation.
5. Critical Responses to ADR arid soil. The age-old fruits — helping people predict the probable outcomes and to
(2) Paris II and III arc dedicated to Determinative Forms of Dispute Resolution.
modify their behavior Intelligently — do not grow.’’14 Die problem is reflected in the
Part II consists of Chapter 4 which examines adjudication, whilst Chapter 3 PART I
(n) Advantages of ADR fact that a significant number of UK Supreme Court decisions nrc public law enses
concerns court litigation in Hong Kong.
(where ADR is unlikely). This gives rise to concerns n9 to the economic efficiency of
1.014 To risk oversimplifying the issue, ADR provides disputants a door to handle disputes
ADR. Trials can, through the precedential value of cases, reduce the number of future (3) Part III ranging from Chapters 6 to 12 is dedicated to arbitration, which hoi,
in a more flexible, effective and economic manner. As vividly described in Charles
lawsuits by clarifying the law. In Lubon'i words, economically spenking, adjudication over the years, developed a full body of law on its own right.
Dickens’ celebrated fiction Illeak Jfoure, litigation may not only lead to long dclnys but
is a public good that is underproduced. Litigation provides precedents that guide future
also have huge cost implications ADR helps parties to resolve the dispute in a way the
behaviour. It also plays nn equally instrumental role in developing the advocacy skills
parties preferred and in a more time- and cost-efficient manner.
of lawyers and judges, whilst facilitating accurate assessment of risks at trial.17
1.015 In general, all forms of ADR also help preserve confidentiality of the matter. Aside
Sounding a note of caution, Dnmc Hazel Genn highlights the severity of the issue in the 1.019
NON-DETERMINATIVE
from the end result, parties frequently prefer that their matter remains private and
36th FA Mann lecture:
confidential for fear of adversely affecting their reputation or, in the case of a listed
company, their shnro price. Unlike litigation in which open justico is the default
FORMS OF DISPUTE
“These are rule of law issues which concern the volue of pubic adjudication,
position, ADR provides parties with nn opportunity to resolve their disputes within
four walls.
the loss of precedent in n common Inw system, and the unknown consequences
of the regulated processes and substantive outcomes of private dispute RESOLUTION
resolution.’’11
(!>) Disadvantages of ADR
1.016 ADR hns yet to be embraced wholeheartedly in some quarters, and there has been Although there hns yet to be n systematic empiricul survey of the situation in Hong 1.020
no shortage of critical literature on this topic. For all the official rhetoric ns to the Kong, the experience in the UK raises a valid cause of concern.
desirability of ADR, litigution still pluys an indispensable role in light of the following
disadvantages of ADR.
6. Conclusion

(I) Compromising public Interest

With the advent of ADR, the idea of “naming, blaming and clniming” is now a term 1.021
1.017 Owen Fiss argued that adjudication by presenting judgment in the public domain is of art.1* The Hong Kong Government and judiciary have long been supportive of the
the medium through which core repertoire of societal norms is publicised, refurbished, development of a thriving ADR market. As the former Secretary for Justice, Mr Rimsky
debated and deliberated. Issues are detached from the attention of the general public Yuen SC, snid in n lecture:
without informed discussion when ADR and settlement are championed.14 Not only do
private law disputes often involve a public interest dimension but parties may also want j “Globalization and regional integration will constitute a strong catalyst for the
to have their reputation publicly vindicated to restore confidence to their customers and development of ADR, especially arbitration and mediation, and will also to a
investors certain extent determine the types of cases which would acquire prominence.
Coupled with the economic development in the Asia Pacific region, many
(il) Vanishing ofprecedent people predict that ADR is heading towards o golden age in the Asia Pacific
1.018 The issue of’’vanishing trial” and ’’vanishing precedent” is best illustrated by Dame region.”10
Hazel Genn’s empirical studies that indicated a 24% decline in number of proceeding*
issued in the English Queen’s Dench Division (which deals with private law disputes)
from 2006 to 2011.11 This problem is particularly acute in the commercial orena, j
* MtLichlin "Judging die ' Vuuihing Trial' in tin Conitruce on Induitry" (2011) 2 Faulhur I.** Rrtr* Jl J
” Divid I ubtn. "Stnltmtoii ud tin Eiorion of tin Public tU«lmM (1993) I) Qto U 2619
" Unci Ocnn (a IJibov*).
** Ua putt « 006-4 012 few idvmiigti ud dii*dvanl*g*i of AibiOitoo ” W 1 dinner R Abel u>d A Suit, Thi EnwgMC* »od Tnuforanttoa of Dnputei. Niraing, Miming dinning ”
- Owm Nm, "Aimoil S«fll«W(lPH)9J Talt IJournal 1073 (1910-1911) 13 Law and Sotltt)- Rrvitw 631-6)4
" Pmm Hint 0«n. "WSy dt« PrivMllitioa of Civil Juiik* !« ■ Ru!« of l.iw luuo” (16di FA Mina 1-n.lui*. Lincoln'■ RjmiVy Yuen, "DUpuli Rsolution Put, Pr*»«u ind Fuun" (Di Hu Diitnguiibed Lecture* 2013, Hang Kong Sbu*
Lna 19 Novtmbu 2012) 15-1T Vui Univertity, 10 September 201 J)
 And Abraham drew near ... Peradventure there be fifty righteous within the
Chapter 2 city: wilt thou also destroy and not spare the place for the fifty righteous that
are therein? ‘... And the Lord said, If lfind in Sodom fifty righteous within the
city, then I will spare all the place for their sokes ... And Abraham answered
NEGOTIATION and said, Behold now, ... will thou destroy all the cityfor lack offive? And he
said, If Ifind there forty andfive, I will not destroy it. And he spoke unto him
yet again, and said, Peradventure there shall befortyfound there. And he said,
Para. I will not do it for forty's sake And he said unto him ... Peradventure there
1. Introduction.............................................................................................................. 2.001 shall thirty befound there. And he said, I will not do it, ifIfind thirty there. And
he said ... Peradventure there shall be twenty found there. And he said, I will
2. Rules of Negotiating................................................................................................2.012 not destroy itfor twenty's sake. And he said... Peradventure ten shall befound
3. Advantages of Negotiation.....................................................................................2.014 there. And he said, I will not destroy itfor ten 31 sake. (Genesis 18:23-33)

4. Disadvantages of Negotiation................................................................................ 2.015

5. Types of Negotiation...............................................................................................2.016 1. Introduction
6. Negotiation Concepts..............................................................................................2.020
Collins English Dictionary1 defines negotiation as “Negotiations are formal discussions 2.001
7. Preparing for Negotiation..................................................................... 2.022 between peoples who have different aims or intentions, especially in business or politics,
8. Negotiation Strategies.............................................................................................2.026 during which they try to reach an agreement”. The key parameters of this definition boil
down to three aspects, namely, (1) formal discussions, (2) having different intentions
9. Barriers to Reaching a Negotiated Agreement.....................................................2.037 and (3) reaching agreement between the parties. During an individual's daily routine,
10. Conclusion.................................................................................................................2.041 one will have to negotiate in some way or form, such as negotiating with the fruit seller
at a market stall about the purchase of some apples or oranges. The fruit seller will list
out the prices, and the buyer will try to bargain with the fruit seller if he is willing to sell
the apples or oranges at a price that is lower than what the seller listed to the buyer. The
fruit seller may try to counter propose another price to which the buyer may still not be
convinced and, in some situations, may begin to leave the stall. This is when the fruit
seller will give the buyer a price near enough to what the buyer is willing to pay for the
apples or oranges. This strategy becomes more effective when the fruit seller is about
to close the shop. Sometimes, the fruit seller will simply sell the apples or oranges to
the buyer at the price they asked for rather than not selling them at all, to avoid having
them repackaged and stored as they may become perishable, and the fruit seller will
ultimately run a loss. Clearly, this is a form of negotiation, although it is not formal, the
parties in question have different intentions; one wants to sell at a price that is above
the bottom line in order to make a profit, whereas the other wants to buy the goods at a
price that is the best deal available. Once both parties come to a consensus in some way
or form, an agreement is reached and the transaction concludes.
The characteristics of negotiation are said to be voluntary, where negotiating parties 2.002
freely participate in the process with the view of accepting or rejecting or withdrawing
from the negotiation. Disputants may participate by themselves in the negotiations or
they may be represented by others whom they trust and have authorised to negotiate
on their behalf. Negotiations can involve bilateral or multilateral constitutions, and
disputants actively communicate with each other without the assistance of a third-party

Set hirpf //wvbVtf collinidictionary co*n/dictioojry/mflii4w%«ft>Ottio«i (19 JaJy 201IX

 18 NEGOTIATION INTRODUCTION 19
14 NEGOTIATION INTRODUCTION 17
process. Some believe that in life you cannot please everyone, the only way to make From the employee’s perspective, it seems relatively straightforward, whereas from
neutral. Although there are no prescribed rules associated with the negotiation process, is on the same wavelength as that of others who are talking about the matter; a sense of progress is for one with legitimate power to move matters forward in the interest of the an employer’s point of view, it is not that simple. If the employee had previously been
parties do sometimes formulate, at the start of the first negotiation, an agenda, definim belonging and wanting to be part of a group that influences. community at large. Of course, you are bound to make enemies and some may feel led his own boss in a previous engagement, then he will know the complications and
the scope, length of the negotiation and parties to the negotiation table, documents to be out; however, if you are bold enough you will create a new way of thinking, change issues involved in determining whether or not to enhance an employee’s remuneration
Another more obvious situation is that “how can you sell snow to Eskimos when 2.004
used m the negotiation process and whether the parties are to be bound by confidentiality one’s mindset and to an extent create a new dimension that will challenge the way we 10 the coming year. In mediation, some mediators will use the phrase “if you look
they have plenty of snow around them?" The answer is simple: be creative, “yes,
or non-disclosure arrangements. Flexibility plays an important role in the negotiation currently think and do. This to many is progress and if you play your cards right, it will 11 it from the other side’s point of view" or “if you are now in the shoes of the other
you may have plenty of snow but do you have an ice sculpture like this, if not then
process; disputants can often adopt a positional-based bargaining approach versus an be rewarding and sustainable. side what will be your suggested solution to move matters forward". The mediator
you are missing the pleasure of showing off such a sculpture to your friends when
interest-based bargaining approach in negotiating matters. Positional bargaining is i will use techniques such as reality testing, doubt creation to name a few to get the
you have a special occasion, it will surely be the centre of attention". This form of 2.007 Negotiating with an individual may be relatively easy when compared with negotiating
negotiation strategy that involves holding on to a fixed idea, or position, of what yoo parties to come to terms with the actual situation and where possible find mutually
negotiation is a form of thinking outside the box when you are standing on your with multiple stakeholders who have different take on matters. One example is that
want and arguing for it and it alone, regardless of any underlying interests, whereas agreeable solutions that meet some or part of the interest for the parties to conclude
two feet under an enormous amount of pressure with only a second to react, when of the management of an Estate, incorporated owners committee are faced with an
interest-based bargaining approach is a negotiation strategy in which parties collaborate the matter. Unlike mediation, in negotiation, the parties have to come to some kind of
someone gives you the thumbs down. Some call this person “a gift of the gab" who uphill battle whether to increase management fees for the manager who manages the
to find a “win-win" solution to their dispute. This strategy focuses on developing consensus by themselves without the mediator to assist and facilitate them in reaching
can practically sell anything. estate. Some believe that some form of justification is needed, others believe that the
mutually beneficial agreements based on the interests of the disputants. This form of an acceptable solution. If one party starts the negotiation process by suggesting viable
manager does not add value and the best would be for the manager to see whether
strategy can potentially benefit all parties to the negotiation as it produces creative Children often negotiate with their parents for a new toy. First, the child will try 2.005 solutions, then he is seen to have a weak case and the other party is bound to play up
there are synergies to consolidate resources so that the management fee remains status
and integrated solutions instead of compromising one’s position of having to split the to approach the father, who is busy attending to work issues, and comer him into the matter to suggest solutions knowing that the other party either accepts en bloc or
quo, others believe that the manager is doing a superb job and management fee should
difference with the other party. agreeing that he does not have an issue provided the mother agrees, then, this child takes matters to other dispute resolution processes. A kind of imbalance of power, by
reflect his work. Here, you have a diverse set of views, and for the incorporated owners
will try to convince the mother that the father had agreed and it is simply for the cornering the party that may genuinely want to settle the matter, of course there are
2.003 Most people believe that they can negotiate and are of the view that there is nothing to it committee to take on very resident’s views in the outcome of their decision will be a
mother to buy the new toy. A tactical move that is simply child’s play but an effective others who are simply playing the game to find out the other side’s bottom line, before
as we do it all the time. This may be true to an extent, but being an effective negotiator task in itself. Balancing everyone’s views and comments to reach an outcome in the
way of getting what you want with the minimum amount of fuss. If that does not committing to some form of resolution.
is not an easy matter, especially when one is under a lot of pressure. For example, in interest of the estate is the key, be it some residents may feel left out but, at the end of
work, then there is always the fall back step of playing up and this involves making
hostage-taking situations, the negotiator must be aware of the surrounding environment, the day, the interests of the entire estate override the interest of individual owners. If An interesting article in The Economist* stated that “In the sixth episode of the ‘The 2.009
a scene in public where the parents are too embarrassed, forcing them to give in and
the emotional conditions of the person taking a person hostage, the victim, enforcement those disgruntled residents cannot get their way, some may raise their concerns with Apprentice’, a reality-television show first broadcast in 2004, Donald Trump, as
buy the new toy or it may be the other way, the parents may tell off the child in public
agencies, friends and relatives, the media and above all the risk factors associated with the relevant government and enforcing agencies by packaging their concerns within always, fired a contestant vying for a job in his company. She was, he said, the worst
that they are not afraid of creating a scene themselves as long as the child realises that
the situation and its outcome. Another situation is where someone has an item, but | the context that members of the incorporated owners committee are in collusion with negotiator. And she failed to flight back when belittled by her teammate. The episode
he is not always going to get his way. The latter may be ideal, but as we all know we
you are asked to convince this person to buy your item, which is similar to the item be the manager and are benefiting for having given the manager what he wants. Although was entitled ‘Tit For Tat’. That same principle of reciprocity guides Mr Trump’s trade
lend to spoil our children and treasure them a lot and will go out of our way to give
already has. This may seem simple; ask any door-to-door salesman selling a product most of these complaints are groundless, some do result in investigation from the policy as president ... China believes it is responding dollar-for-dollar to American
them the best in life. The question is that if we were effective negotiators when we
like a vacuum cleaner to a person who already has a perfectly good working unit is enforcing agency; a good practice of having checks and balances whilst at the same aggression. But, America too believes it is retaliating: punishing China for trade and
were young, then what happened when we moved into adulthood, as getting our own
not as easy as you may think. Price may be an important factor but if the person gives time putting incorporated owners committee members on alert for them to adopt good investment transgressions, including the theft of American technology ... Mr Trump
way does not seem so easy any more. The answer is that the parameters and stakes
you the statement that “I already have a perfectly good working unit, and it would not governance throughout their management of the estate and its resources. The task of the view of trade reciprocity is simple. If American imposes a 2.5% tariff on China’s cars,
are entirely different and a successful outcome requires a lot of planning, effective
be environmentally friendly to dispose of such good working unit”, then the questioo incorporated owners committee is a thankless task and members are not remunerated China should levy something similar on America's. If China has been charging 25%,
execution and above all the charisma to convince the other side that you have the best
is how do you, as an effective negotiator, counteract such a statement. The obvious for their services. It makes you wonder why bother being involved, but in a way it is America’s trade representatives must have been poor negotiators who. presumably,
deal that benefits all.
answer is that you can inform this person of your company’s trade-in policy, its stance rewarding in a sense as you will have a chance of shaping the way your estate operates would not have survived past episode six of his show. Trade negotiators take a broader
on re-cycling, its policy towards the environment, its corporate social responsibility In The Times newspaper,2 the heading read “Back me or we hold an election, PM 2.006 and functions, which ultimately increases the wealth of the estate and its standing ifl view of reciprocity. Yes, countries must give and take. But what is given and taken is
ambit and above all the low payment with monthly affordable payments, so that he told rebels". This was a statement in which the newspaper stated Theresa May, the the community. political gain and pain. A government will not expose a politically sensitive industry to
need not take out a large sum of money to buy the product. If that does not work, then Prime Minister of the United Kingdom, “threatened Conservative rebels with a general fiercer foreign competition unless the deal provides commensurate political rewards.
2.008 From a personal perspective, most individuals on a yearly basis have to negotiate with ,
you can throw in a few give away items as a bonus or simply state that, if he buys the . election this summer if they defeated her plans on customs after Brexit". As most will And so a reciprocal deal may leave all sides sheltering equally sensitive, but entirely
their supervisor as to their performance in the previous year and whether there is a
product, he will have the chance of entering into a lucky draw, whereby he will stand a •mow, the Brexit1 arrangements are complicated and involve multilateral negotiations different, sectors ...” Trading nations when they negotiate, do not simply look at
both external for United Kingdom between its European partners and within the United justification for an increase in remuneration in the coming year. A no brainer, some
chance of winning fabulous gifts. However, you have to be cautious of not over doing the dollars and cents; political factors often play a significant role throughout the
Kingdom, namely. Northern Ireland, Scotland and Wales. The negotiations focus on may say, simply working hard and doing more than what you are expected, or in other
matters, as it may lead you into the area of misrepresentation and could hamper the negotiations as shown in the Brexit discussions between the United Kingdom and the
words exceeding the targeted scope of work agreed with your supervisor, is bound to
reputation of both you and your organization. The media has a tendency to jump at fflultifacet arrangements including trade, migration, financial arrangements for exiting EU and the American-China trade negotiations that are currently affecting the trading
(commonly referred to as divorce bill), rights of citizens and the border with Ireland result in your supervisor giving you that expected increase in remuneration. Actually,
the chance for reporting such incidents, as these kinds of events do make the news and markets where stocks and shares in the world markets seem to fluctuate from time
it is not that simple, your supervisor will have to take into consideration a variety of
attract the general public whether they are true or not. Most of the time, our friends ^nongst many others that arc still in the discussion stages. Every day we are hearing |° linie causing uneasiness as to what to expect next, not to mention bow this will
factors ranging from, your interpersonal skills especially your communication skills,
in the media tend to report matters as they happen and when it is a misunderstanding, i issues being raised in the media, giving us the impression that negotiating with different mipact the import and export trade in 2019 and beyond. Some commentators believe
your interaction with otheT people (group harmony, being part of the group, being
then the matter is seldom reported. This is not the fault of the media, it boils down to : beholders having different expectations and outcomes is a difficult and never-ending d*at things will sort themselves out as one nation is bound to offer an olive branch to
treasured as an important team member of the group and above all members of the
the fact that people like to read stories that are sensational or gossipy or about items die other nation, so that this predicament will not persist as everyone knows it is not
group treasure your support, advice and guidance, not to mention what your customers/
that have a day-to-day effect on their lives as it is entertaining and when others in their
**Mi4*y. II My 3011. external stakeholders think about you), company's outlook and performance, economic
community talk about it, people want to prove that they have at least a slight knowledge ii to ibbrrviaBoe for 'Bn tub cdT. reftmag *° Kngdoa’i deration a a rcfacadna oa 23 lane 2016
outlook, what other organisations are doing about remuneration, etc, to name a few. 'Aaenca Democracy'• Btmh-tn Bin Fm EtcMoge — »V iTil mi Wbo i T**- rtw Ecmcmut (14-JO My 2011) *3
of the miner and possibly drum up a conversation, thus creating a situation where one U»v» the European Uuoa (EU).
 22 NEGOTIATION PREPARING FOR NEGOTIATION 2J
20 NEGOTIATION TYPES OF NEGOTIATION 21
of the other, whereas in integrative negotiation, the disputants cooperate to achieve the 8. When the relationship between parties does not have a high priority, distributive
in the best interests of anyone to continue with this so-called “trade war” as there arc 3. Advantages of Negotiation maximum benefits by integrating their interest into the agreement, thus creating value negotiation is used. On the other hand, integrative negotiation is used when
no dear winners or losers. Nevertheless, negotiating the best deal that minimises the to those involved in the negotiation. the parties try to develop a long-term relationship with one another and have a
effect on different sectors of the economy is not easy as everyone believes their sector The benefits of negotiating far out way the disadvantages, some say that having your 2.014 very high priority."
should take priority. It is a balancing act that has consequences on a person’s political 2.017 Sampson Quain in his article “Differences between Distributive Bargaining and
enemies close is the best strategy as you are going to know their every move. Relationships
aspirations. Integrative Bargaining”,7 published on 30 June 2018, stated that:
are crucial if the business relies on a few suppliers to supply them raw materials for Distributive negotiation is best used when one has some strong advantage points and 2.019
2.010 77?# Independent newspaper,’ on 13 April 2018, published an article titled “the only manufacturing. Having a harsh relationship with your suppliers will not only affect your when one is in a good position to bargain. Contrary to this, integrative negotiation
"The primary difference between these two bargaining strategies is that is
way to end the war in Syria is negotiation with Assad — but no one wants to be seen bottom line but the consequences could also be significant especially if you are relying will be most beneficial in situations where your position is not strong but you still
distributive bargaining, you don’t lake the other party’s needs into consideration
shaking hands with the devil", which stated that “Negotiations to end the Syrian war on this supplier to finish off a manufacturing process to which a client is waiting for want to win something in the bargain. In reality, distributive and integrative negotiation
when making a deal. You are simply concerned with losing less than the other
in general, not just the side issue of chemical w eapons, should be the priority but these
are difficult and not just because of the complexity of the issues. The media is to blame
the finished product. If delivery is not possible, counter claims, reputation and business
continuity are issues that will crop up and may eventually affect your bottom line and even I party, and all your focus is on getting a better deal than the other side. In contrast,
integrative bargaining begins with the assumption that both parties need to feel
strategies are used interchangeably for maximum benefit

for presenting the civil war as a simple fight between evil (Assad) and good (anybody survival in this cut throat business environment where there is space only for winners and
as if they gave up an equal amount or that they compromised equally to complete
opposed to Assad). This demonisation makes the compromises necessary- to bring peace not for losers. Another benefit, which most businessmen will acknowledge, is the forging
a deal. Distributive bargaining is often filled with conflict, because both parties
6. Negotiation Concepts
near impossible, because nobody dares be seen shaking hands with the devil. This of alliances with suppliers to enhance the pie of business, create synergies, reduce cost, 1 maintain an intractable position in their attempt to lose less than the other side.
leaves missile strikes ns the only instrument of policy, but these will only escalate and reduce any redundant processes and procedures and where possible leverage on efficiency For one to successfully negotiate any agreement, one must need to know the following: 2.020
Integrative bargaining is typically less fraught with tension, as both sides enter the
prolong the war without changing its outcome". Negotiating a truce between warring and productivity to sharpen one’s competitive edge and enhance one’s profitability in
negotiation with the willingness to compromise to achieve a consensus.”
factions is even more complicated as it involves a manipulation of multiple issues and the long term. Another advantage is that negotiation is the most flexible form of dispute il (1) One’s best alternative to a negotiated agreement (BATNA).
factors, military instructions, complex diplomacy and peace negotiations leading to an resolution as it ensures that parties focus on their mutual needs and interests, thus creating
2.018 Surbhi S, in an article “Difference between Distributive Negotiation and Integrative (2) One’s worst alternative to a negotiated agreement (WATNA).
armistice. The factors and complications are unpredictable and in some situations it an opportunity for the parties to reach an agreement that meets their needs. Unlike
Negotiation”* dated 16 September 2017, stated eight differences as follows:
boils down to an overthrow of a country. This form of negotiation has its risks, and it is adjudicative processes, the outcome of the negotiation only binds those parties involved (3) The minimum threshold for a negotiated settlement (Reservation Price).
and above all the major advantage is that substantial costs, time and expenses could be
entirely different from negotiating a business deal.
saved if the parties attempt the negotiation process with sincerity and good faith. In saying, I “1. Distributive Negotiation connotes a negotiation technique wherein the parties (4) Flexibility of your opponent and the trade-offs they are willing to make (Zone
2.011 Having had a brief and diverse scope of how negotiation affects our lives and society, try to gain maximum value for themselves, from definite resources. Conversely, of Possible Agreement (ZOPA)).
this negotiation does have some limitations which one needs to be aware of.
this chapter focuses on some of the attributes in the negotiation of commercial Integrative Negotiation can be described as negotiation strategy which attempts
to settle the dispute, with a mutually acceptable solution. Best alternative to a negotiated agreement simply put is “What would you do if you 2.021
agreements and what principles and strategies one should be aware of when negotiating
• commercial arrangement 4. Disadvantages of Negotiation 2. Distributive Negotiation is a competitive strategy, whereas integrative
were not able to agree to a deal with your negotiation partner”, whereas WANTA is
“the worst possible outcome a party has in mind”. Under WATNA, each party considers
negotiation uses a collaborative approach.
Most advocates of negotiation believe that negotiation creates win-win solutions whereby 2.015 their losing scenario and what it looks like. Reservation price “is the least favourable
2. Rules of Negotiating parties look at matters from their underlying interests and requirements rather than their 3. Distributive Negotiation has a win-lose orientation. On the contrary, point at which one will accept a negotiated agreement”, for example, for a seller, this
stated positions. Parties to the dispute have to know their case inside out if not uncertainty integrative negotiation is based on win-win orientation. means the minimum amount they would be prepared to accept, whilst for a buyer it
2.012 In an article published in the Huffington Post on 4 December 2011,* Sophie Gold stated could happen as to one’s bargaining position. Parties cannot not be sure if their counterparts would mean the maximum that they would be prepared to pay. ZOPA is the range in
4. When the resources are limited, distributive negotiation is better. As against, the
that there are five rules of negotiation, namely: •re negotiating in good faith or whether they are simply using stalling tactics to prevent which an agreement is satisfactory to both parties involved in the negotiation process.
integrative negotiation is used when the resources are in abundance.
°oe from pursuing its claims through adjudicative means of dispute resolution. Without It is the range between each party ’s reservation values and is the overlap area that each
(1) Try not to be greedy; • third-party neutral to facilitate the process, personal and emotional issues may cloud 5. In distributive negotiation, the parties self-interest and individual profit party is willing to pay in a negotiation.
the judgment of the parties preventing them from negotiating the real underlying issues motivate the parties. Unlike, in integrative negotiation mutual interest and
(2) Everyone needs to be a winner; that concern them Another aspect in which some may feel uncomfortable is when one is gain act as a motivation for the parlies involved.
(3) Your posture has to be calm, cool and collected;
faced in a situation whereby an imbalance of power exists, as one is placed in a difficult
6. Distributive Negotiation discusses only one issue at a time, whereas multiple
7. Preparing for Negotiation
®d disadvantaged position of having to negotiate with a person who is in a stronger
(4) Know your bottom line; and issues are taken into account in an integrative negotiation.
bargaining position, giving the impression to those not involved with the negotiation that The negotiation process begins with a communication from one party to the other, 2.022
*he entire process is inequitable and does not balance the interests of all parties to the 7. The communication climate is open and constructive in an integrative wdicating a willingness to enter into negotiation to resolve the matter. This is to test
(5) Have a strategy in place. j
°egotiation. One aspect that most people do not consider is that some issues or questions I negotiation. In contrast, controlled and the selective environment is there in a tire waters, to understand whether your counterpart is interested in negotiations In
2.013 These rules seem simple and no brainer, but in reality people who negotiate tend to •re simply not amenable to negotiation as there is simply no avenue for mutual concessions distributive negotiation. *Sccrtaining whether your counterpart is willing to negotiate, you have to consider a
react differently and focus solely on their own interests and needs rather than tty to find •s parties’ differences are too far apart for any chance of an agreement. variety of factors such as:
a compromise that all can live with. I (1) Define a good outcome for you and your counterpart.
5. Types of Negotiation
' Sn httptV'raallbonDW dsen coiiL'i^aacn-bcrwwB-l HTibaave-b*rpB8Ug-!Si«|ii8\v-tariKmaf-11512 (2) Identify possible value-creation opportunities.
There are two types of negotiation processes currently in practice, namely, (1) 2.016 (21 My 2011).
(3) Understand whether your counterpart’s desire to resolve the difference is genuine.
imi (21 My 20!ty
distributive; and (2) integrative. In distributive negotiation, the disputants compete over
*h« allocation of a fixed sum of value in which a gain by one side is made at the expense
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 2* NEGOTIATION CONCLUSION 29

2.035 Under the collaborating style, negotiators are great innovators as they attempt to create Effective negotiators display a mastery of interpersonal skills, including tact, respect 2.042 Chatter 3
solutions where negotiating parties' interests and needs are blended together to form a rod communication. They are active listeners and persuade without being manipulative.
proposal that benefits all. However, negotiation is not as easy as some people think. It requires the right MEDIATION
temperament, knowledge, effective interpersonal skills, cultural awareness and above
2.036 The avoiding style is a passive and aggressive style of negotiating in which the
all, an eye for detail. For negotiation to be successful, there are 18 attributes that one
negotiator attempts to disappear from the radar screen whilst at the same time plot to needs to consider,:
find wavs to gain an advantage from one counterpart. PiUUL

(1) Thorough preparation. 1. Mediation Ordinance.............. ........ ................... -________________________ 3.001

(a) What is mediation?............ ...............................................................................3.002
9. Barriers to Reaching a Negotiated Agreement (2) Time management. (b) Confidentiality in mediation.... ............ ...................... ....................................3.003
(3) Leave one’s ego at home. (c) The without prejudice nature of mediation.........—....... .............................. 3.007
2.037 There are three main barriers to negotiation, namely:
(4) Enhance your listening skills. 2. Structure of Mediation ------ 3.011
(1) Treat the negotiation as a battle ground. (a) Opening speech by the mediator...............................................— ____ 3.011
(5) Ask core questions.
(2) Failure to ask the appropriate questions. (i) Self-introduction and parties’ introduction.................. ....... ____ 3.012
(6) Anticipate compromise.
(ii) Principles of mediation........................................................... ------ 3.015
(3) Focusing on one aspect of the negotiation, usually price.
(7) Develop trust. (iii) Structure of mediation............................................................ ------ 3.018
(8) Develop perseverance. (iv) Confidentiality and without prejudice nature of mediation ------ 3.021
2.038 Most people treat negotiation as a battle with the ultimate goal of winning, they tend
to use an aggressive style throughout the negotiation and sometimes prefer to make no (v) Ground rules................................................................... ... ____3.022
(9) Do not absorb other parties' issues.
deal as they do not trust their counterpart (b) Joint session ____ 3 023
(10) Stick to one’s principles. (i) Confidentiality.... ____3.025
2.039 Some negotiators ask a lot of questions, but these questions seldom hit the right note
Information is key, and if you ask questions that do not achieve results, it is simply a (11) Adopt ethical behaviours throughout. (ii) Time and costs.... ................. ........ ............................. . ------ 3 026
waste of time and effort. In certain situations, it can create an adverse effect on parties’ (iii) Maintain good relationship............................................ ....... ------ 3.027
(12) Know your parameters and boundaries.
future relationships as one will believe that you are not genuinely sincere in trying to (c) Private session/caucus.............. ........................................ ............ ------ 3 030
settle matters but merely wasting everyone's time in asking fruitless and meaningless (13) Understand who the mover and shaker is. (i) Best alternative to a negotiated agreement (BATNA)........ ------ 3 032
questions.
(14) Understand cultural issues. (ii) Worst alternative to a negotiated agreement (WATNA)..... ------ 3.034
2.040 Although some negotiators simply focus on one single aspect as they believe that this (iii) Option generations.................................................................. -------3.035
(15) Effective recording of the stages of the negotiation for future enhancements.
single aspect is of fundamental importance from their point of view, drilling through * (iv) Reality testing.....................................................................— -------3.036
single issue endlessly without diversification may have adverse consequences, as your (16) Rank priorities.
(d) Rejoint session ■•••■•a ••••••••••••< ----- 3.037
counterpart may assume that you are concerned with one issue only, and if you do not (17) Build Rapport. (e) Signing of mediated settlement agreement.................................. ___ 3 039
achieve what you want then the negotiation is bound to fail. With this perception, one
may find that it is pointless negotiating and will proceed to other means to attempt to (18) Framing offers.
resolve matters.
Although this list is not exhaustive, it is not an easy task in itself for one to have all 2.043
t^'ese under one’s belt, and it will take a genius to grasp every single aspect. With
10. Conclusion Pf^ce, this would be achievable in the long run.
The goal ofnegotiation is not to get everything you want. It is about how you communicate 2.044
2.041 The ability to negotiate successfully in today’s turbulent business environment cafl 10(1 cooperate with your counterpart so that both of you enter a relationship of equal
make the difference between success and failure. Adopting the right strategy is the key ^•nding. The result is a stronger, more equitable path to a successful cooperation that
to success and if you adopt the wrong strategy the consequences could be drastic and
^ders a win-win for all.
may lead to a complete failure of the negotiation from the start
 34 MEDIATION MEDIATION ORDINANCE M

3.004 One would realise that Mediation Ordinance gives a deliberately wide definition aj (3) A person may disclose a mediation communication with leave of (he
Therefore if thou bring thy gift to the altar, and there rememberest that thy to what amounts to mediation communications. It covers oral, written and any other court or tribunal under section 10—
brother hath ought against thee; leave there thy gift before the altar, and go information transmitted via whatever means. Section 2 was drafted widely not only
(a) For the purpose of enforcing or challenging a mediated senlrment
thy way; first be reconciled to thy brother, and then come and offer thy gift. to merely include information emerging in the course of the mediation, but also
agreement;
(Matthew 5:23-24) information on any other occasions which were done for the purpose of the mediation
session. The definition of mediation communications also extends coverage to everyone (b) For the purpose of establishing or disputing an allegation or complaint
who came into contact with mediation communications. As such, the parties, the of professional misconduct made against a mediator or any other
mediator or anyone who came into contact with mediation communications would be person who participated in the mediation in a professional capacity, or
1. Mediation Ordinance
included. The only two documents that were deliberately left out from the definition of
(c) For any other purpose that the court or tribunal considers justifiable
mediation communications are the agreement to mediate and the mediated settlement
The Mediation Ordinance (Cap.620) came into force on 1 January 2013. As indicated 3.001 in the circumstances of the case.
agreement.
in the Long Title, the aim of the Ordinance is to provide a regulatory framework for the
conduct of mediation. The objectives' are: 3.005 Mediation Ordinance s.8 states that: The court has on different occasions emphasised that confidentiality is a hallmark and 3.006
an integral part of mediation.2 The meaning of confidentiality is twofold. First, those
(1) to promote, encourage and facilitate the resolution of disputes by mediation; and 8. Confidentiality of mediation communications attending the mediation are forbidden to disclose information to persons not involved
in the mediation. This is sometimes known as the “insider-outsider confidentiality".
(2) to protect the confidential nature of mediation communication. (1) A person must not disclose a mediation communication except u
Second, a mediator who conducts private sessions with a party would be forbidden
provided by subsection (2) or (3).
to disclose information gathered from that private session to the other party or their
(a) What Is mediation?
(2) A person may disclose a mediation communication if— representatives. This is known as the “insider-insider confidentiality”.2
Mediation Ordinance s.4 provides a statutory definition of mediation. Essentially, 3.002
(a) The disclosure is made with the consent of—
mediation is: (c) The without prejudice nature of mediation
(i) Each of the parties to the mediation;
Mediation Ordinance s.9 expressly stipulates that unless leave is obtained from the 3.007
“a structured process comprising one or more sessions in which one or more
(ii) The mediator for the mediation or, if there is more than one, court, any material contained in a mediation communication may not be admitted as
impartial individuals, without adjudicating a dispute or any aspect of it, assist the
each of them; and evidence in any proceedings, including judicial, arbitral, administrative or disciplinary
parties to the dispute to do any or all of the following—
proceedings. The evidence is not only inadmissible, but Mediation Ordinance ss.9 and
(iii) If the mediation communication is made by a person other
(a) identify the issues in dispute; 10 further stipulate that it would not be disclosable unless with leave of the court
than a party to the mediation or a mediator — the person who
(b) explore and generate options; made the communication In Lincoln A ir Conditioning & Engineering Co Ltd v Chan Ping Fai Ricky* the plaintiff 3.008
objected to the defendant who was seeking to introduce materials as evidence without
(c) communicate with one another, (b) The content of the mediation communication is information that has
the leave of the court. Despite the fact that the Mediation Ordinance had not commenced
already been made available to the public, except for informalioc
(d) reach an agreement regarding the resolution of the whole, or part, of the v,hen the mediation communications occurred and the defence and witness statements
that is only in the public domain due to an unlawful disclosure;
dispute." containing the mediation communications were filed, the court nonetheless ordered that
(c) The content of the mediation communication is information that those materials were not admissible evidence. In allowing the plaintiff's application
(b) Confidentiality in mediation is otherwise subject to discovery in civil proceedings or to other to expunge those materials, Jeremy Poon J5 held that obtaining leave from the court
similar procedures in which the parties are required to disclose under Mediation Ordinance s.9 is a prerequisite before a party can deploy mediation
Mediation Ordinance s.8(l) offers a default general protection to all mediation 3.003
documents in their possession, custody or power; communications at a trial.* His Lordship also rejected the argument that a mediation
communications that they should remain confidential unless they fall under an exception
communication could be rendered admissible if it is required for the “fair disposal of
“Oder s.8(2) or 8(3). Mediation Ordinance s.2 provides the statutory definition of (d) There are reasonable grounds to believe that the disclosure is
the disputes” His Lordship said the following:
“mediation communication": necessary to prevent or minimize the danger of injury to a person of
of serious harm to the well-being of a child;
M... it is trite that what the parties had said during negotiations which led to a
“Mediation Communication means—
(e) The disclosure is made for research, evaluation or educational subsequent agreement is not admissible as evidence for the purpose of interpreting
(a) anything said or done; purposes without revealing, or being likely to reveal, directly
or indirectly, the identity of a person to whom the mediation I
(b) any document prepared; or T * T (Uodumm. Frmltji) [20111 1 HKLAD 314. [3H<1 (*»*«* Om Onmg oLmmWmDm (2012) «
communication relates; HKLRDI97.
(c) any information provided Sc*, for example. Nad;* Alexander. Horrf Koof Aromcfd Sworn Urdtonon Od{Cop 630) QWhi K2«w
(0 The disclosure is made for the purpose of seeking legal advice; or Ho®« Koag. 2013) pvm 1-003
for the purpose of or in the course of mediation, but does not include an agreement (HCA 527/2010. f20l3) HKEC93X
(g) The disclosure is made in accordance with a requirement imposed A* ft* leaned Pooo 1A (hen am
to mediate or a mediated settlement agreement-" by law. A E-fw-erwj Co Ltd’. Om, Flnj FA My (HCA 527/2010. [2013) KKEC *31 PJ

■ M«dutx» OrdmanceiJ
 38 MEDIATION STRUCTURE OF MEDIATION J*
34 MEDIATION STRUCTURE OF MEDIATION 37
(iil) Structure of mediation course of the mediation. One of the important roles of the mediator is to help the
the agreement itself. This is exactly what the defendants are now seeking to da (0 Self-Introduction and parties' introduction
3.018 Parties may feel uneasy or uncomfortable if they are involved in a mediation session parties understand each other’s concern. By doing so, the mediator must actively listen
They want to rely on the mediation communication to support their contention The mediator welcomes the parties in joining the mediation session by introducing 3.012 for the first time. It w ould be good practice for a mediator to outline and tell the parties to what a party is saying. Where appropriate, the mediator should tactfully rephrase
that although the Agreement made no reference to any of the plaintiff's claim and himself. The mediator should also confirm with the parties, or representatives of what they are to expect in the course of the mediation. what was said by a party to help the other party more easily understand the other’s
despite the entire agreement clause, the claims are all covered and settled. This is the parties (if the parties involved are corporate entities), that they are parties to the grievances.
mediation agreement The mediator should ensure that only parties relevant to the 3.019 The mediator should tell the parties that be will first assist the parties in setting u
dispute and included in the mediation agreement are engaged in the session. Unrelated agenda that they both feel comfortable about and prioritise accordingly. The parties The mediator should look for common grounds between the parties. The establishment 3.024
3.009 In considering whether to order disclosure or to admit evidence contained in a mediation or third-party personnel should not be involved in the mediation. The mediator may would participate in a round of negotiation known as the “joint session”, where both of common grounds enables the parties to understand that they are actually working
communication, the court or the tribunal should consider.7 politely invite parties to show their identification documents, authorisation letter or parties w ould express their concerns to each other in the presence of the mediator. When together towards the same goal. This also assists the parties in realising that they
power of attorney for verification. appropriate, the mediator would propose to conduct “private sessions” (or, otherwise, actually only differ to a limited extent Preferably, these common grounds should be
(1) whether the mediation communication may be, or has been, disclosed pursuant known as “caucus”) with each party. The private sessions allow parties to express their marked on a white board in the room so that parties may visualise the common grounds
*o 1-812); There may be occasions where a party wishes to invite related persons (namely, relatives 3.013 concerns which they do not feel comfortable to bring up in the presence of the other they share. The following are some common grounds that a mediator may find in the
or other close friends) to participate in the mediation session. Mediators should, first, party. course of the joint session.
(2) whether it is in the public interest or in the interests of the administration remind the party that mediation is a process of seeking resolution that best fits the needs
of justice for the mediation communication to be disclosed or admitted io of the parties. If a party insists that the related person should stay in the mediation 3.020 Thereafter, the mediator would invite both parties to reconvene in a “rejoint session”. (I) Confidentiality
evidence; and session, or there are genuine reasons where the party requires assistance from that Whenever appropriate, parties may try to generate possible ways to settle the dispute.
As mentioned,14 one of the advantages mediation has over litigation is that mediation 3.025
person, the mediator should seek the consent from the other party for this person’s If a feasible and mutually acceptable resolution crystallises, the mediator would then
(3) any other circumstances or matters that the court or the tribunal consider! il communications are to be confidential under the Mediation Ordinance. In many cases,
presence. assist the parties in drafting the mediated settlement agreement
relevant. parties would like to maintain their identity anonymous in the course of the dispute to
It is the duty of the mediator to inform both parties that he is an impartial person and has 3.014 avoid embarrassment or damage to reputation.
(iv) Confidentiality and without prejudice nature of mediation
3.010 The Mediation Ordinance does not provide any specific guidance as to what would no connection or interest in the dispute between the parties. The mediator should stress
3.021 Non-legally trained persons who are involved in a mediation session for the very first (U) Time and costs
amount to sufficient “public interest” or “interests of the administration of justice” that prior to the mediation session, he has not privately contacted either party, save and
time would naturally be worried whether what they said in the course of mediation
so that the court should give leave for disclosure and/or admission of a mediation except, where necessary, a preliminary meeting or telephone conversation where no Parties would understand that if the dispute could not be resolved m a relatively 3.026
might eventually go public, or be used as evidence against them should the matter
communication. The court has readily acknowledged that what matters in “public substantial matter of the dispute was discussed. expeditious way, they would be forced to input a great amount of time and costs in
not reach a settlement and have to be resolved by way of litigation or arbitration. It is
interest” is not specifically defined either in statute books or precedents.' One can fighting or defending the cause of action in court This not only leads to loss of both time
the duty of the mediator to explain, in plain language, that mediation communications
nevertheless be safe to assume that a matter would be of public interest if it affects 00 Principles of mediation and money, but also adversely interferes with their personal and business well-being
would be kept confidential and made on a without-prejudice basis.11
people at large* and is a matter of public importance.10 At the end of the day, what The mediator should emphasise to the parties the spirit and principles of mediation. 3.015
Mediation Ordinance s. 10 provides is merely a non-exhaustive list of factors that a court (iii) Maintain good relationship
Parties should understand that they have agreed to participate in the mediation session. (v) Ground rules
should take into account when considering whether to order disclosure or admission of Mediation is a dispute resolution process that parties voluntarily engage themselves in. In many cases, parties in a business relationship would be mutually relying on each 3,027
a mediation communication. It does not entail that a party may, as of right, compel a 3.022 Parties feel distressed when they have to handle disputes themselves. The emotions that
This implies that any party may opt to stop the mediation process at any time they feel other. It would be critical that parties maintain a reasonably good relationship with each
court to grant leave as long as they may prove that public interest is at stake." flow with the grievances, nonetheless, would not help parties reach a consensus and
uncomfortable. other despite the dispute. If the relationship could be mended by reaching a resolution
hence a resolution. Rather, the toxicity accompanying the grievances would only stir up that is mutually acceptable, this might even help the parties coatinuc with tbeir pre­
Under the current statutory framework, the mediator should not advise the parties on 3.016 more emotions and lead to a fruitless mediation session. It is the duty of the mediator to
existing business and amicable relationship.
2. Structure of Mediation toe matter in dispute during mediation. The mediator should be an impartial individual ensure that parties focus on the real issue of the dispute in the course of the mediation
who does not dispose the matter in favour of either party.12 This fundamental role of the and exchange ideas in a rational and civilised manner. In order to ensure a meaningful Thereafter, the mediator should endeavour to assist the parties in setting up m agenda. 3.028
mediator should be highlighted to the parties. and fruitful mediation session, it is the duty of the mediator to remind parties to respect The mediator should help the parties to formulate those issues into a statement or
(a) Opening speech by the mediator
each other in the course of the mediation. Violence, physical or verbal, or otherwise question so that it is easy to understand and put the same on a board so that the agenda
3.011 The mediation session commences by the mediator giving a brief introduction to the Hong Kong continues to adopt a facilitative model of mediation. This is to say that 3.017 could be visible to both the parties. The mediator then, finally, invites the parties to
should be avoided. The mediator may reassure the parties that he will ensure that eacfc
parties as to what they would expect in the session. Whilst there are different ways to | toe mediator, despite being a professional in some or all aspects of the dispute, is not Prioritise the agenda. It is common that a party would like to discuss the item that he
party will have the opportunity to express their thoughts and that such opportunity
give an opening speech, a mediator should aim at embracing at least all of the following allowed to give opinions on the merits of the case. The role of the mediator is to assist the
would be a fair and of equal distribution in terms of time. Proposed first. It is the duty of the mediator to ensure that the parties understand that
points in the opening speech. Pmties in addressing their concerns to the other party and explore a mutually acceptable toe priority of discussion does not matter too much as, at the end of the day, all issues
w*y of resolving the dispute. Thus, the mediator should, at this juncture, remind the
P«ties that they should seek their own legal and professional advice where appropriate.
I (b) Joint session would be discussed. The prioritisation only indicates a sequence of discussion but not
toe importance of the issue.
The mediator himself will not, due to professional duty, offer any professional advice 3.023 After giving the opening speech, the mediator would invite the parties to give their
Turn n» kSmf "jrfMtm r Sitf Fat .Hratpcptr C» US (2006) J HKC 10. Deputy Kiffc Coon ladf* AtAamy T* (•* 4*
on the dispute. first statement in the joint session. This is done by asking parties to briefly state their After setting up the agenda, the mediator should invite the parties to make representations 3,029
Umm* MiSdi la* mppart from Fsmdd, r TW Sr^tpapw* US [2001) 2 AC 127 mU UtOm
Amtn US p Unttr Grmi* CjrgmmutHm Ud [1W] 2 QB J7J
------------- ' " ----- . '[.-^1 ----------- tMK)
I concerns about the whole dispute and the matters they would like to discuss in the 00 toe issues in a structured and orderly manner. Throughout the process, the mediator
Om Hm Dk» r •Utrt'Trjm Htmt (St 7) [2007] 4 HXC 421 (JcAttcm L« 1. m L« WF fta
Mt D (U-or,> S oonJttrum [Mulct** ofhfumtntmj [I WJ fa 2JI. 240 rS* Thoe*i J. w^tryytS mF**
Amm US r Ur*mn, tf^mtftr nmt* Food «WFmuS A,*mn [2009] fKIJl IS
1 - s«« 003-3 010 for
 40 MEDIATION STRUCTURE OF MEDIATION 41

should take the opportunity to sec and reveal what the true underlying needs of the costs of the other party. This would mean that the party would end up getting nothing
parties ore. It would be common that parlies would frequently indicate that certain and, at the same time, suffering from further financial losses.
matters must be achieved before they arc willing to make any compromises. The
mediator should help the parties to sublimate the mediation discussion from positional (Ill) Option generations
bargaining to a discussion of the underlying concerns and needs of the parties. The mediator should endeavour to help the parties open up different options for settling 3.035
the dispute. To start with, the mediator should help pull the parties away from mere
(c) Private session/caucus positional bargaining and help them understand what their underlying needs are. By PART II
3.030 Whenever the parties reach a stalemate nnd no progress is demonstrated, or a party doing so, parties would start to think of alternative ways to settle the matter instead of
indicates that he feels uncomfortable in disclosing a particular matter to the other party, merely focusing on how to obtain remedies in monetary form.
the mediator may consider progressing the mediation session to the private session (or
caucus). The private session is where the mediator would meet each party individually (Iv) Reality testing
A point worth noting is that confidentiality applies to the communications generated When seeking liquidated damages, it is frequent for parties to demand a lump sum 3.036
between the mediator and the party that he is meeting privately. The mediator is under that might actually far exceed their actual loss. The mediator should try to assist the
a duty not to disclose the information he has obtained in one caucus session to the other
party in the other caucus session.”
parties in understanding what components this lump sum actually represents. Then, the
mediator should try to let the party reflect whether that lump sum is a truly reasonable
DETERMINATIVE FORMS OF
sum of money. On the other hand, parlies may sometimes be eager to propose different
3.031 Given the private nature of mediation, the mediator would have more opportunities to
deal with the concerns and needs of a party in a more in-depth fashion. Common skills
options aiming to settle the dispute as soon as possible. Again, it is the duty of the DISPUTE RESOLUTION
mediator to reality test the proposals and ensure that they are feasible.
that a mediator would use in the course of private sessions are as follows.
(d) Rejoint session
(I) Best alternative to a negotiated agreement (BATNA)
3.032 Best alternative to a negotiated agreement is the best outcome that a party would expect As stated, it is the duty of the mediator to keep communications that is heard from a 3.037
to get if they could not settle with the other party and come to a resolution after the party in a private session confidential and not to disclose it to the other party. In the
mediation session. In many, if not most situations, the party would then have to proceed rejoint session, the mediator should encourage the parties to exchange thoughts and
and resolve their dispute by way of litigation. The mediator should endeavour to guide propose resolutions to each other.
the party to consider the best outcomes that they may obtain from litigation, presuming In the course of option generation, the mediator should bear in mind that the proposal 3.038
that they succeeded in litigation. They should understand that the court might not grant must be feasible and practicable. Where possible, the mediator should write on the
the amount that they are claiming. They should also understand that there would be board proposals made by the parties so that they may visualise and reflect on them and
costs and time implications in the preparation of litigation. They should also understand ensure they are actually feasible and enforceable.
that upon taxation, it would be highly likely that they may not be able to recover all the
costs from the other party even if they win every issue and interlocutory applications. (e) Signing of mediated settlement agreement
Damages to reputation and the previously amicable relationship between the parties are
also not reparable even if litigation is successful. Like any other ordinary contract, a mediated settlement agreement should satisfy the 3.039
basic criteria of a commercial contract. It would be open for the mediator to choose
3.033 Since Hong Kong adopts a facilitative model, a mediator should guide the party to whether he would assist the parties in drafting the mediated settlement agreement or
consider these aspects instead of giving legal advice on these matters directly. The leave the matter to the legal representatives of the parties. In any event, the mediator
mediator should encourage parties to obtain legal and other professional advice for should encourage the parties to seek legal and professional advice before signing the
these issues.(II) mediated settlement agreement.

(II) Worst alternative to a negotiated agreement (WATNA)

3.034 As explained in BATNA, the alternative path of proceeding with the dispute if mediation
fails would likely be litigation. The mediator should also guide the party to consider
what would be the likely outcome if the court eventually ruled against them. Not only
would the party fail to receive any remedy, but the party would also be liable to pay the

" Tl»t \mm6m Inwdar confident) abfy para J 006

 So give Your servant an understendmg heart toJudge Your people to discern
Chamtr 4 between good end evil For who is able to judge this great people of Toms?
(J Kings 3:9)

ADJUDICATION
1. Introduction

PaXA. Adjudication is a relatively simple, straightforward and effective method of resolving 4JI]
1. Introduction-------------------------------------------------------------------------------------- 4.001 disputes of a commercial nature. It is a summary determinative form of dispute
2. Advantages of Adjudication__________________________________________ 4.012 resolution which does not arrive at a final and binding decision. In its general sense, it
refers to the process by which a neutral third party decides the case before him based
3. Disadvantages ofAdjudication________________________________________ 4.013 on the parties' submissions usually on a “documents-only" format.
4. Natural Justice------------------------------------------------------------- 4.017 Derek Simmonds1 describes adjudications as: 4JM2
5. Jurisdiction__________________ 4.032
a process whereby when a dispute between contracting parties arises, a
6. Qualities and Attributes of an Adjudicator_______________________________ 4.046 neutral — that is basically, a person who has no connection with either side — is
7. Statutory Adjudication — Hong Kong__________________________________ 4.053 engaged to examine the arguments of die parties and to decide the dispute-.

I. Administered Adjudication Procedures_________________________________ 4.064 Under the proposed Security of Payment Legislation (SOPL) for the Hong Kong 4.003
9- Conclusion ......................................... 4.080 construction industry, the Government stated that Tor SOPL to be successful it is very
important that each party to a contract has the right to force resolution of disputes
quickly and cost effectively. Adjudication is a process where a third party adjudicator
makes a binding decision without the delays and formality of court or arbitration.
Adjudication changes the dynamic between claiming parties and paying parties. Pay ers
know that action can be rapidly taken against them if they do not act reasonably ...
Adjudication experience overseas is that parties often accept adjudicators’ decisions as
finally determining disputes and they are not taken further -3
In CIB Properties Lid v Birse Construction Ltd,* Judge Toulmin stated in [T|—[9] that 4.004
adjudication is relatively inexpensive:

The history of the events leading up to the passing of the Act was set out by May
U in Pegram Shopfifters v WeijI (UK) Ltd (2003) 91 CLR 173. It is clear that
Parliament has introduced an intervening stage in construction disputes winch
enables the parties to achieve a temporary solution in advance of the full process
of litigation or arbitration.
The purpose of the litigation was described by Lord Ackner in the debate in the
House of Lords (see Hansard HL Vol 571 cols 989-990):

‘Adjudication is a highly satisfactory process. It comes under the rubric of

‘pay now argue later’ which is a sensible way of dealing expeditiously sod

’ ^^anooik- Z*won-A4m*c*U*t A Procfteai Gtttjt{}oka W3«y —d Sot, 200i\

PW5JI W1A 2252

 SO ADJUDICATION DISADVANTAGES OF ADJUDICATION SI
a ADJUDICATION INTRODUCTION 49

2. Advantages of Adjudication Under a statutory or institutionalised adjudication process, the referrer of adjudication 4.014
relatively inexpensively with disputes which might hold up completion of subject matter in dispute. The adjudicator hears the claims of the disputants and makes bas the element of surprise as he can have sufficient time to prepare his case, gather
important contracts.’ i decision based on the claims. 4.012 Adjudication has many advantages, and perhaps the foremost of these has to bt supporting documentation, plan his strategy and then swiftly file the “Notice of
There is no doubt that the procedure is being used in disputes which are to be Adjudications are commonly used in construction-related disputes, and some have 4.009 the efficiency of the process as it is designed to ensure the smooth running of any Adjudication” catching the responding party off guard, as the respondent will only have
resolved long after the contract which is the subject matter of the dispute, ha* agreement under which a dispute arises and to enable the dispute to be quickly and a limited amount of time to respond to the refener’s claims. The respondent’s abilities
described it as a “pay now, argue latter” mechanism, which seeks to maintain cash
come to an end. It has come to be used, as in this case, as a form of interne efficiently resolved. Disputants are free to choose the characteristics and attributes of to address the assertions made by the referrer are greatly hampered due to the strict time
flow during construction projects by providing a cost-effective and speedy means of
confrontational litigation which can be very costly. I was told that CIB’s costs of the adjudicator, who tends to be an expert in the subject matter in question and has frames. This is an enormous tactical advantage from the referrer’* point of view.
determining disputes on a binding, but not final basis.
the two adjudications amounted to £973,732.41 and Birse’s costs to £1,161,341.70, the requisite legal qualifications to understand legal theories and concepts. In some Although adjudication has many advantages, some people are of the view that the time 4.015
Adjudication was first given statutory effect in F.ngland and Wales in 1996® as a 4.010 instances, the adjudicator will act inquisitorially by taking upon himself to investigate
in each case excluding VAT. To this must be added the Adjudicator’s costs in the constraints can sometimes be seen as a form of rough justice whereby the responding
result of a comprehensive review by Sir Michael Latham in 1994 in the final report, matters with the view of coming to a decision, which he believes to be fair and just. Tbe
two adjudications. The Adjudicator’s costs in the second adjudication amounted to party may only have a relatively short period of time (two to four weeks to prepare a
“Construction the Team”7 (the I^tham Report) in which there were growing concerns at format of the court system is dispensed with, as there arc rarely lengthy oral arguments
over £150,000. This could not be described as inexpensive.” defence to the claim brought against them). Under the concept of natural justice, some
the proliferation of standard forms of contracts being used in the construction industry and one docs not have to follow exactly the rules of evidence in terms of witness view that the opportunity to be heard may not be adequate. However, under the United
and the problems associated with them. The Latham Report states that one should “try to examination. The majority of decisions rendered by adjudicators are accepted by the
4.005 In Jacobs UK Ltd v Skanska Construction UK Ltd* O’FarTell J commented on the Kingdom’s Housing Grants Construction and Regeneration Act 1996 s.108(2)-108(4X
define what a modem construction contract ought to contain"* and lists 13 requirements disputants and only rarely are matters taken to arbitration or the courts. Compared to
essence of the statutory regime of adjudication and stated in [26] that: there are minimum requirements for an adjudication procedure to safeguard the essence
for the “most effective form of contract in modem conditions”,* including means to oilier formal determinative processes, it is relatively less expensive and less formal in of the process and to ensure that natural justice principles are adhered to:
resolve disputes in Point 7 “Taking all reasonable steps to avoid changes to pre-planned terms of procedures. Disputants can be assured that matters discussed or raised in tbe
‘The adjudication procedure envisaged by the 1996 Act and the Scheme is i
works information. But, where variations do occur, they should be priced in advance, process are private, thus protecting the reputation of the parlies, and that the written
rough and ready process. The referring party has a clear advantage in selecting (2) The contract shall—
with provision for independent adjudication if agreement cannot be reached” and Point decision also provides them, with clarity and certainty, the adjudicator’s reasons so as
the timing and scope of the dispute. The timetable is veiy tight, regardless of the
13 “While taking all possible steps to avoid conflict on site, providing for speedy to understand how he arrived at his decision. (a) enable a party to give notice at any time of his intention to refer a dispute
size and complexity of the dispute. Provided that they follow the rules of natural
dispute resolution if any conflict arises by a pre-determined impartial adjudicator/ to adjudication;
justice, adjudicators have wide powers to determine the procedure and evidence
referee/expert”.
considered to reach their decisions. The inherent unfairness in the adjudication (b) provide a timetable with the object of securing the appointment of the
process is justified by the advantage of speed and efficiency in obtaining a decision Adjudications can generally be classified into three categories, namely, “consensual” 4.011 3. Disadvantages of Adjudication adjudicator and referral of the dispute to him within 7 days of such notice;
and balanced by the temporary effect of any decision.” adjudications, “contractual” adjudications and “statutory” adjudications. During
4.013 The adjudicator cannot go beyond his jurisdictional scope, unless the relevant rules/ (c) require the adjudicator to reach a decision within 28 days of referral or such
the 1980-1990s, adjudication was not used commonly within Hong Kong. With the
laws allow the adjudicator to rule on his own jurisdiction (Hong Kong International longer period as is agreed by the parties after the dispute has been referred
4.006 Some have classified it as a “rough and ready" form of dispute resolution that render* development of the airport core programme projects in the 1990s, adjudication became
a swift decision of a temporarily binding nature, unless and until the decision is a mandatory process as stipulated in various contractual documentations. Although Arbitration Centre (HKIAC) Rules do provide for the adjudicator to rule on his own (d) allow the adjudicator to extend the period of 28 days by up to 14 days,
overturned in arbitration or litigation. However, if the parties have expressly agreed to the number of adjudications taking place during that period was relatively few, four jurisdiction), and must observe what is stipulated within the agreement, failing which with the consent of the party by whom the dispute was referred;
adopt adjudication on a contractual basis, then decisions rendered by adjudicators are construction disputes were resolved in two adjudications with no further steps taken to he would have acted ultra vires, thus resulting in the decision being unenforceable.
Unless there is statutory underpinning that the disputants are cooperative throughout (e) impose a duty on the adjudicator to act impartially, and
contractually binding on the parties even if the jurisdiction in question has not adopted challenge the adjudicator’s decisions. One other adjudication was conducted in the later
a compulsory/statutory form of adjudication. part of 2009 in another context, thus giving one the impression that the process was the process, complications occur when one of the disputants does not adhere (f) enable the adjudicator to take the initiative in ascertaining the facts and
effective. Since then, there has been a steady growth of disputants adopting some form to the directions/orders of the adjudicator. In such case, the powers vested in tbe the law.
4.007 Lord Malcolm in Pihi UK Ltd v Ram hoil UK LttP stated in [23] that “An adjudicator’* adjudicator in the agreement or statutory regime are rather limited in nature, hence
of adjudication with consensual and contractual adjudications being commonly used,
award is not expected to demonstrate the same quality of reasoning as that of a judge. it will be extremely difficult to compel the uncooperative disputant to adhere to such (3) The contract shall provide that the decision of the adjudicator is binding until
and parties tend to expressly agree to adopt such provisions within their agreements.
If challenged it should not be subjected to an overly analytical or critical scrutiny”. Tbe directions. As mentioned previously, adjudication decisions are interim in nature and the dispute is finally determined by legal proceedings, by arbitration (if the
Whereas for statutory adjudication, Hong Kong is currently engaged in the process of
Judge further went on in [35] and stated that “... The purpose of an adjudication is to do not always lead to a final settlement of the dispute in question and as such partie* contract provides for arbitration or the parties otherwise agree to arbitration)
enacting a security of payment legislation for the construction industry with adjudication
provide a swift yet provisional decision. An award can be opened up and reviewed at * do have the right to refer the same matter to be heard afresh in either arbitration or or by agreement.
M the interim means of resolving disputes until the disputes are finally determined by
later date. Frequently the courts have stressed that, in all but rare and exceptional cases, litigation proceedings, which may on occasions lead to uncertainty and inconsistency
•greement or arbitration or legal proceedings. At the time of writing this book, the The parties may agree to accept the decision of the adjudicator as finally
complaints as to the alleged invalidity of an adjudicator’s award should not lead to > of matters determined. Another aspect is that even if the decision rendered by the
debate about the draft legislation was ongoing and it was anticipated that legislation determining the dispute.
delay in its enforcement". adjudicator is fundamentally wrong, the disgruntled disputant still has to honour the
VVM be in place in the second half of 2019.
decision until the matter is referred to arbitration or litigation. Tliis in effect may (4) The contract shall also provide that the adjudicator is not liable for anything
4.008 Adjudications are usually conducted by a sole adjudicator either appointed jointly by
create serious cash flow problems for the disgruntled disputant. Given the short tim* done or omitted in the discharge or purported discharge of his functions as
the disputants or by a designated appointing authority in accordance with a set of rule*
frame for the adjudicator to make a determination, there is simply no opportunity f<* adjudicator unless the act or omission is in badfaith, and that any employee
and procedures in line with the terms and conditions of the contract and the applicable
lawyers to test the evidence and assertions so as to ensure that the case is credible- or agent of the adjudicator is similarly protected from liability.10 (Emphasis
law. The adjudicator is an independent third party, who usually is an expert in the
) Hoatifl, OrMill Coortrucooo «o4 Rn«*r»Qoo Art 1996 In terms of recoverable costs, such as legal, expert and management costs, these art added.)
TU Latham Report, httpy/coo*traaiii|*xc«U(nc« oriulA*p-coofau/uploidi/2014/10/Coaitnirtiiig.(h»-tean)• Tbo-
, l4«h*ja-R*port pdf (12 July 2011).
seldom recoverable, as it is the norm for disputants to absorb such costs as part of the
* [2017) BUI sis , Ud‘MR*port.p».jn.plJ. legal process. kBp7/wwwieg}il«>oa g0vniAikpt»/1996/33/fertioii/]OI(13 July 2011)
* f20l2|CSOH t>9 L«k«ni Report, pata.5.11. p J7.
 54 ADJUDICATION NATURAL JUSTICE 55
NATURAL JUSTICE 53
provided to International Elements (referral in the adjudication) before the time wh* circumstances would lead a fair-minded and informed observer to conr.lndr
PI 4.020 the payment claim was issued. that there was a real possibility, or a real danger, the two being the same, that
the tribunal was biased.’
4.023 Kannan Ramesh JC held that notwithstanding the literal interpretation of tbe Buildup
“FcOowmg tbe decajom oftheTCC m Discdn Project Services Ltd * Opecprime
and Construction Industry Security of Payment Act s. 15<3)(b), Hyundai could not rely He went on to say that ‘the material circumstances will include any explanation
Ltd (So 2) [2001] BLR 2*7 cod Bdfowr Beatty Construction Ltd v London Borough
on reasons for non-payment which were provided before the issuance of the paymeu given by tbe judge under review as to his knowledge or appreciation of those
ofLcmbeth [2002] EWHC 597 (TCC), «ticfa confirmed that, within tbe particular claim. circumstances. Where that explanation is accepted by tbe applicant for review *
cocssai^ts of adjudication. the adjudicator was obliged to follow the rules of natural can be treated as accurate. Where it is not accepted, h becomes one further matter to
justice. those seeking to avoid the consequences of an adju&cator’s decision began 4.024 In Systech International Ltd v PC Harrington Contractors Ltd" the Court was asked
be considered from tbe viewpoint of the fair-minded observer The court does not
ao regard an alleged breach of those rales as a more protective method of challenge whether tbe adjudicator could recover his fees where his decision had been held to be
have to rule whether the explanation should be accepted or rejected Rather it has
However, foQowag (be decision of tbe Court of Appeal m AMEC Capital Projects unenforceable for failing to comply with tbe rules of natural justice. Akenhead P* stated
Ltd r Whaefrurs City Estates Ltd [2004] EWCA (Crv) 1418, it became apparent « in [44J that:
to decide whether or not the fair-minded observer would consider that there was a
real danger of bias notwithstanding the explanation advanced’ This approach was
too was of HTmtrd practical scope. As Chadwick U pet it in subsequently approved by die House of Lords in Porter v Magill [2002] AC 357
i v Dcvonport Royal Dockyard [2006] BLR 15, summarizing Tn construction contracts, as in this case, it is difficult wholly to avoid consideration!
save dial Lord Hope deleted die words ‘or a real danger* and focused simply on
i types of challenge to an adjudicator’s i
‘h is only too easy in a complex case for a party who is dissatisfied with
ll of policy. Adjudicators under construction contracts are effectively performing i
statutory’ role, albeit that in many cases tbe parties will have agreed terms whack
whether or not there was a real possibility that the tribunal was bias.”

satisfy Section 108 of the HGCRA so that they will be performing tbe role whkk
tbe decision of an adjudicator to comb through die adjudicator’s reasons and Conlson J provided a summary of case law on the subject of apparent bias and came to 4^27
die parties have actually agreed be or she should perform. Parliament has tha
the conclusion on tbe basis that a fair-minded observ er would consider that there was
identify points upon winch to present a challenge under tbe labels ‘excess of
jurisdiction’ or ‘breach of natural justice’ ... In short, in tbe overwhelming I procured by legislation that there is to be an available adjudication procedure and,
subject to specific terms being agreed otherwise, an adjudicator who undertakes (be
a real possibility of tbe adjudicator being biased and declined to enforce the decision.
majority of cases, (be proper coarse for die party who is unsuccessful in an role of adjudicator is not merely being employed to produce a decision but in broad Lobo v Corich" concerned an adjudication commenced against the defendant builder 4.028
adjudication under (be scheme must be to pay die amount that be has been terms to put into effect Parliament's intentions. One should therefore be somewhat Mr Corich. The claimant, Mr Lobo, had terminated tbe defendant’s employment due
ordered to pay- by tbe adjudicator If he does not accept die adjudicator's slower to infer that what parties and adjudicators intended in their unexceptionable to breach of contract and claimed monies from him for the cost of completion and
decmoc is correct, whether on tbe facts or in lawr, be can take legal or worded contracts was something which excluded payment in circumstances u rectification. The contract was a JCT Intermediate Building Contract Revision 2 2009,
adjuration proceedings in order to establish the true position to seek to which the adjudicator has done his or her honest best in performing his or her rok signed by both the parties. The defendant did not pay, as a result tbe claimant referred
challenge the adjudicator*s decision on the ground that be has exceeded his as an adjudicator, even if ultimately the decision is unenforceable. The position the matter to adjudication. The defendant did not participate in the adjudication, and
jaisdktioa or breached the rules of natural justice (save in tbe plainest cases) might well be different if there was to be any suggestion of dishonesty, fraud or bad file adjudicator found in favour of tbe claimant. Once again the defendant did not pay,
is likely to lead to a substantial waste of time and expense ...*** faith on the part of the adjudicator in any given case, albeit no one has suggested md the claimant proceeded to instigate enforcement proceedings against tbe defendant
here that the Adjudicator’s behaviour begins to approach this.’* to enforce the adjudicator’s decision. Tbe defendant pul forward its stance that the
h Hywtdai Engineering end Construction Co Ltd v bterruxional Elements Pte Ltd" 4.021 adjudicator’s decision breached the principles of natural justice in that tbe procedures
^ Singapore High Court had to consider tbe interpretation of the Building and 4.025 Tbe judge found that even if tbe adjudicator was found to have breached tbe rules adopted were unfair, given that the defendant was absent throughout and was unable
Co-action Industry Security of Payment Act (Cap30B, 2006 Rev Ed) s. 15(3Xb) in of natural justice, unless and until there has been a total failure of consideration or to present its case. Tbe Court was faced with tbe determination whether the defendant
he caaecx of a supply contract. Section 15( 3 Xb) provides that bad faith on the part of tbe adjudicator, then tbe adjudicator should be entitled to his *as aware of the adjudication proceedings and/or tbe subsequent enforcement/charging
payment in accordance with his terms and conditions of appointment wder proceedings. Smart-Smith J staled in [49] that:
Tbe respondent shall not mrimlr in tbe adjudication response, and the adjudicator
shad not consider, any reason for withholding any amount, including but not 4-026 In Paice v Harding" it relates to a series of ongoing disputes between the parties
"Should the Adjudication Decision and/or the Judgment of Jefford J and or the
failed to any cross-claim, counterclaim and set-off, unless— associated with the determination of a termination account The court was concerned
Charging Order be Set Aside?
with whether unilateral conversations took place that were not disclosed. Coulsoo 1
(a) where tbe adjudication relates to a construction contract, the reason was I staled in [17] that In die light of my findings as set out above, it cannot be suggested that there has
mchaVd in the relevant payment response provided by tbe respondent to been any breach of natural justice or procedural unfairness towards the Defendant.
the rlarmier; or Tbe test for apparent bias was set out by Lord Phillips at paragraph 85 ofhisjudgmert Even if I had found that his failure to pick up the relevant emails or documents
fb) where (he adjudfc-ation relates to a supply contract, tbe reason was provided
by tbe respondent to (be chi—I on or before (he relevant due date."
I in Re Medicaments and Relcted Gasses ofGoods (No 2) [2001] 1 WLR 700: *as tbe result of an unconscious failing I would have rejected a submission that
his lack of knowledge of tbe adjudication and tbe Claimant’s action justified
*... Tbe court must first ascertain all tbe circumstances which have a bearinf
setting aside either the adjudicator’s decision or the summary judgment entered
on the suggestion that (be judge was biased. It must then ask whether those
frespoodrat ■ (he adjudication) argued (hat (he adjudicator had breached the 4.022 by Jefford J or the charging order he would have only himself to blame for
to cormdrr reasons for withholding payment (hat were I * pSJTJ&wL* »0I3
such a protracted, pervasive, serious and inexplicable failure to behave with the

9 (2015) BL* 343. ■ 1(4 Caa La 44

II
 58 ADJUDICATION JURISDICTION 59
5* ADJUDICATION JURISDICTION 57
(3) Where an adjudicator has acted in excess of his jurisdiction or in seriouj Their Lordships further stated in [87] that: 4.036
prudence of a normally intelligent and educated businessman. The central tend of breach of the rules of natural justice with which the case of Balfour breach of the rules of natural justice, the court will not enforce his decision
of the Defendant’s submission — that he has had no chance to address the issuei Beatty Construction Company Ltd v Camden Borough of Lambeth was see Discain, Balfour Beatty and Pegram Shopfitters. “In short, in the overwhelming majority of cases, the proper course for the party
in dispute — is rejected on the facts. Equally, although the suggestion was barely concerned comes into play. It follows that, if neither party has argued a who is unsuccessful in an adjudication under the scheme must be to pay the
pursued in closing submissions, 1 reject any suggestion that the Claimant has particular point and the other party does not come back on the point, there (4) Judges must be astute to examine technical defences with a degree of
amount that he has been ordered to pay by the adjudicator. If he does not accept
behaved in any way that could be described as underhand or meriting criticism. 1 is no breach of the rules of natural justice in relation thereto.’” scepticism consonant with the policy of the 1996 Act Errors of law, fact or
the adjudicator’s decision as correct (whether on the facts or in law), he can take
reject the submission that the Claimant was under some form of duty to contact procedure by an adjudicator must be examined critically before the Court
legal or arbitration proceedings in order to establish the true position. To seek
the Defendant to find out if he was aware of the proceedings. No such duty exisb Natural justice plays an important role in adjudications. The need to balance the 4.031 accepts that such errors constitute excess of jurisdiction or serious breaches
to challenge the adjudicator’s decision on the ground that he has exceeded his
in circumstances such as the present, though a Claimant who does not take further of the rules of natural justice: see Pegram Shopfitters and Amec”
expeditious process with the need to afford one an opportunity to be heard and to jurisdiction or breached the rules of natural justice (save in the plainest cases) is
steps is suggested may expose himself or herself to a later application to set aside respond to the case against him as well as to have an impartial adjudicator to act fairly likely to lead to a substantial waste of time and expense — as, we suspect, the
on grounds that may be good, bad or indifferent. Here they are bad.” in all the circumstances are crucial in reaching one’s decision. If the disputants have 4.035 This case arises from a project involving the fit-out works of a submarine dockyard The
costs incurred in the present case will demonstrate only too clearly.”
been given a fair hearing of their claims, a party who is dissatisfied with the decision dispute arose after the completion of the works. Carillion sought ov er £10 million, and
4.029 This case highlights the need for proper service of the adjudication notices as well as cannot simply use the principles of natural justice to have the adjudicator’s decision the adjudicator ended up with over 29 lever arch files of materials. As a consequence, the
The rationale behind this case is that a decision rendered by the adjudicator is interim 4.037
court proceedings on top of the adherence to the rules of natural justice. dispute could not be resolved within 28 days and the adjudicator asked for and received
set aside. What one can do is to seek a reconsideration of the merits by proceeding to in nature, and if a party is unhappy with the outcome even though there are errors
two extensions. He, therefore, had 10 weeks to render a decision. Carillion was awarded
rbitration or the courts to have the matter finally disposed of. of procedure, fact or law within the rendering of the decision, the party always has
4.030 In Davmus Construction Holdings Ltd v Marsh Life Ltd,19 McKenna J summarised the over £10 million. Devonport declined to pay. Devonport’s contention was that the
recourse of referring the matter to an arbitrator or a judge for determination.
essence of natural justice in [22] of his judgment by highlighting what Akenhead P* adjudicator's decision on defects was reached in breach of the rules of natural justice and
stated in Cantillon Ltd v Urvasco Ltd}1 was not supported by any adequate reasons whatsoever. From various case authorities, Jurisdiction for the purposes of adjudication can be classified into two aspects. One 4.038
5. Jurisdiction
the adjudicator’s refusal to consider evidence, which he regarded as irrelevant, was being whether the adjudicator has the prerequisite threshold to accept the appointment
“The authorities have consistently emphasised that, for a breach of natural justice simply not a breach of natural justice; only in rare and exceptional circumstances would and determine the matter, a phrase which most people come to recognise as “Do I have
Having jurisdiction to determine the dispute between the parties is of utmost importance 4.032
to be a bar to enforcement, the breach must be ‘plain’, ‘significant’, ‘causative a decision be regarded as unenforceable due to inadequacy of reasons. As such, Jackson J jurisdiction to act”. In determining this aspect, the adjudicator will consider a variety
to the adjudication process. Without such authority, the adjudicator’s decision will be
of prejudice’ or ‘material’. In Cantillon v Urvasco [20081 BLR 250 Akenhead J upheld the adjudicator’s decision and Devonport appealed the decision to the Court of of factors, such as:
null and void, thus rendering the adjudication award (commonly referred to as the
considered the earlier authorities and summarised the applicable principles as Appeal24 in which Chadwich and Moore-Bick LJJ stated in [86] of the judgment that:
adjudicator’s “decision”) unenforceable in the courts of law.
follows at paragraph 57: (1) Do I have a conflict of interest in the matter — impartiality and independence;
If the adjudicator has jurisdiction, then courts of law tend to enforce the decisions no 4.033 “It is only too easy in a complex case for a party who is dissatisfied with the
’From this and other cases, 1 conclude as follows in relation to breaches of natural (2) Do I have the time to commit to the matter,
matter whether a party wants to challenge the decision based on errors of fact, law or decision of an adjudicator to comb through the adjudicator’s reasons and identify
justice in adjudication cases:
procedure, and only under exceptional circumstances will a court of law not enforce points upon which to present a challenge under the labels ’excess ofjurisdiction' or (3) Do I have the expertise to handle the matters in dispute;
a) It must first be established that the adjudicator failed to apply the rules of the decision. The threshold tends to be where the adjudication process was flawed ‘breach of natural justice’. It must be kept in mind that the majority of adjudicators
(4) Is there a valid agreement between the contractual parties (if not a statutory form
natural justice; •od has resulted in a decision which is materially wrong or unfair would the are not chosen for their expertise as lawyers. Their skills are as likely (if not more
of adjudication) and is adjudication mentioned under the dispute resolution
challenge be substantiated. On average, the technology and construction court of likely) to lie in other disciplines. The task of the adjudicator is not to act as arbitrator
b) Any breach of the rules must be more than peripheral; they must be provisions of the agreement;
the United Kingdom hears “... 80 challenges to adjudicator’s decisions every year and or judge. The time constraints within which he is expected to operate are proof of
material breaches;
the most common grounds for challenge are breaches of natural justice and jurisdiction that The task of the adjudicator is to find an interim solution which meets the (5) Have the parties’ adhered to the appointment requirements as stipulated in the
c) Breaches of the rules will be material in cases where the adjudicator has issues needs of the case. Parliament may be taken to have recognised that, in the absence agreement;
failed to bring the attention of the parties a point or issue which they ougW of an interim solution, the contractor (or sub-contractor) or his sub-contractors will
Jackson P4 set out four basic principles in [80] in Carillion Construction Ltd v 4.034 (6) Has there been a previous adjudication on the same dispute, and
to have given the opportunity to comment upon which it is one which i* be driven into insolvency through a wrongful withholding of payments properly
Devonport Royal Dockyard Ltd21 which he stated would apply to any attempt to enforce
either decisive or of considerable potential importance to the outcome d due. The statutory scheme provides a means of meeting the legitimate cash-flow (7) Are the parties to the agreement the same parties bringing the action to
the decision of the adjudicator.
the resolution of the dispute and is not peripheral or irrelevant requirements of contractors and their subcontractors. The need to have the ‘right’ adjudication.
d) Whether the issue is decisive or of considerable potential importance or is answer has been subordinated to the need to have an answer quickly. The scheme
“(1) The adjudication procedure does not involve the final determination of
was not enacted in order to provide definitive answers to complex questions Once the adjudicator has determined that he has jurisdiction to act, he must adhere to 4.039
peripheral or irrelevant obviously involves the question of degree which anybody’s rights (unless all the parties so wish).
Indeed, it may be open to doubt whether Parliament contemplated that disputes the requirements to ensure that he maintains such jurisdiction throughout the process
must be assessed by any judge in any case such as this.
(2) The Court of Appeal has repeatedly emphasised that adjudicators’ decisions involving difficult questions of law would be referred to adjudication under the w else his decision at the end of the day may not be enforceable. Factors in which an
«) It is only if the adjudicator goes off on a frolic of his own, that is wishiof must be enforced, even if they result from errors of procedure, fact or law: see statutory scheme; or whether such disputes are suitable for adjudication under the *djudicator must adhere to include the following:
to decide a case upon a factual or legal basis which has not been argued Bouygues, CAB Scene and Levolwr, scheme. We have every sympathy for an adjudicator faced with the need to read)
or put forward by either side, without giving the parties an opportunity a decision in a case like the present.” (1) Extent and scope of the dispute being referring to adjudication;
to comment on or, where relevant put in further evidence, that the typ6
(2) Procedural timelines;
1(12 My 2011}
172 Cm LJt \n lUd » Can than Construction Ltd v Devonport Raya! Dockyard Ud [2006] BLR 15 (3) Adhere to the rules of natural justice;
ai ttmkmiUi A* m U then wit
poat)MJt iso BLR 310.
 62 ADJUDICATION QUALITIES AND ATTRIBUTES OF AN ADJUDICATOR «J
60 ADJUDICATION JURISDICTION 61
jurisdiction and they continue to participate actively throughout the adjudication Makers UK Ltd v Camden London Borough Council” raises interesting issues as to bow
(4) Ensure that errors of fact, law and procedure are minimised as far as possible; Although an adjudicator does not have the ambit to make a binding ruling on his own 4.042 process, then English authorities support the rationale that the disputants will ha\t adjudicator-appointing institutions select and appoint adjudicators.
jurisdiction, to plainly ignore the fact that one does not have the power to make a given the adjudicator jurisdiction in any event and will be prevented from denying!
(5) Ensure that one is not determining disputes that have previously been One of the prime qualities an adjudicator should have is the ability to remain impartial
determination and simply deal w-ith the matter does not make sense. In Enterprise subsequently. In the English cascAedifice Partnership Ltd v Shah,l11 Akenhead J” cam*
determined in a previous adjudication — res judicata principles; and throughout the proceedings. The question the law asks is whether the fair-minded and
Managed Services Ltd v McFadden Utilities Ltd,7* Coulson J’° in [98] stated that: to the conclusion (in [ 15] -[20]) that the key issue is whether the parties have (1) agreed
informed observer, having considered the relevant facts, would conclude that there was
(6) Ensure that parties have the opportunity to present and be heard. to give the adjudicator jurisdiction to resolve any objections; or (2) if they have oot
a real possibility of bias?*4 In Lanes Group Pic v GalUford Try Infrastructure Ltd?
“The adjudicator compounded that failure by refusing to address the jurisdiction agreed whether the objecting party has (a) effectively reserved; or (b) waived its position
Akenhead P' (as he then was) stated in [27] that:
4.040 The general rule of thumb is that, in the absence of an agreement (or stipulated rules of n points raised fairly and squarely by Enterprise. He repeatedly said that he could on jurisdiction. For there to have been an implied agreement to give Uic adjudicator
institution) to the contrary, an adjudicator does not have the remit to make a binding rulii* not decide his own jurisdiction and he therefore refused to grapple at all with the jurisdiction, the court will need to take into consideration the entire materials said and
"So far as apparent bias is concerned, relevant authorities were quoted in the case
on his own jurisdiction unlike an arbitrator (unless he is expressly given such authority) jurisdiction issues being raised. Of course the adjudicator was right to say that he done during the course of the adjudication. This is done so as to determine whether
of Makers UK Ltd v London Borough of Camden [2008] EWHC 1836 (TCC):
In Air Design (Kent) Ltd v Decrglen (Jersey) Ltd? Akenhead P* stated in (20] that: could not make a binding decision on his own jurisdiction: sec paragraph 10 of the it can conclude with conviction that the parties must be taken to have agreed that tbe
judgment of May LJ in Pegram Shopfitters v Tally WeijI (UK) Ltd [2003] EWCA adjudicator had such jurisdiction. ‘[30] The Court of Appeal has considered challenges on the grounds of bias in
“The first point taken by Air Design is that the parties gave the Adjudicatorjurisdiction Civ 1750. However, it is always useful, and often important to the parties, for the AMEC Capital Projects Ltd v Whitefriars City Estates Ltd. Lord Justice
to decide the issue ofjurisdiction. If that was the case. Air Design would have a good adjudicator to consider and express a view as to jurisdiction at an early stage, even Dyson said at Paragraphs 22 and 37:
point. However it is a point which cannot succeed for the following reasons: if only in outline, particularly where, as here, the jurisdictional debate overlapped 6. Qualities and Attributes of an Adjudicator
'It is easy enough to make challenges of breach of natural justice against an
with the size, volume and timing issue referred to above. In my judgment, the adjudicator. The purpose of the Scheme of the 1996 Act is now well known.
(a) It is abundantly clear that in their submissions to the Adjudicator the
adjudicator ought to have outlined his conclusions as to jurisdiction when the 4.046 Coulson J, in his book, Coulson on Construction Adjudication,M identifies three
clearest possible reservation on jurisdiction was made by Decrglen at tbe It is to provide a speedy mechanism for settling disputes in construction
points were first raised by Enterprise. If he had done so, I think he would have also characteristics which he describes as essential for an effective adjudicator, namely, tbe
beginning of their written submissions (see above). contracts on a provisional interim basis, and requiring the decisions of
seen how important it was for him to decide at the outset whether or not this Final ability to:
adjudicators to be enforced pending final determination of disputes by
(b) One needs to read the contents of those submissions in the light of that Account claim could be dealt with fairly under the summary adjudication process.” arbitration, litigation or agreement. The intention of Parliament to achieve
very clear reservation. Requests in those submissions to the Adjudicator (1) Manage time efficiently and effectively (the adjudicator’s own time and that of
this purpose will be undermined if allegations of breach of natural justice
to ‘find’ or ‘determine’ this or that are clearly subject to the reservation The Judge further went on to state in [99] that: 4.043 the disputants).
are not examined critically when they are raised by parties who are seeking
In any event Paragraph 8 of the first set of submissions makes it clear that (2) Understand the essential issues quickly and focus on those issues. to avoid complying with adjudicators’ decisions. It is only where the
all that Deerglen were asking the Adjudicator to do was to ‘enquire into "In my judgment, the adjudicator ought to have taken more of a grip on this defendant has advanced a properly arguable objection based on apparent
his jurisdiction and determine that he docs not have any’jurisdiction. adjudication at the start, and reached early views both as to jurisdiction and as to (3) Treat the parlies fairly and courteously, giving them an opportunity to be heard
bias that he should be permitted to resist summary enforcement of tbe
whether it could be dealt with fairly in the time period. Had he done so, I think it and to take onboard their submissions.
(c) I am satisfied that the Adjudicator did not and did not purport to reach i adjudicator’s award on that ground ...
likely that for one, or maybe even both, of these reasons he would have concluded
decision as such on jurisdiction. As set out above, he makes it clear that he 4.047 Other attributes which are crucial include the abilities not only to grasp the technical
that the adjudication could not be properly or fairly progressed and that the right The passage in the conversation which led the judge to hold that a fair-
believed that he did ‘not have the power to decide [his] own jurisdiction'. issues but also to understand the legal concepts in particular contract and tort law, as
course was resignation. That would have obviously saved a good deal of time and minded and informed observer might well have concluded that there was
All he did was to 'investigate any challenges to* his jurisdiction and well as the observance of the rules of natural justice and above all the ethical standards
money, not least the costs of these Pari 8 proceedings which, as I understand it, a real possibility of bias was the statement by [AMEC's solicitor] that the
‘report [his] non-binding view’. The fact that he repeated verbatim tbe expected of an adjudicator.
are now put at the barely credible figure of £240,000. The fact that, as a matter of reason why the dispute was being referred to (the Adjudicator] was that
contents of his letter of 4 August 2008 in his formal decision does not in
practicality and fairness, this claim was not suitable for the summary adjudication his familiarity with the facts would save time and costs ... I do not accept
logic affect this view." 4.048 Although most disputants tend to choose adjudicators based on their vast number of
process only supports my conclusion that the reference to adjudication was that this remark amounted to an invitation to [the Adjudicator] to reach the
years of experience in the industry, their ability to quickly grasp the issues and to write
inappropriate as a matter of law.” same decision as on the previous occasion, still less that it is to be inferred
4.041 However, Akenhead J further stated in [22(b)] that there are exceptions to one in a reasoned decision, most adjudicators, nowadays, other than statutory adjudicator*
that there was a real possibility that [the Adjudicator] would reach the
determining one's own jurisdiction: tend to be appointed on the basis of their fees. With a competitive fee arrangement,
Based on this, it would be inappropriate to completely ignore the jurisdiction aspect 4.044 same decision by reason of that remark. I would accept that conversations
disputants arc flexible as they realise that a majority of the adjudicators do have
without giving it some thought as it would fall short of the fundamental principles of between one party and the tribunal in the absence of the other party should
"... There may be cases, and this is clearly one, where substance and jurisdiction the prerequisite skills and competence to handle matters, given that the majority of
natural justice as Lord Hcwart CJ in the leading English case R v Sussex Justices, ex p be avoided. Communications should ordinarily be in writing with copies
overlap so that it is within the Adjudicator’s jurisdiction to decide as matters within the adjudicators have gone through the necessary training and are listed in various
McCarthy11 stated that "fundamental importance but justice should not only be done, to all parlies. But I see nothing in the circumstances of this conversation,
his or her substantive jurisdiction whether there have been in effect variations to designated appointing authorities’ panels. Disputants believe that if they can secure an
but should manifestly and undoubtedly be seen to be done". which arose out of an innocuous telephone call to [the Adjudicator’s] office,
the contract pursuant to which he or she has properly been appointed Adjudicator adjudicator who offers reasonable services, they are of the view that they are choosinj
which would lead the fair-minded and informed observer to conclude that
It cannot then in those circumstances be a valid challenge to his or her jurisdiction Adjudicators should not adopt a passive approach to jurisdictional issues but should 4.045 an individual who has the competence to handle their disputes effectively and at •
what was said would give rise to a real possibility of bias.'
that upon analysis he or she may be wrong as a matter of fact or law in determining wisfy themselves that they do have the prerequisite jurisdiction as soon as practicable relatively competitive cost, a win-win for all.
that such variations were made to the originating contract as opposed to a series of when the adjudication begins. If disputants do not challenge the adjudicator's
later legally unconnected contracts.” * PGOI) BLR 470.
“ 132 Coo 1 R 100. . f‘on" * Mapll (2002] 2 AC J37.
l poll] I BCLC414. M Ai Akenhead LJ then wii „ P°»)1CLC»J7.
** POOIJ EWHC (TCC) M Peter Coulton. Coulson on Consfn«non Adjudication (Oxford Umvernfy Preei. 2nd ed 2011) part II 02.
Ai CouIkw U than Ml
■ Ai Mtnfc—4 U then w»» “ U924) I KB 296.
 66 ADJUDICATION STATUTORY ADJUDICATION — HONG KOMC «7
64 ADJUDICATION STATUTORY ADJUDICATION — HONGKONG 65
4.054 It is proposed that the SOPL will cover a wide range of construction contracts includinj consideration of the dispute. It might be that the court proceedings or arbitration
[31] That case involved an adjudication by an adjudicator who had beea expressed views, particularly in the course of the hearing, in such extreme construction contracts, consultancy appointments, supply contracts and subcontracts, would encompass other matters in addition to the claims adjudicated.
successfully challenged on the ground that he did not have jurisdiction a and unbalanced terms as to throw doubt on his ability to try the issue with regardless of the contractual sum. Government and specified statutory bodies shall be
• The adjudicator's decision is binding and enforceable on an interim basis m the
an earlier adjudication. Upon the application of the successful party, such an objective judicial mind (sec Vakauta v Kelly (1989) 167 CLR 568); or if, bound by the legislation and would not be exempted.
same way as a court judgment and there can be no set off against an adjudicator's
application suggesting that the same adjudicator be appointed, the RIBA for any other reason, there were real ground for doubting the ability of the 4.055 Construction contracts shall include those providing for new buildings (existing decision. Even if one of the parties takes the dispute on to court or arbitration,
duly appointed him. Lord Justice Dyson confirmed that the test propounded judge to ignore extraneous considerations, prejudices and predilections and buildings are excluded from the SOPL) as well as maintenance, repair and renovation payment of the adjudicator’s decision must be made in the meantime. Wbea
in Porter v Magill [2002] 2 AC 357 for apparent bias applied: bring an objective judgment to bear on the issues before him. The mere fact works. For the private sector, some limitations may be imposed. These include the court or arbitration proceedings are concluded, it may be that further amounts
that a judge, earlier in the same case or in a previous case, had commented
‘It is rightly not in dispute that the rule against bias applies to adjudicaton following: have to be paid or repaid.
adversely on a party or witness, or found the evidence of a party or witness
appointed to determine disputes under the 1996 Act It is not said on behalf to be unreliable, w'ould not without more found a sustainable objection. In • Courts can enforce adjudicator’s decisions even if it is apparent they are legally
of Whitefriars that Mr Biscoe was in fact biased in reaching his second (1) Construction contracts <HK$5 million arc not covered;
most cases, we think, the answer, one way or the other, will be obvious. But or factually wrong. This is because the overriding objective of adjudication is
decision. It is, however, submitted that his decision should be declared to if in any case there is real ground for doubt, that doubt should be resolved (2) Consultancy agreements and supply contracts <HKS 0.5 million are not to provide a rapid independent decision. It is inevitable that decisions may at
be invalid on the grounds of apparent bias. The test for apparent bias b in favour of recusal. We repeat: every application must be decided on the covered; and times be rough and ready but parties can still go to court or arbitration for a final
not in doubt. It is whether a fair-minded and informed observer, having facts and circumstances of the individual case. The greater the passage of considered judgment or award which will be given after completion of the full
considered all the circumstances which have a bearing on the suggestion (3) Contracts for construction other than new buildings, ie, addition and alteration
time between the event relied on as showing a danger of bias and the case litigation or arbitration process.
that the decision-maker was biased, would conclude that there was a real (A&A) that falls outside the broad definition of new building, maintenance,
in which the objection is raised, the weaker (other things being equal) the repair, renovation and demolition contracts, however substantial, are not • Courts may refuse to enforce an adjudicator’s decision where it was made
possibility that he was biased: Porter v Magill... ’ (Paragraph 16) objection will be.” covered. without jurisdiction. For example, the contract was not one to which SOPL
Camden only puts forward apparent bias as a ground for complaint. applies or the adjudicator decided a dispute which was not referred to them.
There is little to add to these observations.”
[32] Dyson LJ also endorsed as useful guidance given in Locabail (UK) Ltd t 4.056 The rationale for the proposed limit on private sector contracts is that the general Courts may also refuse to enforce a decision where there was a serious breach
Bayfield Properties Ltd [2000] QB 451 at Paragraph 25 of the judgment in There is a saying that no one can be a judge in his own cause. Therefore, if an adjudicator 4.051 public, who may not possess the necessary contractual and legal knowledge, should of natural justice. For example, a party was not allowed a fair opportunity to
the Court of Appeal: has an interest, in the matter to be determined and the outcome, he should seriously be shielded from the unexpected burden of legal liability brought by the SOPL when present its case or comment on its opponent's case.
consider whether he should proceed with the adjudication. The question one might raise procuring construction works.
1 It would be dangerous and futile to attempt to define or list the factors which ■ The right to adjudication cannot be contracted out of and cannot be limited. For
is, how does one define this interest? 4.057 With the ageing of buildings and the rising maintenance costs comparable to new example, contractual provisions seeking to limit and define when a dispute is
may or may not give rise to a real danger of bias. Everything will depend
on the facts, which may include the nature of the issue to be decided. We Having an actual interest is easy to identify and it goes without saying that the adjudicator 4.052 developments, the limitation of SOPL to only new buildings in the private sector bn considered to arise for the purposes of adjudication will be ineffective. Also,
cannot, however, conceive of circumstances in which an objection could be should without doubt resign or decline from being considered for appointment. The been met with overwhelming disappointment from building maintenance contractors provisions requiring an Engineer’s/Architect’s decision on the dispute or similar
soundly based on the religion, ethnic or national origin, gender, age class, most difficult question one has to answer is where there is no actual interest but simply and those involved with A&A works. as a precondition to adjudication will be ineffective. Adjudicators will be able to
means or sexual orientation of the judge. Nor, at any rale ordinarily, could an «n appearance of bias. So, the underlying question is should one also resign or decline review certified amounts relied on for the purposes of Payment Responses and
4.058 The proposed legislation provides that when the main contract is covered by SOPL, all
objection be soundly based on the judge’s social or educational or service or from being considered for appointment as the perception from one person may be decide that different amounts are due.”
its downstream subcontracts will also be covered. Likewise, when the main contract is
employment background or history, nor that of any member of the judge’s different from another. The safest bet would be to decline. not covered, all its downstream subcontracts will similarly not be covered. This should
family; or previous political associations; or membership of social or k April 2016, the Government issued the findings of the consultation40 it carried 4.060
ensure that a party will have a fair right to make a claim against its client/upstream
sporting or charitable bodies; or Masonic associations; or previous judicial out with stakeholders to ascertain their views of the proposed SOPL. In general, the
7. Statutory Adjudication — Hong Kong contractor when being claimed against by a subcontractor.
decisions; or extra-curricular utterances (whether in textbooks, lectures, industry supports the proposed legislation with the following being generally agreed
speeches, articles, interviews, reports or responses to consultation papers); 4.059 In June 2015, the Government issued a consultation document” and listed within the
At the time of writing this book, the Security of Payment Legislation (SOPL) was still 4.053
or previous receipt of instructions to act for or against any party, solicitor document some of the key features of adjudication under the SOPL, which include: “(a) SOPL applying to all Government contracts, and contracts entered into by the
*®der preparation, and it was anticipated to be released at the end of 2019. The key
or advocate engaged in a case before him; or membership of the same Inn, specified statutory and/or public bodies and corporations.
“sues likely to be addressed by the SOPL include the following: “• Disputes are referred to an adjudicator who will independently consider and
circuit local Law Society or chambers (see KFTCIC v Icon Estero SpA (b) Limiting coverage of SOPL to contracts relating to construction activities in
(Court of Appeal of Paris, 28 June 1991, International Arbitration Report, decide the dispute by issuing a written decision which will set out any amount
0) Scope of application to cover a wide range of construction contracts. Hong Kong.
vol.6, 8/91)). By contrast, a real danger of bias might well be thought to to be paid. The timetable for adjudication is very rapid and the costs at*
arise if there were personal friendship or animosity between the judge and (2) Enhance cash flow along the supply chain by providing a maximum payment comparatively low compared to typical court or arbitration proceedings. (c) SOPL applying to contracts for the supply of materials or plant
any member of the public involved in the case; or if the judge were closely period which is in line with common industry practices.
• If either party is unhappy with the decision, they can take the dispute to cot*1 (d) Retaining full freedom for parties to agree when payments can be claimed
acquainted with any member of the public involved in the case, particularly (3) Prohibit “Pay when Paid" clauses or any other conditional payment terms that (or arbitration if the contract provides for it) for a final determination in the and the basis of valuation of the same but limiting the maximum payment
if the credibility of that individual could be significant in the decision of usual way. This would not be an appeal of the adjudicator's decision but a fres&
constitute unfair payment practices. periods which can be imposed once a party is entitled to claim.
the case; or if, in a case where the credibility of an individual were an issue
to be decided by the judge, he had in a previous case rejected the evidence (4) Right to suspend work in case of non-payment
of that person in such outspoken terms as to throw doubt on his ability t° See http* Jfwwwinb *oviJ^cmJo«c«Wcca*ertJIO^S<^_Co*wilt»t>oB_Doa«»« pdf (II My 2011). 544 Wtpr.^v,ir.), KVSOPL_o»nh«c« r*port pdf (II My 2011)
(5) Right to refer disputes to adjudication as a form of speedy resolution of disputes.
approach such person’s evidence with an open mind on any later occasion;
or if on any question at issue in the proceedings before him the judge bad (6) Enforcement of adjudication decisions.
 “0 ADJUDICATION ADMINISTERED ADJVDICATION FROCXDCKZS "H
vnofs ADMDOSTIMD ADJlDtC AJION rROCEDl'RTS **
serv e as the adjudicator Both the requesting and responding patties shall ensure tha (0 To request any further submissions or representations or statements, and at
(g) Whether a better process procedure is needed foe ypoiatment of an their nominees suggested shall be free of any conflict of interest and that the nominee* any time to permit any party to amend the aforesaid,
adjudicator and referral of the dispute to the adjudicator once a notice of do not hav e any financial or personal interest in the outcome of the adjudication
ad^kation is served. (g) To direct any party to produce to every other party and to tbe adjudicator for
4.066 The disputants shall have 14 days to mutually agree on the appointment ofthe adjudicator, inspection, and to supply copies of, any documents in that party's possession,
Ax w (\) Whether parties should only be able to agree an adjudicator after a dispute and if they are unable to agree on a suitable candidate, then the disputants shall seal custody or control;
ktittto has arisen or whether it would be better if they could do so in their contracts to the HKIAC a combined list of all nominees, indicating their order of preference,
or after their contracts are entered into. (b) To give directions as to tbe timetable for tbe adjudication, or as to any deadlines,
similar to the list system used in the HKIAC Domestic Arbitration Rules. After 21 divi
or limits as to tbe length of written documents or oral representations.
(0 Whether the defanlt nominating body should be HKIAC or whether a from the referral of adjudication, the HKIAC shall appoint the adjudicator. Under Ac
vl' different or other bodies should be able to cam out default nominations of Rules art. 17, it is stipulated that “No person shall be appointed as adjudicator who it (i) Otherwise to issue directions relating to tbe conduct of tbe adjudication"
an employee of any of the parties, or who has any financial or personal or any other
conflicting interest in the result of the adjudication, except with the written coosea Ooe unique feature of the Rules is tbe ability of tbe adjudicator to rule on bis own 40
h para 145 of the consultation, it was stated that “Although the responses to the 4.062 of the parties". The adjudicator appointed has an overriding duty to act impartial!) jurisdiction and the validity of his appointment He has tbe discretion to review all
owaStibco indicate a divergence of views on some questions of die proposed and fairly in accordance with the Rules, the parties* agreement and the applicable lav decisions, opinions, instructions and certificates associated with tbe agreement lailess
taaeawk. there is positive suppert for SOPL. The Government intends to proceed avoiding unreasonable expense or delay. (be agreement is final and conclusive.
Tsnesf or &o&d as doe S as ahdoKt «\2 be added u ssspeal m wit toe legislation" 4.067 After receiving from the HKIAC the confirmation of appointment of the adjudicator, the Tbe jarties to the adjudication must cooperate with the adjudicator sod if the parties foil A(PI
shaa iiar weds and vffl be eocitad to aideveai costs and cvtrswts ti referring party shall submit within seven days its written submissions, known as “the
The eaa^raestofSOn. is a step in the right direction to assist the industry in addressing 4.063 to comply with tbe Rules and tbe instructions of tbe adjudicator, tbe adjudicator may-
cash flow problems, something which has affected productivity and efficiency of refenal submissions" to the responding party and the HKIAC The refenal submission*
U> he todestry for some tune. Although Hong Kong is relatively slow in enacting the shall contain concise details of the dispute together with necessary documentaries “(a) Make a decision dismissing all or port of a party's submissions;
tepstacn. it has the added advantage dial some jurisdictions have tested the waters, and that have a direct reference to the dispute on hand. Within seven days thereafter, the
responding party shall file its “response submissions". The response submissions shal (b) Continue with the adjudication in tbe absence of a party or witness or
if Hccg Kong learns from these jurisdictions, then it would have die added advantage
contain concise details of the dispute, and where possible. respond to the refemi document or evidence.
•f act raalrng the same mistakes going forward. And at die same time, from a case
taw perspective, it win give the industry some guidelines as to best practices from a submissions and include relevant documents to support one's response. (c) Draw such adverse inferences from that failure to conph as the adjudicator
Ol
pacacal perspective. 4.068 The Rules provide provisions on the holding of money on account to facilitate tbe feels are justified in the circumstances;
m administration of tbe dispute. Should the disputants fail to deposit the necessary fim& (d) Make a decision on tbe basis of the information property provided to tbe
with tbe HKIAC the adjudicator is entitled to stay tbe proceedings. adjudicator,
S. Administered Adjudication Procedures
4.069 In terms of procedure, the adjudicator shall ascertain tbe facts and the law to determine
(e) Attach such weight as the adjudicator thinks fit to any evidence submitted to
Cta 9 September 201S. HKIAC published a set of Adjudication Rules41 based on a 4.064 the dispute. He can adopt any procedure be deems appropriate to dispense with tbe tbe adjudicator outside any period be or she may have requested or directed.
dispute. He shall observe the principles of natural justice throughout by affording tbe
'axo of sonrees including die United Kingdom's Housing Grants, Construction and
parties an opportunity to present their case and to respond to that of their oppooot (0 Make such order as tbe adjudicator thinks fit as to tbe payment of the costs of
^generation Act 1996 and the .Airport Core Programme Adjudication Rules (1992
Tbe adjudicator has the discretion to hold oral hearings and to receive oral evidence. tbe adjudication or tbe costs of the parties."
edewV amongst others. The objective of the Rules “is to obtain the fair resolution
Tbe parties are free to engage representatives (whether legal or technical) to assist
*f toy dispute arising under die contract without unreasonable delay or expense". The
throughout the proceedings. Tbe parties can limit the pxnven of die adjudicator cr The disputants and tbe adjudicator can consolidate two separate adjudications based 4.072
of the adrodkabon shall be in Hong Kong at die HKIAC, and the language of the
confer any power upon tbe adjudicator they deem appropriate. The powers available to <tai tbe same agreement cr on related disputes under different agreements. Disputants
•>a6atxo proceedings be in English unless the dispdasts and the adjudicator
m tbe adjudicator are provided under Rules art42; they include: can join third parties to tbe adjudication upon the agreement of the disputants and
^sode otherwise. The party requesting (referred to as the "referring party") for
*1todracicn shall file a wntmn request for adjudication with the responding party and adjudicator The joined parties are bound by the Rules unless the disputants and the
“(a) To make use of his or her own specialist knowledge; •‘fyahcator agree otherwise.
®dAC The request for adjudication shall spell oca the namre and background of the
the issues n dispute, the remedies sought and details of the responding parties (b) To meet and question any party or representative or witness; *^3e disputants and the HKIAC have the right to revoke the appointment of tbe 4.0*3
tod ie: respective coacact as weD as a list of at least three names of pommees aijodicator, and the adjudicator has the right to resign from the adjudication. Disputants
(c) To make any inspection or site visit, and to cany out or require to be earned
«i2ag to act as the aduhotor including then terms and conditions of appointment. have the right to terminate tbe adjudication proceedings at any time they deem
out any test or experiment or opening up;
the respeoiasg party shall serve a reply to the request for adjudication indicating its 4.065 ^V^opnale upon giving notice to the adjudicator and tbe HKIAC Any revocation.
(d) To direct tbe inspection, preservation, storage or interim custody of *7 notion or cease to act does not render a bar to begin fresh proceedings.
*^8®gaess to participate and at die same time provide a list of nominees willing to
property or sample or thing under the control of any party;
adjudicator shall reach a decision within 56 days from tbe referral submtssioas. 4.074
(e) To appoint no more than 2 experts, whether legal or technical, independent c* the parties agree to another time period. Should tbe adjudicator fail to reach a
the parties, to assist tbe adjudicator. within the tune specified, the adjudication shall be deemed term mated.
 72 ADJUDICATION CONCLUSION 73

4.075 The adjudicator's decision shall be in writing, signed and dated and shall state the some form of mandatory adjudication process.42 The key for adjudication to be effective Chatter 5
following: turns on preparation. Parties should where possible narrow the issues in the dispute so
that core differences are brought to light with the view of drafting a clear and precise
"(a) State the dispute referred to the adjudicator;
LITIGATION
referral notice and a response to the notice. They also should comply with the stipulated
procedural timelines and ensure that all supporting information is categorised and put in
(b) State the adjudicator's decision;
a sequence to allow the appointed adjudicator a seamless oversight of all matters with
(c) State the reasons for the adjudicator’s decision; the ultimate goal of rendering a decision that is comprehensive enough to address and Tama.
dispense with all of the parties’ issues in the dispute. With the introduction of the SOPL 1. Introduction......................... . 5.001
(d) Record any admission (not otherwise recorded in writing) made by any party
in the latter part of 2019, the landscape of the dispute resolution environment may
during the course of the adjudication; and 2. Civil Trials in Hong Kong •••••••• »•••• - 5 002
experience some adjustments, which will ultimately benefit users and those actively
(e) State the total amount of the adjudicator’s fees and expenses, including the (a) Small Claims Tribunal ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••> . 5 004
engaged in the construction industry as the cash flow issue affecting the industry in the
charges ofHKIAC." past will be addressed in a prompt and systematic framework that will greatly increase (b) Labour Tribunal.................................................................................... 5.007
productivity and reduce costs, thus benefiting all. (c) Lands Tribunal............................. 5.011
4.076 In reaching his decision, the adjudicator shall take into consideration any remedy (d) District Court......................................................................................... 5.014
which could be ordered by the courts of Hong Kong if the matter was refened to (e) Court of First Instance, High Court...................................................................5.017
the courts for determination. Subject to the terms and conditions of the agreement,
the adjudicator can award simple or compound interest as he thinks appropriate. The 3. Procedures to Commence a Civil Action.............................................................. 5.019
decision of the adjudicator is binding on the parties as from the date upon which it is (a) Action by Writ of Summons •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••■••••*« 5.020
rendered until the dispute is finally determined by arbitration or legal proceedings. (b) Action by way of Originating Summons 5.023
Nevertheless, the parties may agree to accept the decision of the adjudicator as final is
4. Early Termination of the Litigation........................................................... 5.024
determining the dispute. The decision is deemed to be a settlement agreement between
the parties. (a) Summary judgment............................................................................................. 5.025
(b) Striking out a claim............................................................................................. 5.028
4.077 The Rules provide for corrections and clarifications of the decision as well as providing
(c) Default judgment 5.030
guidance as to the costs of the adjudication and how the adjudicator allocates costs. The
parties are jointly and severally liable to the adjudicator’s fees and expenses. Where (i) Defendant’s failure to give notice of intention to defend......................5.032
the adjudicator's appointment was revoked, the adjudicator shall still be entitled to (ii) Defendant’s failure to serve defence........................................................ 5.033
his fees and expenses unless the revocation is due to the adjudicator’s own fault or (iii) Court’s power setting aside default judgments.......................................5.034
misconduct.
5. Civil Appeals in Hong Kong.....................................................................................5.037
4.07B As a precaution, the adjudicator shall not be appointed as arbitrator in any subsequent (a) Reviewing own decision 5.037
arbitration between the parties, unless the parties agree in writing to allow the adjudicate! (b) Court of First Instance, High Court.................................................................5.039
to act so. The adjudicator may be called as a witness in any subsequent arbitration or
(c) Court of Appeal, High Court •••■••••■•••••••••••••■••••••••••••••••■••••••••■••••••••a*•••••••••••• 3* 040
legal proceedings and shall be entitled to receive a reasonable amount as his fees and
(d) Court of Final Appeal......................................................................................... 5.046
expenses of being a witness.
6 Civil Justice Reform..................................................................................................5.049
4.079 The Rules provide a clear and concise framework for the conduct of adjudications in
Hong Kong and do cover a broad spectrum of situations to facilitate the effective and
efficient resolution of disputes similar to that afforded within the arbitration regime.

9. Conclusion

4.080 Although adjudication is a relatively effective form of determinative dispute resolution

process, the adoption rate remains relatively low in Hong Kong. With the introduction S** bttpt //wwwbmldu|dj|pateimbuntl eo m*/nt«Awldingdiip«»ut.‘file*/BufldL**</hro«%I02/CURRENT%20
of SOPL, things may turn around as this is evident from jurisdictions that have adopt^ T^NDSH20INH20ADJUDlCATIONH20r.vi»«d pdr(ll July 2011)
 78 LITIGATION CIVIL TRIALS IN IIONG KONG 7*

Tribunal, the Labour Tribunal, the I>ands Tribunal, the District Court or the Court of it has been raised by a party 14 Strict rules of evidence do not apply to proceedings m
If there be a controversy between men, and they come untoJudgment, that the First Instance. the tribunal, and the tribunal may receive any evidence which it considers relevant”
judges mayjudge them, then they shall Justify the righteous, and condemn the
wicked (Deuteronomy 25:1) (a) Small Claims Tribunal To promote speedy resolution of the dispute, a unique feature of the tribunal is that a 5.009
tribunal officer will assist the parties to reach early conciliation.” The tribunal officer
5.004 Tlic Small Claims Tribunal was established pursuant to the Small Claims Tribunal is granted with the power to conduct interview with the parties and to request for the
Ordinance (Cop.338). The Small Claims Tribunal was originally conferred with the production of relevant records. The tribunal officer will also prepare a summary of facts
1. Introduction jurisdiction to determine any monetary claims founded in contract, quasi-contract or to assist in the hearing.” He also enjoys right of audience before the tribunal.10
tort where the amount claimed is not more than HK$50,000, subject to exceptions
The most traditional form of determinative dispute resolution would he by litigation in 5.001 Like the Small Claims Tribunal, no bamsten or solicitors shall have a right of audience S010
which were listed under the Schedule of the Ordinance.5 On 27 June 2018, the
court. Hong Kong adopts a common law tradition in which all courts and tribunals are unless he is acting on his own behalf as a claimant or defendant, or he is representing
Legislative Council passed a resolution to increase the jurisdictional limit of the Small
subject to the doctrine of stare decisis. The doctrine imposes a duty for lower courts an offender who acted insultingly at the face of the tribunal.1'
Claims Tribunal to HKS75.000. This increase in jurisdiction will come into effect
to adopt legal principles decided by higher courts and not to depart from them. The on 3 December 2018. Claims in the Small Claims Tribunal are heard before a single
hierarchy of courts and the implied rule that all courts and tribunals have to act in (c) Lands Tribunal
adjudicator.
accordance with precedents provide certainty and predictability of the results of legal The statutory footing of the Lands Tribunal lies in the Lands Tribunal Ordinance 5.011
proceedings. Litigants would be entitled to have a legitimate expectation that like cases 5.005 Hearing in the Small Claims Tribunal is conducted in an informal manner.* The tribunal
(Cap. 17). The Lands Tribunal has a wide-ranging jurisdiction over land matters.21
would be decided alike. This chapter aims at giving a crude overview of the legal system may at any time allow a witness or a party to give evidence on oath or unsworn.’ The
To name a few, the tribunal has exclusive jurisdictions over disputes arising from the
in Hong Kong and a rough description of how a person or corporate entity can obtain tribunal is also not bound by rules of evidence and may request any evidence which it
following statutory instruments:
relief in civil matters through the judicial process. Due to the limitation of words, this considers relevant.1 The tribunal may also adopt an inquisitorial procedure in which it
may summon any witness, request the production of any document and inquire into any
chapter should only be treated as a brief overview of civil procedures. A more detailed (1) Landlord and Tenant (Consolidation) Ordinance (Cap.7);
matter which it may consider relevant to the claim.*
analysis can be found in Hong Kong Civil Procedure, more commonly known as "The
(2) Rating Ordinance (Cap. 116);
White Book”, which is published and updated annually. 5.006 One distinctive feature in proceedings before the Small Claims Tribunal is that do
barristers or solicitors shall have a right of audience before the tribunal, unless he is (3) Land Acquisition (Possessory Title) Ordinance (Cap. 130);
acting on his own behalf as a claimant or defendant.10
(4) Housing Ordinance (Cap.282); and
2. Civil Trials in Hong Kong
(b) Labour Tribunal (5) Building Management Ordinance (Cap.344).
Before 1 July 1997, Hong Kong was a British colony under the rule of both local 5.002
5.007 The Labour Tribunal was established pursuant to the Labour Tribunal Ordinance
case precedents and legislation and the English common law. Thereafter, Hong Kong A claim in the tribunal would be heard by one or more members of the tribunal.0 The 5.012
(Cap.25) and enjoys wide jurisdiction on matters related to employment" The
became a Special Administrative Region of the People’s Republic of China, which is a tribunal consists of the following:14
jurisdiction is an exclusive one in that any matter that falls within the tribunal'!
product of the Basic Law of the Hong Kong Special Administrative Region. Insofar as
jurisdiction would not be actionable in any other courts in Hong Kong.11 Claims are
•be civil justice system is concerned, the Basic Law provides Hong Kong with: (1) A President, who is a Judge of the High Court;
heard before a single presiding officer.11
(2) All District Judges, and
(1) An establishment of various courts and tribunals;1 5.008 Like the Small Claims Tribunal, hearings in the Labour Tribunal are conducted in an
informal manner.'4 The presiding officer assumes a more inquisitorial role where he is (3) A member appointed to the tribunal who has not less than five years’ experience
(2) The power of final adjudication;2
vested with the power to subpoena witnesses, order the production of any document or in the practice of land valuation.
(3) The power to determine the structure, powers and functions of the courts;* and put to a party or witness questions as he may think fit.15 This is accompanied by a dirt)
to investigate any matter which he may consider relevant to the claim, whether or not Procedurally, the tribunal follows the practice and procedure of the Court of First Instance 5.013
(4) Courts in Hong Kong would adjudicate cases in accordance with the laws of
m the exercise of its civil jurisdiction.25 It also enjoys the same jurisdiction to grant
Hong Kong.4

Civil cases are triaged to different first instance courts based on the dispute amount of 5.003 ’ SoiU Clnmi Tnbuntl Ordnuc* I S tod Sckodolf
• tM,limy Ibid 120(3). te* tlto 1WVMrfaifM r Swiuinb* lid (UCLA 34/201 3. (2016) HXIC J74)
'be case concerned. At first instance, the case would be tried in either the Small Claims Ibid •27(2)
1 nut, t inn
• /M.iiyiy the • 15
• Ibid.. W)*odl6<5) *l<(4)
• Ibid. 119 *<d •2*1)
" I-tbout Tnbuotl Oduvtoc* » 7 tod Scbtdul. /W. •2*2)
“ Ibid. 17(2). te* alto Char Chaung Fang r Hg Wutg Kwok 11911] HXC 215 Ibid •ad Scbcdnl.
'* Ibid.tHly the •*l)
IUd. »rt 14 " Ibid .t 20(1) •4
" Ibid.tWl) ibid •10(1)
 82 ITriGATION
EARLY TERMINATION OF THE LITIGATION BJ
BO LITIGATION PROCEDURES TO COMMENCE A CIVIL ACTION 81
or, if the statement of claim is not endorsed on the writ, with a concise statement of the Rules of the High Court (Cap.4A, Sub.Leg.) (RHC) and Rules of the District Court
remedies and reliefs, equitable or legal, as the Court of First Instance.*4 Nonctheleu, (e) Court of First Instance, High Court the nature of the claim made or the relief or remedy required.4* The Writ of Summonj (Cap.336H, Sub.Leg.) various mechanisms in which a party may seek the court’s
the Lands Tribunal Ordinance also, interestingly, states that the proceedings shall be should be served (ie, given to the opposing party) to the defendant within 12 months of issistancc to terminate the proceeding finally before going all the way for a trial. These
The High Court possesses unlimited jurisdiction, and theoretically, subject to express 5.017
conducted with as much informality as it considers appropriate” and evidence may be issue.44 The defendant, upon giving notice of intention to defend, has 28 days for the various procedures would be discussed briefly.
prohibition in law, any proceedings may be brought before the Court of First Instance
admitted even if it might not be adinissiblo under strict rules of evidence.” service of his defence (should he wish to contest the claim).4’
of the High Court. In terms of first instance civil jurisdiction, the Court of First Instance
consists of the original jurisdiction and authority of the English High Court of Justice, 5.021 Thereafter, the plaintiff may elect to file a reply against the defence served by the (a) Summary Judgment
(d) District Court
namely, the Chancery Division, the Family Division and the Queen’s Bench Division.*4 defendant. This should be done before the expiration of 28 days after the defence wa A plaintiff in an action begun by writ” may apply for summary judgment against the 5.025
5.014 The District Court possesses a general civil jurisdiction over civil disputes where the Specifically, the High Court also possesses first instance jurisdictions on the following serv ed on him.44 It is not mandatory for the plaintiff to serve a reply to the defends defendant on the ground that a defendant has no defence to a claim, or part of a claim,
plaintifTs claim does not exceed 1 IKS 1,000,000.” On 27 June 2018, the Legislative miners: If there is no reply to the defence, there is an implied joinder of issue on the defence, and apply to the court for full and final judgment.” When deciding whether to grant
Council passed a resolution to increase the jurisdictional limit of the District Courl and the joinder of issue operates as a non-admission of every material allegation of fad summary judgment, it is for the plaintiff to satisfy the court that if the facts pleaded in
to HKS3,000,000. This increase in jurisdiction will come into effect on 3 December (1) Bankruptcy proceedings originating from the Bankruptcy Ordinance (Cap.6); made in the pleading.47 If a defendant serves a counterclaim with his defence, and if the the statement of claim are properly constituted, he is prima facie entitled to summary
2018. plaintiff wishes lo defend it, then the defence to counterclaim and the reply should be judgment. The burden of proof is then shifted to the defendant to show cause and that
(2) Proceedings relating to the companies arising out of the Companies Ordinance
included in the same document.41 the court should not order summary judgment.”
5.015 The jurisdictional limit of the District Court docs not mean that the Court may hear
causes or proceedings that are vested in the exclusive jurisdiction of the Small Claims
(Cap.622) and Companies (Winding Up and Miscellaneous Provisions)
Ordinance (Cap.32); I 5.022 After the expiration of 14 days upon service of the reply (and defence to counterclaim, if Upon hearing parties’ submissions, it is for the court to decide whether the defence has 5.026
Tribunal, the Labour Tribunal and the Lands Tribunal.*0 Apart from jurisdictions over any) or, if there is no reply, 28 days after the service of the defence (and counterclaim, if raised any triable issue in the case. If the court is of the opinion that the defence has
(3) Probate proceedings arising out of the Probate and Administration Ordinance
contractual and tortious disputes, the District Court also has jurisdiction over specific any), the pleadings in an action are deemed to be closed.” Parties would then not be allowed do defence and no fairly arguable points, it is the duty of the court to give judgment to
(Cap. 10);
claims arising, inter alia, from the following statutes:
(4) Any matrimonial proceedings arising out of the Matrimonial Causes Ordinance,
I to file further pleadings without the leave of the court.** It would be only under highly
exceptional circumstances that the court would allow parties to file further pleadings.51
the plaintiff.” On the other hand, if there is clearly a triable issue, the defendant should
not be deprived of the opportunity to defend his claim in trial. If the defence put up
(1) Equal Opportunity Actions arising out of the Sex Discrimination Ordinance Matrimonial Proceedings and Property Ordinance, Guardianship of Minors by the defence is “shadowy", the court would grant the defendant leave to defend, but
(Cap.480), Disability Discrimination Ordinance (Cap.487), Family Statui Ordinance and Adoption Ordinance; (b) Action by way of Originating Summons only on a condition.40 That condition is usually for the defendant to give security to the
Discrimination Ordinance (Cap.527) and Race Discrimination Ordinance
(Cnp.602);
(5) Admiralty Actions; and” I 5.023 The beginning of a proceeding by way of Originating Summons is to file the Originating plaintiff’s claim. Failing to satisfy such condition would mean that the defendant cannot
defend his claim and full and final judgment would be entered in favour of the plaintiff.
Summons itself. The Originating Summons must include a statement of the questions
(6) Judicial Review.”
(2) Employees* Compensation Actions arising out of the Employees’ Compensation on which the plaintiff seeks the determination or direction of the court or a concise Insofar as arbitration is concerned, the court held that a summary judgment application 5.027
Ordinance (Cap.282); statement of the relief of remedy claimed.5* Like a writ, an Originating Summons must and applications to stay in favour of arbitration should be brought on together because
All matters in the Court of First Instance shall be heard and decided by a single Court of 5.018
be served within 12 months beginning with the date of issue. they are “two different sides of the same coin".41
(3) Claims arising out of the Personal Data (Privacy) Ordinance (Cap.486); and First Instance Judge.” Whenever necessary, a Justice of Appeal may sit in the Court
of First Instance as an additional judge40 and act in such capacity. Should a cause of
(4) Any matrimonial proceedings*1 arising out of the Matrimonial Causes (b) Striking out a claim
•ction involve a claim in respect of libel, slander, malicious prosecution, false
Ordinance (Cap. 179), Matrimonial Proceedings and Property Ordinance 4. Early Termination of the Litigation
imprisonment or seduction, the judge may order that the action be tried with a jury.41 A defendant can apply to strike out a plaintiff’s cause of action if, upon reading the 5.028
(Cnp.192), Guardianship of Minors Ordinance (Cap. 13) and Adoption
5.024 Upon closure of the pleadings, the normal procedure would be parties dealing with statement of claim, the court comes to the opinion that those pleadings give rise to no
Ordinance (Cap.290). cause of action.42 Nonetheless, this is a draconian measure as the court would be depriving
disclosure, discovery5* and going through milestone hearing dates,*4 namely, case
3. Procedures to Commence a Civil Action management conference,55 pre-trial review and, finally, the trial proper. Nonetheless, a party of a full hearing.4* The court would, therefore, exercise such power cautiously. If
5.016 Where the plaintifTs claim exceeds HK$ 1,000,000,” the District Court still has the fte cause of action pleaded in the statement of claim is sensitive to facts,44 or only being
jurisdiction to hear the matter if the plaintiff abandons the amount of the claim in excess A person may commence civil action either by way of "Writ of Summons’’ (together 5.019
of the jurisdictional limit of the District Court.” Where appropriate, the District Court with detailed pleadings) or by way of “Originating Summons”. Tire former is used ° Ibid, 0 6r.l
may, either on its own motion or on the application of any party, order all or part of any
action or proceedings to be transferred to the Court of First Instance, High Court or the
"ben the dispute is one which contains both factual and legal issues, whilst the latter is
used when the court is only required to determine a point of law.
f **
"
Ibid. 0 6rl(ll
Ibid. 01h2 n **it include! • defendant wfacu b* count erdnmi
" Ibid,0 Ilf 3(4) RHC tod ROC O 14 r 1(2) exprtmly iftpulitc* that m action that include* a cl tan by tha plwahff for libel. ilanda,
Lands Tribunal.*4 A claim is heard before a single District Judge.” " Ibid, O II r 14. ■tba mi, piexecution, fill* tapruoamcot. ieduction an tDtfi&oa ot fraud ot aa adaunlry action In rrm would sol to
" Ibid, 0.11 tJ<3) , "tided to apply for a aununary judgment

■ /ud. *
(a) Action by Writ of Summons
The beginning of a cause of action by way of Writ of Summons is marked by the 5.020
I "
■
Ibid.O II r20.
Ibid, O lit* ,
Stw“"l Hgan n rcwTf Foot Mm [2014] 4 HKLRD103. [J J. (4) and [10J. Ju Trm D) Kmprrorv Gmutsy * Tam Wtd Hmt
P°15|IHKLRD«22.|l4Hn)
* /W.*J0(SX«> " Bad, ofEtui Ana Ud v Labour Bmldrngi Lid (HCMP 769/2002. [2007] HKEC 1951). Choi' Po Chun * An ITb*1” „ or Bank * WtlU (1171) 31LT 197. 201 (Jtnel MR)
- /W.a.l0<«> Plaintiff issuing the writ.4* The writ must be endorsed either with a statement of claim [2012] 2 HKLRD 148. **" L\rm Drv'lopmtnii Lid v Ptlua Canirmcnan Co Ud[ 1969] 1 QB 607 (Dram* MR). Sum Ho Sun * Kammar
m Duma Own Or&A*oc« (Cap 336) 0 J2 « RHC ud RDC O 71J „ ^rrnonooal Ud [1919) 1 HXC 135. Junior Bark Lid * Cannrur [1969) 1 WLR 711
* IbiJ, 1 40
* Tba jonadicQoa v*nJd ba vat!ad lo the Family Court of (ha District Court Noocthelets, the court may a! its ovx* to#**
m oo Che application of tha parties transfer tha miner to Chi High Court Mitmnoatal C auses Ordinance 110A(U
a
a Court Ordinance (Cap 4) ■ 12(2)UI
A*,ial2B-l2E
I "
“
Governed under RHC tod RDC O 24.
Practice Du tee on 5 2 ipeafrcally lad down thti mdectooe due* will be unmovibit nvt u tie mou nceptx*^
„
.
Prta’f Pools Initmanonal Ud * Tern Ol Tong Ud [1985] 2 HKC 116
Shut Souring* Parsona! Rrprtimiartrot afCUung M Lum (19l|| HKLR 515. 5I1H
a cucumrtKtCM Lite mitroctjooi from the chent. chmjt in lefil repr etentiboni, the abiraea of ptejoAce lo die other p*1? „ Tat!*d,* r Bask ofAmtrtta National Association (2010) 3 HKLRD 417
Mammonal Pnxeodiugi and Property Ordinance 0IA and Guardiaoship of Minors Ordinance s 24 A*. 12 IK. or Ion that could he com pern*ted by coin are all not nceptxmiJ aicanrtancea puafying ta litamoo of mileatooe <W** S (A Minor) v Don* Cormrs- Carnal | I994J 3 WLR 133. *65 (Bugbrai MR), fto Xlu Faaxi Co Ud* Dorm* Agna*
a
» Or HKS3.000.000 after 3 December 2011 AW. ,32(1) " Governed by RHC and RDC 0 25 I***] I HKLR 137,14UVE (Lutra V R)
M District Court Ordinance 1 34( 1)
m fW.a 42 a
AW.» 4(2)
AW.,.SJA(1)
WtCuuJRDCO*
I
 R6 LITIGATION CIVIL APPEALS IN HONG KONG «7
m mu;a!ion CIVIL APPEALS IN IIONCJ KONO S5
5.038 Unlike other District Court and High Court level courts and/or tribunals, the Landj is practicable, apply for leave to appeal to the judge against whom judgment or order
weak on fate of evidence wilh little likclinesi of succcif,** the court, still, would not (ill) Court's power setting aside defaultJudgments Tribunal lias the power to review its own decision on the application of any part or oq tbe leave to appeal is sought.47 It is only when the judge has refused leave then a party
ilrikc it oul. The specific grounds on which proceedings may be struck out arc:44 the court’s own motion.*5 Like the Small Claims Tribunal and the Labour Tribunal, the should make a further application for leave to appeal to the Court of Appeal.4*
The court retains a general power to set aside default judgment, on such terms as 5.034
I.ands Tribunal may set aside, reverse, vary or confirm its decision.
it thinks just so as to avoid any injustice.74 The application to set aside is made by A party appealing against any judgment, order or decision of a judge in the District 5.043
(1) it discloses no reasonable cause of action or defence, ns the case may be; or summons to the master (or, in limited circumstances, of the Court's own motion75). Court should appeal to the Court of Appeal.44 Leave is required for an appeal against
(b) Court of First Instance, High Court
(2) it Is scandalous, frivolous or vexatious; or The test of setting aside hinges upon whether the judgment was obtained irregularly. i District Court judgment, order or decision.100 So far as applicable, such application
A default judgment would be said to be “regular" if it has been properly served to the 5.039 An application to appeal a decision of the Small Claims Tribunal or Labour Tribunal ibould be made to the judge from whom the appeal i9 sought.101 Failing which, a party
(3) it mny prejudice, embnrrnss or delay the fnir trial of the action; or defendant nnd the defendant had the opportunity to respond to it; on the other hand, requires leave. Leave would only be granted if the appeal involves a question of law may make a further application to the Court of Appeal.'01
(4) it is otherwise an abuse of the process of the court; and may order the action to be a judgment would be said to be "irregular" if it was never brought to the defendant’s alone or the claim is outside the jurisdiction of the tribunal.*4 A refusal by the Court of
An application to the Court of Appeal for leave to appeal may be heard orally or in 5.044
stayed or dismissed or judgment to be entered accordingly, us the case may be. attention. First Instance to grant leave to appeal is the final decision.*7
writing by a single or more Justices of Appeal.107 Leave should not be granted unless
In relation to irregular judgments, the rule is that the court would set oside ex debito 5.035 the Court of Appeal considers the appeal has a reasonable prospect of success or there
5.029 It should also be noted that, apart from the grounds above, the court has an inherent (c) Court of Appeal, High Courl
Juslltlate (without considering the merits of the defence).74 Such circumstances have been is some other reason in the interests ofjustice why the appeal should be heard.'04 Should
Jurisdiction under High Court Ordinance ». 16(3) to stay all proceedings which are held to include bad or ineffective service of the writ,77 judgment obtained by fraudnand 5.040 The Court ofAppeal of the High Court consists of the Chief Judge of the High Court and leave be refused, the party is entitled to have the fresh application determined by the
obviously frivolous or vexatious. It could be invoked alongside RIIC 0.18 r. 19 as both judgment entered prematurely (before the defendant had actually defaulted).7* Despite Justices of Appeal." A Judge of the Court of First Instance may also sit as an additional Court of Appeal consisting of two Justices of Appeal.'05
routes nre discretionary in nature.4’ the seemingly technical nature of these grounds, the court retains a residual discretion Judge of the Court of Appeal and exercise all jurisdiction and power of a Judge of the
An appeal against the decision of the Lands Tribunal lies in the hand of the Court 5.045
to impose the appropriate terms having regard to the surrounding circumstances.*0 Court ofAppeal.** The Court of Appeal exercises its jurisdiction by sitting in an uneven
of Appeal. An aggrieved party should obtain leave to appeal either from the Lands
(c) Default judgment number of Justices of Appeal not less than three.40 Under the Civil Justice Reform, the
Insofar as regular judgments nre concerned, the court enjoys a much wider discretion. 5.036 Tribunal itself or from the Court of Appeal.104 Parties have to satisfy the Tribunal or the
High Court Ordinance now allows the Court ofAppeal two Justices of Appeal to decide
5.030 Default judgment flows from a party's failure to comply with the rules of service of l-ord Wright in Evans v Dorflam1' defined the core question as “whether the defendant Court of Appeal that the appeal has a reasonable prospect of success or there are some
on a wide range of matters in the Court of Appeal, including the hearing or determining
pleadings in actions begun by writ. If the plaintiff fails to file the statement of claim, the has shown n defence on the merits to which the court should pay heed, not as a rule of other reasons in the interests of justice that the appeal should be heard.'07
of any appeal against an interlocutory judgment or order.41
defendant may, after the period for service to serve statement of claim expires, apply to law, but ns a matter of common sense”. It must be shown that there is “a real prospect
the court for an order to dismiss the action.64 of success", instead of a mere "arguable" defence and that evidence in support is also 5.041 The Court of Appeal enjoys a wide range of civil, criminal and regulatory appellate (d) Court of Final Appeal
potentially credible.11 jurisdictions. Insofar as its civil jurisdiction is concerned, the Court of Appeal hears:
5.031 Tho situation is more complicated when the defendant is in default. In either situation, Prior to the establishment of the Hong Kong Special Administrative Region, the Judicial 5.046
a plaintiff (or defendant by counterclaim) may, without n court order or leave of the Committee of the Privy Council was the highest court of Hong Kong as a colony of
(1) Appeals from any judgment or order of the Court of First Instance in any civil
court, enter judgment against the defaulted party. the United Kingdom. Since 1 July 1997, the Court of Final Appeal was established
5. Civil Appeals in Hong Kong cause or matter;41
pursuant to the Hong Kong Court of Final Appeal Ordinance (Cap.484) and became the
(I) Defendant's failure to (five notice of Intention to defend (2) Appeals from the District Court, subject to leave being granted; and47 final appellate court of Hong Kong.
(a) Reviewing own decision
5.032 A defendnnt must serve the acknowledgement of service with notice to defend within (3) Appeal against a decision of the Lands Tribunal.44 All appeals to the Court of Final Appeal would be heard only if leave was granted by 5.047
14 days after service of tho writ.44 Otherwise, he is at a risk of having judgment entered The Small Claims Tribunal Ordinance allows an adjudicator to review his own award 5.037 the Court of Appeal or by the Court of Final Appeal.10* The power of granting leave to
against him under RIIC and RDC 0.13. There is a distinction between claims for or order, wholly or in part, call or hear fresh evidence. An adjudicator may review his 5.042 In general, a party aggrieved by any judgment or order of the Court of First Instance ifl appeal is vested in the Appeal Committee of the Court of Final Appeal.104 The Appeal
liquidated nnd unliquidated damage!. For the former, judgment will be final;40 for the order on his own initiative or at the request of the parties. Thereon, the adjudicator may a civil matter may appeal as of right.47 Under the Civil Justice Reform, a new section, Committee shall consist of either the Chief Justice and two permanent judges or three
latter, on interlocutory judgment will be entered nnd damages would be assessed.7’ confirm, vnry or reverse his previous award or order.*5 A presiding officer of the Labour s. 14AA, was inserted in the High Court Ordinance which stipulates that leave to appeal permanent judges. Where a sufficient number of permanent judges are not available,
Tribunal is also vested with a similar power.*4 is required for any interlocutory judgment or order of the Court of First Instance.- the Chief Justice shall nominate a non-pennanent Hong Kong judge to sit in place of a
(II) Defendant's failure to serve defence When appealing against an interlocutory judgment or order, the party should, as far**
5.033 A defendant must serve his defence 28 days after the service of the acknowledgement of
tod ,013(9 tod O.I9 r9
service or statement of claim, whichever is later.71 The same rules apply for liquidated For iiunpU, vAtt* Judgment li entered igaiail * dud pereon or e dmolved company Lautrd Brat A Co v Banqut
IndnUrUlli di Motion (19321 1 KB 617. M Lands Tribunal Ordinance i I IA(iy " *HCO.J9r2B<2X
and unliquidated damages.71
fo Kwang Marbh Factory Ud v Wah Tit Decoration Co Ud 11996] 4 HKC 157. " SmiU Onmi Tribunal Ordinance t 21(1) and Labour Tribunal Ordinance i 32(1). " tod.039t2BO\
tod; Guangdong International Thai A Investment Carp Hong Kong (Holdings) Ud * rial Wah (Hong Kong) Wah Fat v Small Gaunt Tribunal Ordinance i 2I<3) and Labour Tribunal Ordinance i 32(3) m «ncosit2(ix
**11997) HKLRD <19. Dulrohh Iniemotional Fathloni l id v Chlang Shi Chou (1997] 3 HKC 170. Wing Lung Bank " High Court Ordmance i 3(1 \ A*,0.3lrX4).
** InlUtml Sim Imnimml UdvHTI Initnuulono) Accipumcit Ltd 11919] 1 HKC 175, Kant (Hong Kong) Ud v For*"* Lid V Ho Men lam [1999] 3 HKC 368 ” Ibid, 15(2) AM, 0-310(4).
Titltni Drvolapmni Ltd | 1999) 3 HKLRD 397 KVan v Palmir (1199) 2 QB 106 • A*f,«.34 *2) tod .Oil f 2(4A)
“ RHC-^RIXTO Ilf 19 Chorltrwonh v PooumuIH Ud(Thi Independent, 15 Mach 1993). " Atf, 1.34*2X4} „ *HCO J9i2A<9)
*’Ha frontturn v Titu Km Kan (Ho I) (1912] I HKC 312, King Pm,per Jhtding hd r Tinian Trading Ud <1*°* h Kwcmg Marblt Factor, Udr Wah Yu [heoration Co Ud (1996) 4 HKC 157. Law Kwok H,mg * Tie Ping Man (1999) • JKrf.fWXi). „ tt'lk Coon Qrdicmce i 14AA(4)
263/1996.11997] |(KLY 301). « HKC 397 ” Diitncf Courl Ordinance 163 and Hi|h Court Ordinance a 13(2X3) „ *HC0 59,.2Q2)
“ RIIC tad ROC 019 r I. 1*937] AC 473,419 " High Court Ordinance I 13(2Xc J provides (hat (he Courl of Appeal shall have (he junadic&oo lo bear any other ca** M Tnbwul Ordinance 111AA(I)
- n*j.o i21 v*> Fnr Shing CentimeHon Co Ud v Plantor Concern (HK) Ud (1917] 2 HKC 117. Pnmltr Fat hem Wtan Ud v Chon Mach conferred jurisdiction on it by My law „ tod, i Haa<6)
■ Ibtd.O Mr I CW War (1994)1 HKLR 377.3IJ.ime Kwok Htmg v 73# Ping Mem (1999] 4 HKC 397. L A MSpidalltl Construction " High Court Ordm ince s 14(1). subject lo exceptions expressly prescribed under s 14(3). „ Kooj Cowl a[ Finil Appeal Oduuoc* 123.
LJdvWo Htng Coturrvcnem Co Ud (2000) 3 HKLRD 262 • Ibtd.% I4AA/1) tod., 1.11(2).
■ IW.OIItJ Sail! Gum! Tribunal Ordinance t 27A.
" lUd .O I9it2 «od 3 Labour Tntmnal Ordinance i 31
 M LITIGATION CIVIL JUSTICE REFORM S9

permanent judge. The decision of the Appeal Committee is final and non-appealable.1" reference. These precedents assist parties in making informed decision when assessing
An application of leave to appeal would only be granted if the Court of Appeal or the merits of their case. With an increasing number of cases not reaching the civil justice
Court of Final Appeal considered that the question involved in the appeal was of great system but resolved by confidential proceedings or meetings, it may be argued that
general or public importance.1" future litigants are deprived of the benefit in considering the reasoning of the court.
5.048 On hearing the appeal, the Court of Final Appeal should be constituted by the Chief Without the benefit of authorities, it is likely that prudent legal advisors of disputants
might advise their clients to have a try of their luck in litigation. This indirectly (although
Justice (or a permanent judge designated to sit in his place), three permanent judges
inadvertently) discourages settlement, and thereby defeating the whole purpose of the
PART III
nominated by the Chief Justice and one non-permanent Hong Kong judge or a judge
from another common law jurisdiction. Where a sufficient number of permanent judges Civil Justice Reform.
are not available, the Chief Justice shall nominate a non-permanent Hong Kong judge
to sit in place of a permanent judge. In any event, the Court of Final Appeal always
consists of five judges.113

6. Civil Justice Reform ARBITRATION

5.049 On 2 April 2009, the Judiciary implemented the Civil Justice Reform. The thrust of the
whole reformation is to ensure that civil litigation is conducted in an expeditious and
cost-efFective manner. Remarkably, a new order, 0.1 A, w-as incorporated in the RHC
Amongst other things, 0.1 A r.l is of particular importance that is worth setting out
in full:

“The underlying objectives of these rules are-

(a) To increase the cost-effectiveness of any practice and procedure to be

followed in relation to proceedings before the Court;
(b) To ensure that a case is dealt with as expeditiously as is reasonably
practicable;

(c) To provide a sense of reasonable proportion and procedural economy in

the conduct of proceedings;
(d) To ensure fairness between the parties;
(e) To facilitate the settlement of disputes; and
(f) To ensure that the resources of the Court are distributed fairly.”

5.050 In allowing the courts to input resources to cases that truly merit judicial consideration,
the judiciary encourages disputants to resolve their disputes through alternative dispute
resolutions. By channelling cases outside the civil justice system, judges can focus oo
the cases that parties could not settle on or cases which are not capable of settling as •
matter of law.
5.051 Whilst litigation might be to a certain extent an expensive, rigid and time-consuming
exercise, the common law tradition provides disputants with a body of precedents ft*

/fcrf.iia
- Atf.uvixn
■** im •)«
 Chapter 6 I speak to your shame Is it so, that there is not a wise mem fees? mo.
not one that shall be able to judge between his brethren? (I

WHAT IS ARBITRATION?
1. An Oltunt of Arbitration
Para. Arbitration is one of the many types of dispute resolution mechanisms that helps channel
1. An Outline of Arbitration................... ■•••• • ••••••••••• • • •••••••••••■••••• ..... 6.001 ■way cause of actions from the court system. In Englcwtd and Wales Cricket Board
(a) Arbitration Ordinance.................. 6 003 Ltd v Kanena' Cooke J listed out 10 hallmarks that a classic arbitration would bear
(b) UNCTTRAL Model Law............. ••••••••■••.• ... 6.005
“(i) It is a characteristic of arbitration that the parties should have a proper
2. Advantages of Arbitration................. ••••••••••••a ..... 6 006 opportunity of presenting their case.
3. Disadvantages of Arbitration............. ■•••••••••••••••••a • ••••••• ••••• ..... 6.010 (ii) It is a fundamental requirement of an arbitration that the arbitrators do
4. Ad hoc and Institutional Arbitration.. not receive unilateral communications from the parties and disclose all
.....6 013
communications with one party to the other party
5. Conclusion........................... ...............
.....6.017 (iii) The hallmarks of an arbitral process are the provision of proper and
proportionate procedures for the provision and for the receipt of evidence.
(iv) The agreement pursuant to which the process is, or is to be, earned on (The
procedural agreement’) must contemplate that the tribunal which carries
on the process will make a decision which is binding on the parties to the
procedural agreement
(v) The procedural agreement must contemplate that the process will be carried
on between those persons whose substantive rights are determined by the
tribunal.
(vi) The jurisdiction of the tribunal to carry on the process and to decide the
rights of the parties must derive either from the consent of the parties, or
from an order of the court or from a statute, the terms of which make it dear
that the process is to be an arbitration.
(vii) The tribunal must be chosen, either by the parties, or by a method to which
they have consented.
(viii) The procedural agreement must contemplate that the tribunal will determine
the rights of the parties in an impartial manner, with the tribunal owing an
equal obligation of fairness towards both sides.
(ix) The agreement of the parties to refer their disputes to the decision of the
tribunal must be intended to be enforceable in law.
(x) The procedural agreement must contemplate a process whereby the tribunal
will make a decision upon a dispute which has already been formulated at
the time when the tribunal is appointed "

I»1 J1EWHC 1074 (Coon). P0H<U Sw •*» HUM*" * [WOO) 2 AO ER ( >237

a a>« w..)
 98 WHAT IS ARBITRATION? AD HOC AND INSTITUTION AL ARBITRATION 99
H WHAT IS ARBITRATION? ADVANTAGES OF ARBITRATION 97
to who would be adjudicating the matter. The benefit of this is twofold. First, the parties Further, arbitration, unlike other means of dispute resolution, does not essentially reduce 6^811
6.002 Thai said, there remains no official or statutory definition of what amounts to q Part 7 deals with the arbitral hearing itself. would have more confidence and trust in the arbitral tribunal as they have participated the costs incurred in resolving a dispute. Rather, on some occasions, the costs involved
“arbitration’'. in the process of constituting it. Second, the parties may, if they so wish, ensure that tbe for a full-blown arbitration might even be times more expensive than litigation. Unlike
Part 8 deals with the requirement of the award made by the arbitral tribunal and the
arbitral tribunal would have relevant expertise in determining the subject matter in litigation where both the venue of the hearing and the presiding officer are all supplied
termination of the arbitral proceedings.
(a) Arbitration Ordinance dispute. Unlike a professional judge who would usually only be specialised in la^ by the judiciary and the claimant would only be required to pay a nominal amount of
Part 9 deals with the recourse against an award, namely, an application to the court the parties in an arbitration would be free to select an arbitral tribunal with mixed court fees to initiate a proceeding, the costs for venues, supporting staff and the arbitral
6.003 In Hong Kong, the arbitration regime is governed by the Arbitration Ordinance
to set it aside. specialities. This may be particularly important if the subject of dispute in the arbitration tribunal are all borne by the parties.
(Cap.609), which commenced on 1 June 2011 and substituted the Arbitration
involves technical points of the trade or the arbitral tribunal would need to have an
Ordinance (Cap 341). Prior to the commencement of the new Arbitration Part 10 deals with the recognition and enforcement of an arbitral award. As mentioned hereinabove, one of the strengths of arbitration is the limited grounds 6.812
understanding of the unwritten common practice of the trade. This would usually not
Ordinance, arbitrations were categorically defined as “domestic” or “internatiooaP available to the parties to set aside or challenge the award. This ensures that the award
Part 11 deals with the provisions that a party may opt in or has automatically applied. be possessed by a professional judge.
arbitration. Under the new enactment, such classification no longer exists. Save rendered by the arbitral tribunal to the parties would be enforceable save in very
and except the abolition of the differentiation between domestic and international Parts 12 and 13 relate to miscellaneous, repeal, savings and transitional provisions. 6.008 In litigation, hearings, save in exceptional circumstances, would be conducted in open exceptional circumstances. Yet, this also means that the parties would face no remedies
arbitration, the structure and content of the old and new Arbitration Ordinance art court. This would mean that the general public may sit in a courtroom and hear the if they consider the arbitral tribunal has made a factual or legal mistake when rendering
Part 14 deals with the consequential and related amendments to other legislations.
roughly identical. On top of everything, the object and principles of the two version arguments and the evidence tendered by a party. Whilst the feature of open justice is a tbe award However obvious or pervert such conclusion might be, the court has proven
remain the same: cornerstone of the rule of law, it would be highly detrimental to commercial activities to be reluctant to intervene. As would be discussed later,2 the court is wily concerned
(b) UNCITRAL Model Law if sensitive business information has to be disclosed in the course of the hearing. with the structural integrity and due process of the arbitral proceeding but not the merits
3. Object and principles of this Ordinance Arbitration provides privacy and confidentiality to the parties in the course of an or correctness of the award. The arbitral process would, thus, essentially be the first and
In 1985, the United Nations Commission on International Trade Law (UNCITRAL) 6.005
arbitral proceeding. Not only is the hearing confidential but the award and the reasons list opportunity to present or argue a point before the arbitral tribunal and not subject
(1) The object of this ordinance is to facilitate the fair and speedy resolution prepared the Model Law on International Commercial Arbitration (UNCITRAL
for the award would also remain confidential. This is expressly provided by Arbitration to any appellate procedures.
of disputes by arbitration without unnecessary expense. Model Law). The UNCITRAL Model Law was eventually adopted on 21 June 1985.
Ordinance s. 18:
Technically, the UNCITRAL Model Law is not a law enforceable or binding in a
(2) This Ordinance is based on the principles—
particular jurisdiction, but individual member states of the United Nations are free to
18. Disclosure of information relating to arbitral proceedings and awards
(a) that, subject to the observance of the safeguards that are necessary adopt the UNCITRAL Model Law in their domestic legislation. In Hong Kong, as we 4. Ad hoc and Institutional Arbitration
prohibited
in the public interest, the parties to a dispute should be free to agree will see in the following chapters, the Arbitration Ordinance almost entirely adopted
on how the dispute should be resolved; and the UNCITRAL Model Law. (1) Unless otherwise agreed by the parties, no party may publish, disclose As mentioned,6 one of the major advantages of arbitration is that the parties are free 6.013
or communicate any information relating to— to decide on the applicable rules and the methods in resolving the disputes between
(b) that the court should intervene in the arbitration of a dispute only as
expressly provided for in this Ordinance. (a) The arbitral proceedings under the arbitration agreement; or themselves. It is free for a party not to stipulate any rules or arbitral institution
2. Advantages of Arbitration applicable to their arbitration if they so wish. In those circumstances, the parties would
(b) An award made in those arbitral proceedings. then stipulate their own rules for constituting the arbitral tribunal, taking evidence,
6.004 The Arbitration Ordinance is divided into 14 parts:
One of the major advantages that arbitration has over other means of alternative dispute 6.006 disclosure and all other aspects of the arbitration. This is commonly refereed to as ad
resolution is its finality and binding nature. Whilst a mediated settlement agreement 6.009 The advantages discussed in this section are by no means an exhaustive list. In summary, hoc arbitration.
Part 1 deals with preliminary matters, namely, the object and principle of arbitration
may be legally binding on the other party as a contract, a party who dishonoured the arbitration provides a flexible and confidential environment in which the parties have tbe
and the application of the UNCITRAL Model Law2 in Hong Kong. choice of how their dispute should be resolved. They are free to decide on the choice of Tbe parties may elect to stipulate in their arbitration agreement that the arbitration they 6.014
mediated settlement agreement would still be able to drag the other into litigation and
Part 2 deals with general principles that apply in arbitration. Importantly, it stipulate* dispute the terms and the formation of the contractual agreement. Unlike other forms law, the institutional rules, if any, applicable in the proceedings and the constitution of "■ould commence in case of a dispute would be governed by an arbitral institution
the extent to which the court may intervene in an arbitral proceeding and • of dispute-resolution mechanism, the award of an arbitral tribunal is final, binding and the arbitral tribunal. These are all attractive features which commercial entities admire Tbey may also adopt the rules of arbitration of an arbitral institution, but not referring
party would lose its rights to object if they decide not to take a point and may be enforced as if it is a judgment of the court.2 Thus, arbitration is essentially an and therefore prefer arbitration over litigation or any other means of dispute resolution * dispute to the institution. In case they elect to stipulate an institution to handle their
continue to participate in the course of an arbitration. effective substitute of the court that may give a decision with the same effect. The dispute, this would be refereed to as institutional arbitration.
Arbitration Ordinance only provides a confined, restrictive and exhaustive number of The institution itself is not the body that would actually adjudicate the miner for the 6.015
Part 3 deals with the requirement of an arbitration agreement and the court’s power 3. Disadvantages of Arbitration
pounds for which the court may set aside an award or refuse enforcing it. The process Forties. Rather, it is the arbitrators who will adjudicate. The institution merely provides
if a party embarks on the course of litigation despite the existence of *n
of challenging an award is also much more difficult and with a much higher cost by •dniinistrative supports and services for ihe appointment of the arbitral tribunal,
arbitration agreement. ^ fact that an unsuccessful party would be subject to assessment of its costs on an 6.010 One of the shortcomings that arbitration has is the delay between the occurrence of*
offering venues for the hearing and other secretarial services. It also follows that a
indemnity basis/ dispute and its actual resolution. Alongside the delay is, inevitably, the business and
Parts 4 and 5 deal with the composition of the arbitral tribunal and the wide-ranginj P*rty who opts for an institutional arbitration would need to pay the arbitral institution
legal costs that flow from it In order to afford a reasonable opportunity for the parties
power conferred in the hands of the arbitral tribunal. Arbitration is more preferable over litigation as the parties would be at liberty to 6.007 to present their case, arbitral tribunals, unlike courts, are more willing to offer extension
Part 6 deals with the interim measures and preliminary orders made by the arbitral choose the arbitral tribunal. Unlike litigation where legally trained judges are randomly of time to the parties in drafting their pleadings or case for the arbitral proceedings*
tribunal and/or the court. •located to preside over a cause of action, the parties in arbitration would have a say as making application for discovery or preparation for an argument. Whilst this affords
the parties a more flexible approach on the procedures, the other side of the coin would I t

inevitably be an increase of cost and time required. S** P*n.6.007

’ OrdouDC* 114
1 SMpaneOOS S«P»ruI106*-l2 070
 IM WHAT IS ARBITRATION?
And / "ill establish my covenant with you; neither shall all flesh be cut off
the requisite feet stipulated in their rules. Some well-known international arbitrd Chapter 7 ary more by the waters of a flood; neither shall there any more be a flood to
institution includes the following: destroy the earth. (Genesis 9:11)

(1) International Chamber of Commerce;

THE ARBITRATION AGREEMENT
(2) I .ondon Court of International Arbitration; 1. Statutory Requirement for Agreement to Arbitrate

(3) China International, Economic, and Trade Arbitration Commission ('t’HWfl! Para.
Arbitration Ordinance (Cap.609) Part 3 provides a framework as to bow parties may 7.001
1. Statutory Requirement for Agreement to Arbitrate............... ............................. 7.001 eater into an arbitration agreement The legislature has adopted Option I of art 7 of the
(4) American Arbitration Association; and 2. Rules for the Construction of the Arbitration Agreement.............. ..... 7.005 UNdlRAL Model Law:1

(3) Singapore International Arbitration Centre, (a) An informed bystander with all the background knowledge... .... 7.006
19. Article 7 of UNCI 1 HAL Model Law (Definition and form of arbitration
(b) Presumption of consistency and coherence when different
agreement)
6.016 In Hong Kong, the Hong Kong International Arbitration Centre was established in 1915 clauses deal with a similar topic............ ................... ................. ..... 7.013
and is one of the main arbitral institutions that provides arbitration services. (c) Presumption for an intention to create a binding obligation.... „„ 7.015 (1) Option I of Article 7 of the UNCI IRAL Model Law, the text of which
is set out below, has effect—
(d) Presumption of party autonomy_________________________ 7.016
(e) Conferring natural meanings to words................................. . 7.019 "Option I
5. Conclusion
(f) Presumption of no absurdity......... ••»•**•**• _ 7.020 Article 7. Definition andform of arbitration agreement
6.017 This chapter aims at giving a general outline of arbitration. The following chapters will (f) Presumption of “one-stop" jurisdiction ....7.024
(1) 'Arbitration agreement’ is an agreement by the parties to submit
be dedicated exclusively to arbitration and will cover the following areas: 3. Injunction to Stay Court Action................... .... 7.026 to arbitration all or certain disputes which have arisen on which
(a) Court's mandatory obligation to stay court action ....7.026 may arise between them in respect of a defined legal relationship,
7 examines the rules governing the arbitration agreement and the statutory
whether contractual or not. An arbitration agreement may be in
11

requirements of a valid arbitration agreement. (b) Test of prim afacie or arguable case........................................................ .... 7.029
the form of an arbitration clause in a contract or in the form of a
(i) Question 1: Is the clause in question an arbitration agreement?. .... 7.033
8 addresses the issue of how an arbitral tribunal will be constituted and separate agreement
(ii) Question 2: Is the arbitration agreement null and void,
the court or arbitral institution’s role in doing so. It will then turn to
inoperative or incapable of being performed?.. .... 7.036 (2) The arbitration agreement shall be in writing.
examine the grounds and procedures of removing an arbitrator and
circumstances which might give rise to a challenge. A. Expressly referring to “arbitration".............. .... 7.041 (3) An arbitration agreement is in writing if its content is recorded in
D. Mingling the court and the arbitral tribunal. .... 7.044 any form, whether or not the arbitration agreement or contract has
9 is devoted to the hearing of an arbitration itself, starting from tbs
C. Choice to arbitrate or to litigate,• •••••••••••• .... 7.046 been concluded orally, by conduct, or by other means.
commencement of the arbitration, discovery and the taking of evidence
D. Inconsistent heading and content.................. ....... ..... 7.055 (4) The requirement that an arbitration agreement be in writing is
10 focuses on the interim remedies that a court or an arbitral tribunal will
in

E. A non-existing arbitration institution.. ... 7.057 met by an electronic communication if the information contained
be able to order.
(Hi) Question 3: Is there in reality a dispute or difference therein is accessible so as to be useable for subsequent reference,
11 concentrates on examining the formal and substantial requirement d between the parties? .... 7.058 ‘electronic communication' means any communication that the
an award It will also examine how the arbitral tribunal will deal (rv) Question 4: Is the dispute or difference between the parties parties make by means of data messages; ’data message’ means
consequential matters of an arbitral tribunal. within the ambit of the arbitration agreement?....................... .... 7.061 information generated, sent, received or stored by electronic,
magnetic, optical or similar means, including, but not limited
Chapter 12 discusses the recourse a party may take against an award, tbc Separability of the Arbitration Agreement......... .. 7.069 to, electronic data interchange (EDI), electronic mail, telegram,
enforcement and resisting enforcement of the award.
Challenging Jurisdiction of the Arbitral Tribunal .................................... ............ 7.076 telex or telecopy.
(*) Statutory power of the arbitral tribunal 7.076 (5) Furthermore, an arbitration agreement is in writing if it is contained
fl>) Doctrine of kompetenz-kompeiem (competence-competence) ......... 7.077 in an exchange of statements of claim and defence in which the
(c) Court’s intervention in ruling ofjurisdiction.......... .............. ..................... 7.081 existence of an agreement is alleged by one party and not denied
(d) Duty on parties to object....... ......................................................... ............ 7.084 by the other.
 RULES FOR THE CONSTRUCTION OF THE ARBITRATION AGREEMENT l®7
106 THE ARBITRATION AGREEMENT
104 THE ARBITRATION AGREEMENT
RULES FOR TIIE CONSTRUCTION OF THE ARBITRATION AGREEMENT 105
mentioned next, it includes absolutely anything which would have affected Credit and Commerce International SA v Ali,'* Kirin-Amgen Inc v Hoechst Marion
(6) The reference in a contract to any document containing aa Roussel Ltd15 and Jumbo King Ltd v Faithful Properties Ltcf*) but said that in some
arbitration agreement must be definite* and involve a clear reference to the arbitration the way in which the language of the document would have been understood
arbitration clause constitutes an arbitration agreement in writing, cases the context and background drove a court to the conclusion that something
in case any disputes arise between the parties.7 If the arbitration agreement does not by a reasonable man.
provided that the reference is such as to make that clause part of i must have gone wrong with the language. In such a case, the law did not require a
have a clear reference to arbitration, the court would then be forced to conclude (3) The law excludes from the admissible background the previous negotiations court to attribute to the parties an intention which a reasonable person would not
the contract."
that there was no arbitration agreement between the parties at all.1 In construing the of the parties and their declarations of subjective intent. They are admissible
(2) Without affecting subsection (1), an arbitration agreement is in writing have understood them to have had.”
arbitration agreement, the court would seek to give effect to the parties’ intention only in an action for rectification. The law makes this distinction for reasons
if— and to allow the tribunal with the fullest jurisdiction except in the case where of practical policy and, in this respect only, legal interpretation differs from In Rainy Sky SA v Kookmin Bank,'1 Lord Clarke held that: 7.008
tbe wordings of the arbitration agreement are in what can be said as “hopeless the way we would interpret utterances in ordinary life. The boundaries of
(a) the agreement is a document, whether or not the document is
confusion".* When construing the arbitration agreement, the court would not (and this exception are in some respects unclear. But this is not the occasion on “[21] The language used by the parties will often have more than one potential
signed by the parties to the agreement; or
should not) make any presumption in favour of the dispute to be determined by way
which to explore them. meaning. I would accept the submission made on behalf of the appellants
(b) the agreement, although made otherwise than in writing, is of arbitration.10
that the exercise of construction is essentially one unitary exercise in which
recorded by one of the parties to the agreement, or by a third party, (4) The meaning which a document (or any other utterance) would convey to
the court must consider the language used and ascertain what a reasonable
with the authority of each of the parties to the agreement. a reasonable man is not the same thing as the meaning of its words. Tbe
person, that is a person who has all the background knowledge which would
meaning of words is a matter of dictionaries and grammars; the meaning
(3) A reference in an agreement to a written form of arbitration clause 2. Rules for the Construction of the
of the document is what the parties using those words against the relevant
reasonably have been available to the parties in the situation in which
constitutes an arbitration agreement if the reference is such as to make Arbitration Agreement they were at the time of the contract, would have understood the parties
background would reasonably have been understood to mean. The
that clause part of the agreement. background may not merely enable the reasonable man to choose between the to have meant. In doing so, the court must have regard to all the relevant
An arbitration agreement should be construed using the usual and common law rules of 7.005 surrounding circumstances. If there are two possible constructions, the
possible meanings of words which arc ambiguous but even (as occasionally
7.002 An arbitration agreement is essentially a contractual promise between the promisee and construction. To avoid the risk of overburdening this chapter and hence losing focus, court is entitled to prefer the construction which is consistent with business
happens in ordinary life) to conclude that the parties must, for whatever
the promisor to oust the jurisdiction of the court in determining all or part of a dispute, this section would only deal with the leading principles that govern the interpretation common sense and to reject the other."
reason, have used the wrong words or syntax. (See Mannai Investment Co
and parties voluntarily compel themselves into resolving it by arbitration. The element of an arbitration agreement. Ltd v Eagle Star Life Assurance Co Ltd.'2)
of compulsion in the arbitration agreement means that if a dispute resolution clause Citing Chartbrook Ud v Persimmon Homes Ltd, Lord Neuberger said in Arnold v 7.009
provides on option for the parties to elect whether to resolve the matter by litigation or (5) The ’rule’ that words should be given their ‘natural and ordinary meaning'
(a) An informed bystander with all the background knowledge Britton" that:
arbitration, it would not be an arbitration agreement.1 It is clear from UNCITRAL Model reflects the common sense proposition that we do not easily accept that
Law art.7 that an arbitration agreement can be an arbitration clause (one of the many The modem starting point of construction is that the court should construe the 7.006 people have made linguistic mistakes, particularly in formal documents. “[ 15] When interpreting a written contract, the court is concerned to identify the
clauses in a contract) where the parties agTee that future disputes would be submitted arbitration agreement from a standpoint of what a reasonable and informed bystander On the other hand, if one would nevertheless conclude from the background intention of the parties by reference to “what a reasonable person having all
for arbitration. Alternatively, it can also be a separate and distinct contractual arbitration will consider the language used mean, given that he has been provided with all the that something must have gone wrong with the language, the law does not the background knowledge which would have been available to the parties
background knowledge. This background information was often known as the “factual require judges to attribute to the parties an intention which they plainly
agreement in which the parties agree to submit disputes existing for determination by would have understood them to be using the language in the contract to
an arbitral tribunal. Whichever form it takes, it still falls under the definition of «n matrix” as summarised by Lord Hoffmann in Investors Compensation Scheme Ltd v could not have had. Lord Diplock made this point more vigorously when mean”, to quote Lord Hoffmann in Chartbrook Ud v Persimmon Homes
arbitration agreement under the UNCITRAL Model Law. fPej/ Bromwich Building Society he said in The Antaios Compania Naviera SA v Salen Rederiema AB Ltd.'9 And it docs so by focussing on the meaning of the relevant words, in
(1985] 1 AC 191,201: this case clause 3(2) of each of the 25 leases, in their documentary, factual
7.003 Save for the prerequisite that it must contain an element of compulsion, the court hu “(1) Interpretation is the ascertainment of the meaning which the document
‘... if detailed semantic and syntactical analysis of words in a commercial contract and commercial context. That meaning has to be assessed in the light of
been relatively liberal as to the form and actual wordings of the dispute resolution would convey to a reasonable person having all the background knowledge
clause. UNCITRAL Model Law art.7 gives a very wide and liberal interpretation is going to lead to a conclusion that flouts business commonsense, it must be made (i) the natural and ordinary meaning of the clause, (ii) any other relevant
which would reasonably have been available to the parties in the situation in provisions of the lease, (iii) the overall purpose of the clause and the lease,
of how a “written" dispute resolution clause can be construed.’ As long as there is which they were at the time of the contracL to yield to business commonsense.’”
(iv) the facts and circumstances known or assumed by the parties at the time
something in writing to prove the existence of a contractual promise amongst the
(2) The background was famously referred to by Lord Wilberforce as the 7.007 Building on top of Investors Compensation Scheme Ltd v West Bromwich Building that the document was executed, and (v) commercial common sense, but
parties to refer the matter for arbitration, the court would be prepared to construe it
liberally.4 ‘matrix of fact,’ but this phrase is, if anything, an understated description of Society, Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd'i held that: (vi) disregarding subjective evideuce of any party’s intentions. In this
what the background may include. Subject to the requirement that it should connection, see Prenn at pp 1384-1386 and Reardon Smith Line Ltd v
7.004 That said, the court still demands that an arbitration agreement should be clear have been reasonably available to the parties and to the exception to be Yngvar Hansen-Tangen (trading as HE Hansen-Tangen),20 Bank of Credit
"... It is agreed that the question is what a reasonable person having all tbe
and unequivocal before it would be enforceable.5 The terms and particulars of tbe background knowledge which would have been available to the parties would
have understood them to be using the language in the contract to mean. The House
‘ Loth Parmtnhip Ud » Atntme Kacecoune Co Lid [2000] CLC 431.
b***d RUron Hoorn Ltd v Surrey Semcej Ltd (2001) 1 AD ER (Comm) 449. emphasised that we do not easily accept that people have made linguistic mistakes,
• Sm Tbmmi CP £» <1 Co v U A Fung (Trading) LiJ (2003) I HKC 411, T*Ao Alummlum (TUshan) Co Ud y particularly in formal documents (similar statements will be found in Bank of (1002) 1 AC 251. 269
AS Midaii y Al Mtdant (1999) I Uayd'i Rep 923. Fhght Training International Inc v International Fin Training [7005) 1 AUER 667.6*1-612
ANmmuwm tj Co Ltd(ltCA 191 WOOS. (2006) HKEC 407). Incorporated 0»n<n o/Wing Fat BntUbnt
, &l»pmeni Ud (2004) 2 All ER (Cobb) 56»
WO Strrm V Golden Rue <HK) Prefect Co Ud (DCCJ 2250016, [1016] HKEC 1492) (1999) 2 HKCFAR 279.296
B S** Ruuell on Arbitration pan. 2-077.
• Sm aim Gm Commotions PnUdv Caledonim 1Mimon (Building!) Lid (1993)2 HKLR 35. Fat Tat Engineering C‘
O'er*ecu Omen /imrwfi Ud r AA Mutual International hmrxmce Co Ud [1914] 2 Lloyd'i Rep 63. London
Poll] UKSC 50 (Lord a«ka).
Ud y Sm Chong Ceeurructioei A Engineering Co Ltd (DCCJ 305/2009, (2009) HKEC 1000) 12015) AC 1619
U'idtrgmiind Ud v Cityhnk Telecommunication! Ud (2007) 2 AD ER (Comm) 694, Golden Ocean Group Ud v Humpias
• Pacific kaontattomd Loot (Pit) Ltd v Jbinhen AW. W Mineral! Co (HK) Lid (1993) 2 HKLR 249. **** (1997) AC 749 [1009) 1 AC 1101.1106D(Lo*d Hoffinmm)
htnnaJa Trimspocra* Tbk Ud (2013) 2 All ER (Comm) 1025. (5*). Ran*arm Pictures Inc r Lombard-Knight (2014) 11976) 1 WLR 919.995-997 (Lord Wnbtrforc*)
EUcrmma (WQ Ltd* Actor*, Component! Chma Ud(DCCJ 56160006. (2007) HKEC 1617). „ B«LR1196,p4) II (2009) 1 AC 1101. (14) (Lord Hoffmmn)
• LG Cdht* GmCoUdv China National Petroleum Corp (2001) I WLR 1192
ftWt] 1 WLR 496.
 110 THE ARBITRATION AGREEMENT RULES FOR THE CONSTRUCTION OF THE ARBITRATION AGREEMENT 111
IM THE ARBITRATION AGREEMENT RULES FOR THE CONSTRUCTION OF THE ARBITRATION AGREEMENT 109

is to presume that those clauses are “expressing the parties’ intentions in a consistent The presumption of party autonomy would also mean that the court would try its best 7.017
and Commerce International SA v Ali11 and the survey of more recent to be a very imprudent term for one of the parties to have agreed, even and coherent manner’’52 and that only in the case of a “clear and irreconcilable to give effect to what the parties have concluded, nothing more and nothing less. Lord
authorities in Rainy Sky22... ignoring the benefit of wisdom of hindsight. The purpose of interpretation discrepancy would it be necessary to resort to the contractual order of precedence to Morris in L Schuler AG v Wickman Machine Tool Sales Ltd59 said that:
is to identify what the parties have agreed, not what the court thinks that resolve it”.
[17] First, the reliance placed in some cases on commercial common sense and
they should have agreed. Experience shows that it is by no means unknown “If it is clear what they have agreed a court will not be influenced by any suggestion
surrounding circumstances (eg in Chartbrook“) should not be invoked to 7.014 Nonetheless, whilst there are apparent inconsistency or contradictory provisions, the
for people to enter into arrangements which arc ill-advised, even ignoring that they would have been wiser to have made a different agreement If a word
undervalue the importance of the language of the provision which is to be court would endeavour to construe them so as to read all the provisions consistently.
the benefit of wisdom of hindsight, and it is not the function of a court employed by the parties in a contract can have only one possible meaning then,
construed. The exercise of interpreting a provision involves identifying This presumption, sometimes known as ut res magis valeat quant pereat, also extends
when interpreting an agreement to relieve a party from the consequences of unless any question of rectification arises, there will be no problem. If a word either
what the parties meant through the eyes of a reasonable reader, and, save to the fact that the court would construe a contractual term in favour of validity rather
his imprudence or poor advice. Accordingly, when interpreting a contract a by reason of general acceptance or by reason of judicial construction has come to
perhaps in a very unusual case, that meaning is most obviously to be than invalidity. This is particularly so if the clause is an arbitration agreement.” In AXA
judge should avoid re-writing it in an attempt to assist an unwise party or to have a particular meaning then, if used in a business or technical document, it
gleaned from the language of the provision. Unlike commercial common Rev Ace Global Markets Ltd,1* the court held that it would not discourage or rule out
penalise an astute party.” will often be reasonable to suppose that the parties intended to use the word in its
sense and the surrounding circumstances, the parlies have control ova the possibility that commercial contracts were drafted in a “belt and braces approach".
the language they use in a contract. And, again save perhaps in a very accepted sense. But if a word in a contract may have more than one meaning then,
Lord Wilberforce expressed similar sentiments in Reardon Smith Line Ltd v Yngyar 7.010 To use Gloster J’s words, “there is no presumption against surplusage in a commercial
unusual case, the parties must have been specifically focussing on in interpreting the contract, a court will have to decide what was the intention of
Hans en- Tangen:M contract”.35
the issue covered by the provision when agreeing the wording of that the parties as revealed by or deduced from the terms and subject matter of their
provision. contract”
“No contracts are made in a vacuum: there is always a setting in which they have to (c) Presumption for an intention to create a binding obligation
[18] Secondly, when it comes to considering the centrally relevant words to be be placed. The nature of what is legitimate to have regard to is usually described as 7.015 The court would make such presumption as it is according to commercial commoo Similarly, in Charter Reinsurance Co Ltd v Fagan,*0 Lord Mustill said that: 7.018
interpreted, I accept that the less clear they are, or, to put it another way, the “the surrounding circumstances" but this phrase is imprecise: it can be illustrated sense. Courts would be reluctant to come to a conclusion that the parties have failed is
worse their drafting, the more ready the court can properly be to depart from but hardly defined. In a commercial contract it is certainly right that the court their obvious intention to create a binding obligation.30 An arbitration agreement that “There comes a point at which the court should remind itself that the task is to
their natural meaning. That is simply the obverse of the sensible proposition should know the commercial purpose of the contract and this in turn presupposes is difficult to interpret and construct is not the same as ambiguity of meaning. As long discover what the parties meant from what they have said, and that to force upon
that the clearer the natural meaning the more difficult it is to justify departing knowledge of the genesis of the transaction, the background, the context, the as the definite meaning of an arbitration agreement can be extracted, a court will give the words a meaning which they cannot fairly bear is to substitute for the bargain
from it. However, that does not justify the court embarking on an exercise market in which the parties are operating.” effect to the same. The arbitration agreement would only be void for uncertainty if it if actually made one which the court believes could better have been made. This is
of searching for, let alone constructing, drafting infelicities in order to legally or practically impossible to give the agreement (or any part of it) any practical an illegitimate role for a court. Particularly in the field of commerce, where the
facilitate a departure from the natural meaning. If there is a specific error When considering the intention of the parties, Lord Wilberforce readily accepts that 7.011 content.37 parties need to know what they must do and what they can insist on not doing, it
in the drafting, it may often have no relevance to the issue of interpretation this has to be done objectively as the parties cannot themselves give direct evidence of is essential for them to be confident that they can rely on the court to enforce their
which the court has to resolve. their intention. This, then, has to be ascertained by considering what reasonable people (d) Presumption of party autonomy contract according to its terms.”
would have in their mind if placed in the situation of the parties.27
[19] The third point I should mention is that commercial common sense is not 7.016 The court should uphold and respect party’s autonomy. This means that the court would
to be invoked retrospectively. The mere fact that a contractual arrangement, Nonetheless, when construing a written agreement, the court should not go so far as 7.012 endeavour to give effect to whatever the parties agreed insofar as it is practicable. Sir (e) Conferring natural meanings to words
if interpreted according to its natural language, has worked out badly, or to investigate the intention of the parties. The “factual matrix” should be restricted John Donaldson MR in The Epaphus31 said that: When construing a contractual clause, the court should give the “ordinary and natural 7,019
even disastrously, for one of the parties is not a reason for departing from to the evidence of the factual background known to the parties at or before the date
meaning” of the words. In Charter Reinsurance Co Ltd v Fagan*' Lord Mustill
the natural language. Commercial common sense is only relevant to the of the contract.2* Subsequent actions of the parties are not relevant29 Parties’ position “My starting point is that parties to a contract are free to agree upon any terms said that:
extent of how matters would or could have been perceived by the parties, often changes in the course of negotiation until there is a final agreement Thus, it is which they consider appropriate, including a term requiring one of the parties to
or by reasonable people in the position of the parties, as at the date that only the final document (the written contract) which records a consensus of the parties. do the impossible, although it would be highly unusual for parties knowingly to
The investigation of the parties’ intention behind the written contract would simply be “I believe that most expressions do have a natural meaning, in the sense of their
the contract was made. Judicial observations such as those of Lord Reid to agree. If they do so agree and if, as is inevitable, he fails to perform, he will be
primary meaning in ordinary speech. Certainly, there are occasions where direct
in L Schuler AG v Rickman Machine Tods Sales Ltd1* and Lord Diplock unhelpful.*0 liable in damages. That said, any court will hesitate for a long time before holding
in Antaios Compania Naviera SA v Salen Rederiema AB (The Antaios)? recourse to such a meaning is inappropriate. Thus, the word may come from a
that as a matter of construction, the parties have contracted for the impossible,
specialist vocabulary and have no significance in ordinary speech. Or it may have
quoted by Lord Carnwath at para 110, have to be read and applied bearing (b) Presumption of consistency and coherence when different particularly in a commercial contract Parties to such contracts can be expected to
one meaning in common speech and another in a specialist vocabulary; and the
that important point in mind. clauses deal with a similar topic contemplate performance, not breach.”
context may show that the author of the document in which it appears intended it
[20] Fourthly, while commercial common sense is a very important factor to take In RWE Npower Renewables Ltd v JN Bentley Ltd1' Moore-Bick LJ held that the 7.013 to be understood in the latter sense. Subject to this, however, the inquiry will start,
into account when interpreting a contract, a court should be very slow to starting point in dealing with contracts that contain different clauses on the same topic and usually finish, by asking what is the ordinary meaning of the words used.”
" Ibid, [15].
reject the natural meaning of a provision as correct simply because it appeal " Fiona Trust A Holding Corp * Pnralov [2007] 4 All ER 951.
" [2006] Lloyd’* Rep IR 613 ((Hotter J, n Giotto- LJ then «n**X
11976] l WLA 9*9 * Ibid . 132]
* TUd * Aslor Management AG r Alalcna Mirrtrrg pic [2017] Bn* LR 1634 „ 1*974] AC 235.256A
■ (2002] I AC231. [I] 'Lari Bo^hts) “ FrrnmvSimm* [1971] 1WLA13I1. 1315 (Lord R«!> , 1*997] AC 313, 3IIC-D
" Associated British Ports r Ta*o Steel UKUd[70\l\ 1 AH ER (Com) 170.
■ P0I)| UX5C 30. (31)—(30) L Sdm/er AG r IHchmm Hod** Tboi Sola Ud [1974] AC 235. «* al*> Watcham r Attonm^Genend ofEon Afrca " [1917] 2 Uoytf. R«p 215.211-219. *0»4B-F
■ [3009] 1 AC!IOI.[l<H2t) B ^•aermo [1919] AC 533. James Hitter A Penmen Lid * Whitworth Sorer Estates (Matchertr) Ud [1970] AC 513
- |ir4|Ac:jj.2ji. # FnrmrSimmcnds [1971] 1 WLA 1311.13 MO (Lord Rn<5>
■ fltfS] AC 191. 201. POHJEWCAQvlSO
 114 THE ARBITRATION AGREEMENT INJUNCTION TO STAY COURT ACTION 115
112 Tin: ARBITRATION AGREEMENT INJUNCTION TO STAY COURT ACTION 113

(0 Presumption of no absurdity (2) Where an action referred to in paragraph (1) of this article has been irbitration.” The court, still, has an inherent jurisdiction to stay tbe proceedings and
be obvious that he is referring to one’s wife, even if she is in fact called Jane
brought, arbitral proceedings may nevertheless be commenced or refer the case to arbitration where it considers it fit to do so.34
One may even, to avoid embarrassment, answer ‘Very well, thank you’ without
7.020 The court would presume that no parlies would enter into a contract that leads to dear continued, and an award may be made, while the issue is pending
drawing attention to his mistake. The message has been unambiguously received
absurdity and is against business common sense. If a particular form of construction before the court.” (b) Test of prima fade or arguable case
and understood.”
would lead to a very unreasonable result, this must be a relevant consideration that the
The burden of proving the existence of the arbitration agreement is on the party 7.029
court should take into account. The more unreasonable the result is, the more unlikely H
Giving a purposive interpretation to the clause in light of the knowledge and 7.023 (usually the defendant) who intends to apply for a stay.37 Fundamentally, the party
is for the parties to have intended that to happen and, therefore, the court would presume (5) If the court refers the parties in an action to arbitration, it must make a
understanding of the parties, the court would then have no difficulty in properly invoking the arbitration agreement must, first, demonstrate that there is in fact an
that they must have made their intention abundantly clear so that such interpretation order stating the legal action in that action.
constructing a clause which might, at first sight, give an absurd result. irbitration agreement in existence." Then, it is upon that party to demonstrate to tbe
could be justified.43
court that there is a prima facie or plainly arguable case that the parties were bound by
7.021 Albeit a court would not easily accept that something was wrong in the contract,4’ if the (g) Presumption of “one-stop” Jurisdiction to arbitration agreement." It should be noted that the standard of proof of the applicant
(8) A decision of the court to refer the parlies to arbitration under—
context and background drove him to come to a conclusion that something had gone for stay of proceeding is a low one. As the Chancery Division of the English High
In the context of arbitration agreement, numerous local and English authorities held 7.024
wrong with the language of a contract, the law did not require it to be attributed to the (a) article 8 of the UNCITRAL Model Law, given effect to by Court noted in Mitchell v Morris40 when commenting on the English counterpart of
that the court should give effect to the "one-stop" jurisdiction presumption held in subsection (1); or Arbitration Ordinance s.20 that:
parties, an intention which no reasonable person (or reasonable businessmen) would
Fiona Trust & Holding Corp v Privalov.**
have understood them to have.44 (b) subsection (2)
Nonetheless, in Trust Risk Group SpA v AmTYust Europe Ltd*1 R cat son LJ held that 7.025 "... [the legislature] had responded to the needs of the commercial world, or such
7.022 When it comes to the point that an interpretation on the plain and ordinary meaning is not subject to appeal. of that world as supports arbitration, and has required the stay of proceedings, even
■Ithough this is a useful starling point, this is not a conclusive presumption. His Lordship
of the words would inevitably lead to an absurd result, the court should then proceed when there is no real dispute, so long as there is an assertion of a dispute.”
noted that where the overall contractual agreements contain two or more differently (9) The leave of the court making a decision to refuse to refer the parlies to
to consider whether the clause had used the wrong words. Lord Hoffmann had most
expressed choices of jurisdiction and/or law in respect of different agreements, the arbitration under—
vividly explained the matter in Mannai Investments Co Ltd v Eagle Star Life Assurance In Crowther v Rayment,“ the court was invited by the respondent to adopt the test of 7.030
court would have to constmct each of those contractual agreements separately and not
Co Ltd * (a) article 8 of the UNCITRAL Model Law, given effect to by whether there was a “good arguable case" when considering whether to stay the court
dispense merely by way of the presumption.44
subsection (1); or proceedings in favour of arbitration. In rejecting this contention, Andrew Smith J held
“I propose to begin by examining the way we interpret utterances in everyday that:
(b) subsection (2)
life. It is a matter of constant experience that people can convey their meaning
3. Injunction to Stay Court Action
unambiguously although they have used the wrong words. We start with an is required for any appeal from that decision. "To my mind proper regard for the kompetenz-kompetenz principle requires that
assumption that people will use words and grammar in a conventional way but the court refrains from anticipating a decision that might be made by the tribunal,
(a) Court’s mandatory obligation to stay court action
quite often it becomes obvious that, for one reason or another, they are not doing 7.027 The basic working principle is for the court to, first, look at UNCITRAL Model Law unless the applicant's claim to be party to a relevant arbitration agreement can be
so nnd we adjust our interpretation of what they are saying accordingly. We do so In light of this element of compulsion, UNCITRAL Model Law art.84’ mandated the 7.026 art.7,50 and, second, at the basic principles set out under UNCITRAL Model rejected as having no real prospect of success or (which to my mind amounts to the
in order to make sense of their utterance: so that the different parts of the sentence court to stay any substantive claim brought before the court if the cause of action is Law art.8.31 Once those requirements are satisfied, the court is bound to order a stay same thing) would not raise a serious issue. Otherwise the principle demands that
fit together in a coherent way and also to enable the sentence to fit the background subject to an arbitration clause: to the action before the court.32 The court has developed the practice that a failure the court enforce any arbitration agreement that the parties might have made and
of facts which plays an indispensable part in the way we interpret what anyone is to resist a stay of the action before the court would result in the plaintiff paying the leave it to the tribunal to determine the issues in the first instance.”
saying. No one, for example, has any difficulty in understanding Mrs Malaprop 20. Article 8 of UNCITRAL Model Law (Arbitration agreement and defendant's costs on an indemnity basis, rather than costs being in the cause of tbe
When she says ‘She is as obstinate as an allegory on the banks of the Nile,’ we substantive claim before court) arbitration.” In any event, once the court is satisfied that there is prima facie an arguable case that 7.031
reject the conventional or literal meaning of allegory as making nonsense of the the parties are bound by the arbitration agreement, the imperative requirement of
(1) Article 8 of the UNCITRAL Model Law, the text of which is set out 7.028 UNCITRAL Model Law art.7 gives a time stipulation that a party intending to refer
sentence and substitute ‘alligator’ by using our background knowledge of the UNCITRAL Model Law art. 8 compels the court not to take the matter out of the hands
below, has effect— the matter to the arbitration should raise this matter no later than submitting the fir*
things likely to be found on the banks of the Nile and choosing one which sounds
statement on the substance of dispute. The parties are under the obligation to strictly
rather like ‘allegory.’ “Article 8 Arbitration agreement and substantive claim before court comply with the time requirement and a failure to do so may render the arbitral tribun*!
* Grwedeur Electrical Co Ltd r Chemf Kee Fung Chewrt Censimcfion Co Ltd (2006) 3 HKLRD 535
Mrs Malaprop’s problem was an imperfect understanding of the conventional (1) A court before which an action is brought in a matter which is the and the court to refuse to entertain those complaints.34 Nonetheless, it is still open ft* * tlct Interior Design A Engineering Co Ltd v Fomme World Enterprises Ltd (2010) 2 HKC 360
meanings of English words. But the reason for the mistake does not really matter subject of an arbitration agreement shall, if a party so requests not the parties to apply to the arbitrator for an extension of time and refer the matter to < Foctfit Crown Engineering Ltd r Hwmdat Engineering & Conunrcnon Co Ltd (2003) 3 HKLRD 440
We use the same process of adjustment when people have made mistakes about later than when submitting his first statement on the substance foladm Agricultural Ltd v E reelnor Hotel Ltd (2001) 2 HKC 215. Pacific Croun Engineering Ltd r Hiundm Engineering
* Construction Co Ltd [200}] 3 HKLRD 440. Incorporated Ownen of Wing Fat Building, Shui Wo Snoot v Gotdm Hue
names or descriptions or days or times because they have forgotten or become of the dispute, refer the parties to arbitration unless it finds that . W) Frpfect Co Ltd(DCCJ 225/2016. (2016) HKEC 1492)
mixed up. If one meets an acquaintance and he says ‘And how is Mary?’ it the agreement is null and void, inoperative or incapable of being S** Pacific Croon Engineering Ltd * Hvmedal Engineering A Construction Co Ltd (2003) ) HKLRD 440. New Sowed
* Entrenched in Arbitration Ordm«>c«119 Ltd v Mehgo (HK) Ltd (2005) l HKC 41. Incorporated Owners of Sowers House v Sowers Co ltd (2005)
performed. 1 HKC 424. Party for Ctvec Rights mid Livelihood ofthe People ef Hong Kong Ltd v Chmo 7bch Surveyors Ltd (HCMF
51 Entrenched in Aihtn&oo Orduunce • 20
* Un Mint r Chmi S9m Qua* [2012] 2 HKUtD 347 B *01/2012. (2012) HKEC 1450) Re Quicksilver Glorious Sm JVLtd (2014) 4 HKLRD 759
° Cbmbtaco Intimation*! Phroltum (Stngoport) Pfi Ltd v Fwfh' Past Trading Ltd [2016] 1 HKLRD 512 , P°l*l EWHC 3*00 (Ck) (24) Sm ilio Holla Shipping Corp v Sept, Oils Ltd (1991) 1 WLR 726
L Schuler AG v MacKnee Toot Solos Ltd [1974J AC 235. 25IE (Lord R«d) P01J] Bug LR 690. (26)
* P<»7I4AI]ER95I, M CY 7bm Investment Co Ltd v Incorporated Owners of Hot 7b Court (HCSA 16/2003, [2004] HKEC101).
Saa tlto Bmet of Credit medCommerce fntematianal S.4 v Ah (2002) I AC 2S1. 269. Kirin-Amgen Mr v Hooch* *****
Roussel Ltd (2005) I AD EX 667.611-612. Jumbo Kmg Ltd v Faithful Propones Ltd (1999) 2 HKCFAR 279.296 „ 1^010) 1 All ER (Conn*) 325.
rMvtMvet Ltd v Persimmon Homes (2009) I AC 1101 (Lord Hoffmmnl . C,B“I Credit Suuso Fins Boston (Europe) Ltd » MLC (Bermuda) Ltd (1999) 1 Uoydi Rep 767. 777 (R« J)
(1*97) AC 749. 774D-F Eon inched ai Arbicrinoo Orduuaca i 20
 118 TIIE ARBITRATION AGREEMENT
Hi THE ARBITRATION AGREEMENT INJUNCTION TO STAY COURT ACTION 119
INJUNCTION TO STAY COURT ACTION 117
inconvenience or difficulty. A mere change of circumstances rendering arbitration entirely. In the recent case of Exmek Pharmaceuticals SAC vAlkem Laboratories Lxd,a
of the arbitrator, regardless of whether they are appointed or pending to be appointed.0 poultry Producers Association Ltd,10 in which it appears as “still somewhat jealously a less attractive mode of resolving a dispute or rendering the forum or procedural the parties entered into the following arbitration agreement:
When the court is unsure about where the jurisdiction lies, the sensible course is to guarded the right of citizens to have access to the courts". Ma J held that the current rules chosen for any reason unattractive, could never be enough. For a party who
leave the matter in the hands of the arbitrators." emphasis is on party autonomy with minimal interference by the courts and where parties has agreed to resolve any dispute by arbitration to be freed from his obligation “Article 13: Proper Law
have expressly agreed to refer disputes to be determined by arbitration. It is generally safe under s. 1(1) it is, in my judgment, necessary for him to show that the arbitration
12 In the leading authority Tommy CP Sze & Co v Li & Fung (hading) Ltd,64 Ma J"
to assume that it is their intention to have such disputes to be resolved only by arbitration. agreement simply cannot, with the best will in the world, be performed. I an The proper law of this Agreement is the law of the UK and the Parties submit to the
gave a very detailed analysis. Insofar as stay application is concerned, four general
satisfied that the words of exception should be strictly construed so as to reflect tbe exclusive jurisdiction of the Court of the UK and of all Courts having jurisdiction
questions are usually considered. Notice that the court is open to deal with the questions
(II) Question 2: Is the arbitration agreement null and void. intention of the Convention and the Act." in appeal from the Courts of the UK.
in whatever order seems efficient:
Inoperative or incapable of being performed?
Article 14: Arbitration
This stage of enquiry finds its root in UNCITRAL Model Law art. 8. Examples given 7.036 7.040 The use of the word “matter" is also to be construed widely. Autoridad del CantJ
(1) Is the clause in question an arbitration agreement? All disputes and differences whatsoever which will at any time hereafter arise
by the court are where the alleged agreement is void on the ground of public policy de Panama v Sacyr SA,n affirming the Australian decision in Tanning Research
(2) Is the arbitration agreement null and void, inoperative or incapable of being or frustrated. It was held unequivocally that the existence of a time bar has never between the parties in relation to this Agreement which the Parties using their best
Laboratories Inc v O'Brien,n held that in any context, “matter” is a word of “wide
performed? endeavours in good faith cannot resolve shall be referred to arbitration before any
been regarded as rendering the alleged agreement incapable of being performed. The import", and the context in which it is being considered is important.
legal proceedings are initiated. Tbe arbitration shall be conducted in the UK in
(3) Is there in reality a dispute or difference between the parties? thinking behind is that the arbitration can of course proceed, only that the claim is at
accordance with the provisions of the law in the UK in effect at the time of the
risk of being dismissed. A. Expressly referring to “arbitration”
(4) Is the dispute or difference between the parties within the ambit of the arbitration and shall be conducted by one or more arbitrators appointed there under."
In Smart Marine Co Ltd v Wong Chwig Fai,71 the applicant alleged that the signature to a 7.037 7.041 It might be thought that the term “arbitration" would be the fundamental and prerequisite
arbitration agreement? element that a dispute resolution clause should bear before it could properly be labelled
contract containing the arbitration agreement is forgery. The court considered that the forgery The claimant argued that the two articles are inconsistent and irreconcilable as art. 13 7.045
would, in those circumstances, make the arbitration agreement “null and void, inoperative as an arbitration clause. Nonetheless, it seems that the court would be willing to adopt confers exclusive jurisdiction to the court whilst art. 14 stipulates that disputes should
(I) Question 1: Is the clause In question an arbitration agreement? or incapable of being performed”. Nonetheless, one should not overlook the principle of a liberal and pro-arbitration conclusion even without the express referral that the matter be resolved by way of arbitration. This approach was rejected. In doing so. Burton J
In Tommy CP Sze & Co v Li & Fung (hading) Ltd,*6 it was alleged that parties are not separability between the underlying contract and the arbitration agreement itself.72 should be dealt with by “arbitration". held that the correct interpretation, rather, should be this:
“compelled" to go to arbitration. However, the argument that there is a distinction between 7.042 In David Wilson Homes Ltd v Survey Services Ltd,*0 the parties only entered into an
Whilst an arbitration agreement would require an element of compulsion for the parties 7.038
a clause baning the remedy and one baring the right or claim is squarely rejected, despite extremely primitive form of arbitration agreement which was included in the insurance “(22] In reliance upon those submissions and upon the decisions of the three
to settle any subsequent dispute by means of arbitration, the fact that the arbitration
some academic support to the contrary.67 The learnedjudge explained that such distinction is policy: Commercial Judges” to whom I have referred, I am entirely satisfied that
clause itself states that disputes "may” or “can” be settled by arbitration does not
most properly understood in the context of a limitation period, whilst in most circumstances the two provisions are not irreconcilable and can be read together:
invalidate the arbitration agreement.” The court expressly held that an arbitration
“it may make no difference whether or not a clause bars the remedy or bars the right". “Any dispute or difference arising hereunder between the Assured and the Insurers
igrecment giving the option to resolve disputes either through arbitration or litigation i) Article 13 provides for ‘UK law’ to be the proper law of the contract
shall be referred to a Queen’s Counsel of the English Bar to be mutually agreed
\ further distinction is made between claims being barred and claims in arbitration was not to be considered void for uncertainty.74 and Article 14 provides for the law of the arbitration.
between the Insurers and the Assured or in the event of disagreement by the
jeing barred:*1
The onus of proving that the agreement is "null and void, inoperative or incapable of 7.039 Chairman of the Bar Council.” ii) Articles 13 and 14 together provide that:
being performed" is on the party resisting the matter to be submitted to the arbitration.
“Here, the fact of the remedy (ie, having the matter resolved by arbitration) being a) the curial law is ‘UK law’; and
The standard of proving the same is high. This had been recognised by the court in 7.043 The English Court of Appeal, nonetheless, upheld the clause as a valid arbitration
barred is not that the party affected becomes barred from making a claim at ill
Kldckner Pentaplast GmbH & Co KG v Advance Technology (HK) Co Ltd,7* in which clause. In doing so, Longmore LJ expressly held that “there is no need for a clause b) the courts supervising the arbitration will be the ‘UK’ Courts,
(as one would under the classic distinction), only that he is merely barred from
Saunders J cited the comments made by Bingham LT* in Gatoil International Inc v which deals with reference of disputes to say in terms that the disputes are to be referred which will apply 'UK law’, and such Courts are to have exclusive
making a claim in arbitration proceedings, but he is otherwise free to claim in court
National Iranian Oil Co11 with approval: to an ‘arbitrator’ or to ‘arbitration’”. The crucial element, in His Lordship’s opinion, h jurisdiction.
proceedings. The critical distinction here is whether or not the clause in question
truly gives, as it were, an option to arbitrate as opposed to a requirement to do so." that there is an agreement to refer disputes to a person other than the court who would
iii) In the event of the arbitration provision being or becoming in some
“The words ‘incapable of being performed’ are a strong expression, in my resolve the dispute in a manner binding on the parties to the agreement.11
manner ineffective, the ‘UK court’ is to have exclusive jurisdiction,
judgment denoting impossibility, or practical impossibility, and certainly not mere
a J acknowledged but resolutely rejected the stance of the English court in Pinnod applying ‘UK law’.”
•others v Lewis & Peat Ltd* and Hardwick Game Farm v Suffolk Agricultural ad B. Mingling the court and the arbitral tribunal
7.044 In some cases, the arbitration agreement would have been drafted so as to also confer *
* 0964) 2 Lloyd'i Rep 227. c Choice to arbitrate or to litigate
jurisdiction on the court to rule on a dispute. Arguments would arise that the arbitration
(HCSD 42/2013, (2015] HKEC521X
agreement is therefore not operative as it did not oust the jurisdiction of the court ^ has once been considered that an essential ingredient of an arbitration clause was to 7.046
, **• S*CtK» 3(d)
Hash**— r OUVManrtce Energy UdPOI5] EWHC lilt (Coma). |W). anng Bint Construction Lid*Si Da**** Sum Construction Engineering Corp GiungJang Branch v Madifoid Ltd (1992) I HKC 320, Guangdong
^afer bilateral rights of reference.*4 However, this is no longer the position. That is
1999] BLR 194, AJ-Namt * Islamic Press Agena Jnc [2000] 1 Uoyd’i R*p 522. Agriculture Co Ud v Conagra International (Far East) Ud [1993) I HKLR 113. 71 aejtn Medicine A HtaJth Ptaducis
2003) t NKC41I „ '***>" * EiponCorp *JA Motlltr (Hong Kong} Ud[ 1994) I HXC 545
" IWI6) 1 Lloyd’i Rep 239 See alio The Nertmo (1994) 2 Uoyd’i Rep 50
Too Newspapers Ud v Hong Hua Mochntn Worts Ud [ 1911] 1 HKLR 315, Ludn'Goldstar International (HK)
J003] I HXC 411. Ud*NgMooKt*EngtnttnngUd[\99S]2mSJt.iy William Co * Chu Kong Agency Co Ud [1995] 2 HKLR 139.Lee " [2011)1 AUER (Comm) 916 foul Smith Ud* H A S biemanonal Holdings be [1991) 2 Uoyd’i Rep 127 (Sveyn J. as Lord Stcya ebao was 1. SWtf
Ud. P7). Me J refened lo the ducoanoo m MujttU A Boyd Commercial Arbitranon (2nd ed). pm 202-204. K*#* Chfetg Consirucnon A Building Materials Ud v Incorporated Owners ofthe Arcadia [2012) 2 HKLRD 975 See ilto " (1990) 169 CLR 332. hl'T»ationai Petroleum Co Ud * Coral Oil CoUd\ 1999] 1 Uoyd ’i Rep 72 (Moore-Bick J. >i Moore- Bick U them mwX
, Arburmtan (21*1 ad), p«5 006. Merton Arbitration Law (199IX p«r»i 1114-11.20 and Morgcm The Art**** „ bu’g"a Technology Co Udv Alstom Technology Ud [2009) 1 SLR 23. • (2001) I All ER (Comm) 449 „ 6X6 *• ''Ace Global Mathers Ud (2006) Uoyd’i Rep 613 (Glorter j. m G) oiler U then wu\
ntwumtt ifHong Kong A Commotion , para 29 02 h P°H) 4 HKLRD 262, [19] Bar°n i SunderUmd Corp\19U>) 2 QB 56. 64 (Dwe* U>
003] I HXC 411. pi) „ A* Lord Bmjlua dm wii
923) 1 XB 690 folliih Cowl of Appeal. 22 February 1990) A
 122 11 IK ARBI IKAI ION AGREEMENT
INJUNCTION TO STAY COURT ACTION 12J
120 I III AHlin HA1 ION AGREEMENT INJUNCTION TO STAY COURT ACTION 121
D. Inconsistent heading and content (ill) Question 3: Is there In reality a dispute or difference between the parties?
to say ih»i an arbitration agreement would bo valid even it confers n unilateral right to In the recent case of Hermes One Ltd v Everbread Holdings Ltd," the Privy Council 7.051 7.055()ccasionnlly (although rarely in complex commercial agreements), a dispute resolution A dispute will exist unless there is a clear and unequivocal admission not only of 7.058
iniist on arbitration had the opportunity to deal with nn arbitration agreement thnt opens up an option for clause might he so badly drafted thnt the content and the heading simply do not match liability but also of quantum.** This question had been discussed in Tai Hing Cotton
both parties whether to commence arbitration or not. lire material part of the arbitration each other. The court nevertheless would not merely look at what a clause purported Mill Ltd v Glencore Grain Rotterdam BV,'00 where it was held that if a claim is made
7.047 In Wtstfal-Larsen ,C Co A/S v Ikerlgi Campania Navlera SA (The Messlniaki Bergen),11
igrccment reads: itself to be but, rather, the substance that it actually carried. In Colt UK Ltd v FE Barber •gainst a party in a matter which is the subject of an arbitration agreement and that party
Bingham J** held that an arbitration agreement that "[provides] that cither party may
Ltd" the "arbitration clause" reads: docs not admit the claim, then there is a dispute within the meaning of the article. The
elect to hnvc the dispute referred to the arbitration of a single arbitrator in London in
"If a dispute arises out of or relates to this Agreement or its breach (whether contractual proposition that if a claim is indisputable then it cannot form the subject of a "dispute”
accordance with the Arbitration Act 1950" is valid despite the other pari of the clnwe
or otherwise) and the dispute cannot be settled within twenty (20) business days "Arbitration or “difference” within the meaning of an arbitration clause must be rejected.
which provides thnt any dispute should be decided by tho l-'nglish courts. His I.ordship
through negotiation, any Party may submit the dispute to binding arbitration ..."
held that Any dispute or difference arising from the construction or performance of the In Pollard Construction Co Ltd v Lee Kwong Kong,'0' the defendant, who is tbe 7.059
fhe respondent commenced litigation in respect of nn unresolved dispute. The nppellnnt 7.052 agreement shall be referred to the decision of a person to be appointed by the plaintiffs subcontractor, was subject to a claim by the plaintiff on failure to pay wages.
"The proviso is not an agreement to agreo because upon a valid election to arbitrate Director General of the British Soft Drinks Association. The person chosen or Tbe defendant applied for a stay of proceeding on the basis that the claim arose from
nonetheless applied to stay the proceedings in favour of litigation, lire lower courts
(and assuming the clause to bo otherwise effective) no furlher agreement is needed appointed shall bo nn independent consultant and shall act as an expert and not a matter within the ambit of the arbitration agreement. The plaintiff argued that the
refiiscd the application.
or contemplated. It is, no doubt, tnre thnt by this clause the parties do not hind as an arbiter and bis decision shall be final and binding on the parties." (Emphasis defendant never disputed liability and, accordingly, there was never a dispute. In
themselves to refer ftiturc disputes for determination by nn arbitrator and in no other In allowing the appeal, Lord Mnnce and Lord Clarke (with whom all other law lords 7.053 added.) confirming the principles laid down in Tommy CP Sze & Co v Li & Fung (Trading) Ltd
way. Instead, the clause confers nn option, which may but need not be exercised •greed) held thnt the arbitration agreement should be construed in the following way: Judge KW Wong held that a dispute would exist unless there is a clear and unequivocal
I see force in the contention that until nn election is mndo thcro Is no agreement to 7.056 Whilst tho heading of the clause was tilled "arbitration” the body of clause was, in admission on both liability and quantum.101 Similarly, in Bio-Chem Technology v Rich
arbitrate, but once the election is duly made (and the option exercised) I shnro the "[33] Tho better view of the words 'any Party may submit tho dispute to binding effect, prescribing any disputes to be resolved by way of "expert determination". The Leaf Internationalthe plaintiff filed summons for summary judgment'04 relying on
opinion of the High Court of Delhi in the Bharat ease1’ thnt a binding arbitration arbitration’ is therefore that they ore not inextricably linked to tho actual "arbitration clause" also expressly indicated that the “person to be appointed” would not the admissions made by the defendant pursuant to Rules of the High Court (RHC) 0.27
agreement comes into existence." commencement of arbitration. There is no doubt thnt the court has ... power be acting as an arbiter. The court eventunlly looked at the substance of the "arbitration r.3. Despite the strength of the evidence and the admission of the defendant, the court
to Older a stay pending arbitration, even though neither party has actually clause" and held that expert determination should prevail over arbitration. Despite not held an interpretation that part of the claim would be adjudicated by the arbitral tribunal
7.048 In Lobb Partnership Ltd v A intree Racecourse Co Ltd*' the court upheld the following submitted, or will necessarily ever submit, tho dispute to arbitration, and holding in favour of arbitration, Cott UK Ltd v FE Barber Ltd could be prayed in aid as whilst the other part would not be contrary to the intention of the arbitration clause and
arbitration agreement to bo valid: even though the clause postulates some further step (such as here attempting nn authority that courts look to the substance of tho matter instead of labels. flies in the face of commercial sense.
settlement, or at least waiting, for 20 days after the dispute arises) before
In Goodwood Investments Holdings Inc v Thyssenkrupp Industrial Solutions AG,'* 7.060
"Disputes may bo dealt with ns provided in paragraph 1.8 of the RIBA Condition! commencement of any arbitration. Tins was decided by the Houso of Lords E. A non-existing arbitration institution
the applicant argued that the parties have already entered into a settlement and there
but shall bo referred to the English courts" (Emphasis added.) in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltdn ... In thnt 7.057 In Lucky-Golds tar International (HK) Ltd v Ng Moo Kee Engineering Ltd," the parties were therefore no dispute available to be submitted before the arbitral tribunal for
case, the arbitration agreement actually provided for further steps to be token entered into an arbitration ngreement in which, if a dispute arose, the arbitration would determination. In scrutinizing whether a settlement has been reached by the parties.
7.049 Tire RIBA conditions furlher provided thnt: (by way of remitting the dispute to a panel of three experts), nftcr which (it be governed by "the rules of the International Commercial Arbitration Association", Males J neatly summarised the principles to be applied whether a settlement has been
went on) cither party, if dissatisfied with the decision of the panel, ‘may’ notify which is a non-existent organisation. The plaintiff therefore argued that there was do reached between the parties:
"... any difference or dispute arising out of tho Appointment shall be referred by the other 'that the dispute ... is to be referred to arbitration’. So here, section binding arbitration agreement between the parties. In confirming that there was indeed
either of the parries to arbitration by n person to be agreed between the parties or, 6(2) is wide enough to permit a stay, even though neither party may actually a valid and enforceable agreement, Kaplan J held that:*7 "[30] In brief, it is well established that the whole course of the parties’ negotiations
failing agreement within 14 days alter either party has given the other a written submit the dispute to arbitration."
must be considered (a point reiterated in Global Asset Capital Inc v Aabar
request to concur in the appointment of nn arbitrator, a person to be nominated •» “It is perfectly clear that the parties, by this clause, intended to arbitrate any disputes
[34] ... The hallmark of arbitration is consent. In Bremer Vulkan Schiffbau und Block SarL'M), that it is possible for parties to conclude a binding contract
the request of either party by the President of the Chartered Institute of Arbitrators that might arise under this contract. This agreement is not nullified because they
Maschinenfabrik v South India Shipping Corp Ltd," the House of Lords even though it is understood or agreed that a formal document will follow
provided thnt in a difference or dispute nrising out of the conditions relating to chose the rules of a non-existent organisation ... True, it is, that there will be do
drew a significant distinction between litigation and arbitration. Parties to an which may include terms which have not yet been agreed, and that whether
copyright the arbitrator shall, unless otherwise agreed, be an architect." arbitration under the rules of the International Commercial Arbitration Association,
agreement to arbitrate are, it held, under mutual obligations to one another this is what the parties intend to do must be determined by an objective
but there will be an arbitration under the law of the place of arbitration chosen by appraisal of their words and conduct.
to cooperate in the pursuit of the arbitration ...."
7.050 More recently, the English High Court in NR Three Shipping Ltd v Harebell Shipping the plaintiffs and they have a very wide choice indeed. The parties have made
LttP* held that an arbitration agreement is valid in allowing a party's option to resolve This opproach seems to be affirmed not only in English authorities but also in other 7.054 their intention to arbitrate perfectly plain in this clause. If the use only of the word
the dispute by arbitration.*0 * G'~'tdong Agriculture Co Ltd v Conagra International (Far East) Ud (1993) 1 HKLR 113, Tdt Hing Cotton Mff
common low jurisdictions.*4 ‘arbitration’ is sufficient to create a binding arbitration agreement then, a fortiori,
IJd v Glencore Groin Rotterdam BV 11996) 1 HKC 363. Louts Dreyfus Trading Ltd v Batonch International iGrrmpi
this clause."** (1997) 3 HKC 597, FAD Buildings Services Engineering Co Ud v Chevalier (EAM Contracting) Co Ud [2001] 3
HKC 403,
• |I9I3| I All HR !I2 * IIW6| 1 HKC 363 (Bokhary JA. u Bokhwy NPJ twu)
• Aa L*r4 hni|h«« to* mi Dharamdau 695 So 2d 121 (Florida Court of Appeal 1997). United States v Baiters Insurance Co 245 F 3d 3l3
!*»«] 1 WLR 4091 (DCCJ 5635/2016. [2017] HKEC 2301).
" CfcNH A*to v f'Hpntttvtg (Vj>(1977) || ILK Data 5?
11 |?000) CLC 431 (CoIma J) , I'wsjAcm (4th Cu 2001). Conor Florida Corp r Astriton Ud 499 F Supp 2d 1217 (2007) (Florida Diitnct Cowl). „ *<|23)
" (1997) 3 AUER 540 „ HtCA 47&7017. (2017) HKEC 24«9).
• P005)| AI]Ill<Cto»)K>0 * l'*»l)l Lloyd ! R*p2SJ
V for tuaplo, Cautdtm National Rstheay * Lovat Timne! Equipment Itk (1999) 122 OAC171,(12)-|14| (FinUyion * (I993J 2 HKLR 73, „ to RHC O I4.
• iMofM m II Is tflwMt. to titanBOcva ifTMBCil ptovitM ihil “my ditfuto aming ton to provutol **
" [Ud. 75-76. „ P°U|EWHC 1056 (Comm).
rWHrptfty of ill ptvtonDMK# *tiah tMM be iwolvtd by mutual aprontni which to Ovnov detenmott to **** JAJ. *SG Nimbus Ptt ltd v Booni ofContml for Cricket In Sn Lmka (2002) 3 SLR 603 (Seiu Kin JC), JC Bonnot
" Citing Hobbs Podgett A Co (Reinsurance) Ud v JCKirklandUd (1969) 2 Lloyd'i Rep 547. 549 12017] 4 WLR 163
by artoraftoa toll bo vofmod to arbmrtwa in l oodoa of. Bf Owimi option. in tootov afy lolectod by to O*** * r«'xnr» of Mependent Unions Local No 14 331 F 2d 335 (lih Or 1964). Cwv of Loutia v Nenland 705 SW
by fwo Mbantion, on appoint** by to Owoon tod at* by to Otartoron who toll roocb tou deacon by afT**1* 916 (Ky 1916). Britt* A Stratton Corp *• Local 252, International Union, Allied Indnitrlal Workers of America
Engbtfti low If to aitaftaiori ao appointed iholl not apto toy ahall appoint an umpire to make «\* h deacon" 10 f Jd 712 (7th Cll 1994), Austin v Owens-Broekucn Glass Container Inc 71 F 3d 175 (4th Qr 1996). Young v
 126 THE ARBITRATION AGREEMENT
SEPARABILITY OF THE ARBITRATION AGREEMENT ITT
124 THE ARBITRATION AGREEMENT INJUNCTION TO STAY COURT ACTION 125
in which the Court held that an arbitration clause should be construed in accordance would be slow to come to the conclusion that there has been no dispute between tbe
[31] It is equally well settled that words such as ‘subject to contract’ indicate The court should be satisfied that the mntter in dispute falls within the scope of the 7.062 with the presumption that the parties intended that any dispute arising out of the partes.114
that parties do not intend to be bound until a formal contract is executed. Ai arbitration agreement. A cause of action that is not a matter of dispute within the relationship into which they had entered or purported to enter will be decided by
Lewison U explained in Generator Developments Ltd v Lidl UK GmbH'n arbitration agreement would not be stayed."1 Nonetheless, the court is prepared to give the same tribunal, unless with clear language to the contrary effect. Saunders J
• very wide interpretation as to what falls within the arbitration agreement. The court considered, first, that the Memorandum of Understanding sets out and regulates the 4. Separability of the Arbitration Agreement
The meaning of that phrase is well known. What it meant is that (a)
has constantly adopted a wide approach in interpreting the scope of the arbitration business relationship between the supplier and the distributor; second, the existence
neither party intends to be bound either in law or in equity unless and until
agreement. The purpose in doing so is to encompass the widest range of potential of a prohibition clause against selling conflicting products; and finally came to the The doctrine of separability prevents invalidation of an arbitration agreement due to 7.069
a formal contract is made; nnd (b) each party reserves the right to withdraw disputes that its terms will reasonable permit arising out of the contract. In the celebrated conclusion that ”[i]t was illogical that businessmen entering into a distributorship the termination of the underlying contract. It also implies that even if the underlying
until such time as a binding contract is made. It follows, therefore, that in
decision of Fiona That A Holding Corp v Privalov,1" it was held that the claims that agreement containing an arbitration provision would have intended that a question of contract is itself invalid due to fraud, bribery, misrepresentation or any reasons, it
negotiating on that basis [both parties] took the commercial risk that one
the charter contracts had been induced by bribery fell to be determined by arbitration. quality of goods would not be determined by the same tribunal that would determine does not automatically mean that the arbitration agreement itself would therefore also
or other of them might back out of the proposed transaction .... In short a
The comments made by Lord Hoffmann are most instructive: the breach of the MOU”. It is submitted that this case perfectly epitomises the wide become void. It also does not deprive the arbitral tribunal of the jurisdiction or that the
'subject to contract agreement’ is no agreement at all
interpretation adopted, coupled with an increasing willingness to give effect to arbitration agreement would become invalid. In Union of India v McDonnell Douglas
[32] The same applies to an agreement which is stated to be subject to the board "In my opinion the construction of an arbitration clause should start from the prevalent commercial practice. Corp"1 Saville J summarised most succinctly the doctrine of separability: “An
approval of one or both parties. When a person concludes an agreement oo assumption that the parties, as rational businessmen, are likely to have intended arbitration clause in a commercial contract ... is an agreement inside an agreement
7.066 The court has repeatedly emphasised that it is not the function of the court to usurp
behalf of a company which is stated to be subject to its board approval, be any dispute arising out of the relationship into which they have entered or Tbe parties make their commercial bargain ... but in addition agree on a private tribunal
the function of (he arbitrators. It is for the arbitrators, and the arbitrators alone, to
mokes clear that he docs not have authority, or at any rate is not prepared, to purported to enter to be decided by the same tribunal. The clause should be to resolve any issues that may arise between them.”
satisfy themselves that they have jurisdictions in handling the matter. Unless the
commit the company unless and until the approval is given (cf Warehousing construed in accordance with this presumption unless the language makes it
point is clear, the court is not to decide the matter, but to stay the court action and The House of Lords had similar observations in Lesotho Highlands Development 7.070
A Forwarding Co of East Africa Ltd v Jafferali A Sons Lutm). Since tbe clear that certain questions were intended to be excluded from the arbitrator’s
refer the parties to arbitration."* Thus, in Xu Yi Hong v Chen Ming Han,110 Deputy Authority v Impregilo SpA13* that “it is part of the very alphabet of arbitration law
directors are required to exercise an independent judgment whether the jurisdiction.”"4 Judge Anthony To111 has construed that the contractual and tortious disputes in tbe that ... the arbitration agreement is a distinct and separable agreement from the
transaction is in the best interests of the company, it is very’ hard to see case are so closely knitted together on the facts that an agreement to arbitrate on one underlying or principal contract”. The arbitration clause is, therefore, a self-contained
how there could in such circumstances be any implied promise binding tbe The need to pay due regard to commercial certainty is similarly emphasised by 7.063 can properly be construed as covering the other. Similarly, in Asghar v Legal Services contract collateral or ancillary to the underlying contract.114
company to the effect that approval will be forthcoming or that it is a mere Lord Hope:"5 Commission,m the English High Court held that claims for conspiracy, misfeasance
formality or a “rubber stamping" exercise. Even an express promise would be The practical effect of the doctrine of separability is that even if the underlying contract 7.071
in public office and inducement to commit breach of conduct were all found to be
problematical. If the negotiator makes clear that he is not authorised to commit “The proposition that any jurisdiction or arbitration clause in an international never came into existence, the arbitration agreement, nonetheless, would be still
within the arbitration agreement because "the resolution of the contractual claimi
the company, he can hardly be authorised to commit the board of directors to commercial contract should be liberally construed promotes legal certainty. binding. The court and the arbitral tribunal would, both, be willing to confirm that the
cannot sensibly or practically be divorced form the resolution of the non-contractual
commit the company. Accordingly, when an agreement is concluded which is It serves to underline the golden rule that if the parties wish to have issues as to arbitration agreement would be able to survive invalidity of the underlying contract'"
claims”.m
subject to board approval, neither party is bound until the approval is given." the validity of their contract decided by one tribunal and issues as to its meaning For instance, in GlaxoSmithKline Ltd v Department of Health"' it was alleged that
or performance decided by another, they must say so expressly. Otherwise they 7.067 Some arbitration clauses would have stipulated certain conditions precedent before an the parties had entered into a non-binding agreement. The court even so, nonetheless,
will be taken to have agreed on a single tribunal for the resolution of all such arbitration action could be instigated. This may include, on some occasion, as trivial concluded that the award rendered thereupon would be valid and enforceable.1” Even
(lv) Question 4: Is the dispute or difference between the parties as a payment of a fee.114 Despite those prerequisites, the court, nonetheless, could still to the extreme that the undo-lying contract was void, the arbitration clause would stiff,
disputes.”
within the ambit of the arbitration agreement? refer the parties to arbitration even though the parties have failed to comply with those nonetheless, be valid due to the independent nature of the arbitration agreement from
7.061 This question often involves contractual construction by the court to identify what The decision can be best understood as a successful realignment of the position of 7.064 pre-arbitration procedures.125 the underlying contract. As put by Colman J in Vee Networks Ltd v Econet Wireless
precisely are the matters required to be referred to arbitration.10* Words such as “in the English law with international commercial and arbitration practice towards a more International Ltd:"3
connection with" or "connected therewith" deserve a broad construction and cover aD 7.068 Where there is a dispute between the parties, the court, again, considered that this
wbitration-friendly regime."4 It is therefore unsurprising that this approach is still being should be construed widely and liberally as possible. Save and except where there
disputes other than those entirely unrelated to the transaction covered by the contract in •dopted trans-jurisdictionally and followed in Hong Kong. has been a clear and unequivocal admission as to both liability and quantum, the court
question."• In doing so, Ma J'" adopted a two-step approach:
hr Klockner Pentaplast GmbH A Co KG v Advance Technology (HK) Co Ltd,"1 7.065 * Dmfus Trading Ltd , Bomarcb butmanatal (Group) Ud [1997] 3 HKC 597. Tiu Hag Caron UrBUd, GSmcao

(1) The court must first construe the arbitration agreement itself; and Saunders J faithfully applied Fili Shipping Co Ltd v Premium Nafta Products Ltd"* Gran Ratrrdem BV [ 1996] 1 HKC 363. Garngdong Agncuhu* Co Ud , Cenegro hrtmaiatd (Fa Eat) Ud [1993]
I HKLR 113. ZNoi Jtarg E A T Dr, Am Smw Hasd Co Ud, An Hat Co [1994] I HKC 539, SrcNou Qua^Sud
FCCW Global Ltd , hurvcftro Commancanons Smics Ud [2007] 1 HKLRD 309. CUr Chrtmg Hvtf A Co *** I fttfur, Crgutel Eaaprisr , Grra Eesi Pakogmg tntrrmsnono/ Ud (2013| 6 HKC S3. Urn Cheat Hot* , Htag Km Ha
(2) Tbe court must analyse the nature of the dispute or difference by reference to Z*c~t Rag Imrmatene/ (Group) Ltd (HCA 1454/2015. [2016] HKEC 656) (HCA 1212/2016, [2016] HKEC 1199)
jA Rtfrigaaitm Etc , Lam K»a Htmg [1995] 2 HKLR 256, A/# Capital Corp Ltd , Cofft,
the claim. The content of the defence is generally irrelevant to this questioc m 12006] 4 HKC 633. *c« abo Pegnat SpA , Trades CXtat Transportation [1917] 3 AD EA 565, Astra lineodor Comp— * l19,3] 2 Lloyd's R*p 41
Ud [2007] I HKLRD 7|t. Nanera SA of Parana v Mebaiefl GmbH (Thu Damaios) [1971J 2 QB 511. Woolf, CotHs Removal Sarrtei [19«fl 1 “ [2*06] 1 AC 221. [21]
(except for a true counterclaim). " [2*07] 4 All EA *31. fbUo’Awd in. for example, THo# Rut Group Sp.4 ,AmThat Enropt Lid [3016] 1 AD EA (Casa)
KB II. " C«P* "Cop*( 1»I5) 52 LT607.Uorgat, W\IHa> HansatUd[ 1907] 2 Ck Ml.Htymat,Donuts Lrf[1942) AC35*.
*25. rqvuno, , Smegm [2017] 1 AUER (C(n) 1103. Gohm Suits Ltd , Gtmyor Smgepoa Pn Lid [2011] AiToJibaxu ^ «1» Brtmrr Vulhm Schtfbou atd Uaxhtnatfobnk , South Me Suppntg Corp Ltd [ 1911) 1 Lkrytl « Rip 233.259
B EWHC 1091 (Com). 10 (2004) EWHC 1103 (Cb). [II]
“ P007] 4 AD EA 951.113) H~*our AssaaKt Co (UK) Ud , Kata Gentrml MmMmI tnsuraKr Co Ud [1993] 1 Uoyd'l Rap 435- Sw ate*
- P«1l]EWCAOv)96.(79) “ S«e *l«o Irye:a Uddsetogy Copttol Ud , Nerfi (2012) EWHC 4171 (Comm). [9] (Fisa J). iarrpnds , DtL**3* wt Potrrr GmbH , Knot Chls A Groznr PTE Ud [2009] 2 Lloyd'» Rep 495, Hatevwrtl tnrrmatonel MMJt tern Udu
- [I*6<1 AC i ; *m*i
Inttmanenal Ud [2014] 1 Lloyd’. Rep 540. [7] (Te« J> m ***» Group LLC [2014] 2 Uoy6'«R^> 133 [91], [94]^
* 7—n CP Szt J Co » l, A Fmg (7>wdb>ef Ud [200S] 1 HKC 411. [54). Cm a Mkr Mury of pnsffc* * *** Lord Hopt'i c»onaejr) note tt[29). adbi rtfaoDcc lo vaooas fcr»p Mhonoe* at (31): AT4 TTtctmoiopa °* Ubrra ComwtoAnts SA vAugusnn [2015] 2 Lloyd’. Rep 372. [34J w BOOT] 2 An EA (Com) 1140
** * Cmmmmv Wortm rfAmrrtco 475 US 643 (1916). UotN Corp » Pat Austria SSippotg Pn
GtMm tOm 0KJ ***** Co (DOC) 22MmT [2016] HKEC 14*2* “* Mwm**n*t Idd , Sot Oumg Construcna, A Engmrmng Co Ud [1991] 1 HKC 254. China „ •t*o, more recently. (JR Pomr GmbH , Kook Ws 41 Groim PTE Ud [2009] 2 Lloyd*! Rep 495
m **(2006) 157 PCX 45. Hoary Industry Co UdrJGCCorp [2001 ] 3 HKC 5»0 B005] 1 All ER (Com) 303. (21)
- pOOJllKKC4llf5^Wtawd«r*A^C»—rw»K»C»Lrf»tj»jr-«fJC»V(DCa5«SOTI«,pO|7]HKECyfln , POll) 4 HKLRD 262
*»* oom Ftemo That A Holdotg Op * PrWoks, [2007] 4 All EA 951.
 130 THE ARBITRATION AGREEMENT
CHALLENGING JURISDICTION OF THE ARBITRAL TRIBUNAL 12*
(b) what matters have been submitted to Tka. UNCTTRAL Model Law arts I and 16 ad
g^g-nce or vaSdtay of die underlying sabstsnfrve contract unless die parties have with die arbitration agreement. sort, hold in hand Article f
gcroi to this’. ** (3) If a dispute is submitted to arbitration in accordance with
agreement and a power to

5. Challenging Jurisdiction of the Arbitral Tribunal (a) makes a counter-claim arising out of the same dispute; or (c) Court's
(b) relies on a claim arising out of dot dispute far the purpose of a set-oft The court has a limited role to play m challenging
(a) Statutory power of the arbitral tribunal
die arbitral tribunal has jteisdktion to decide on the counter- rflinl UNCTTRAL Model Law art. 16(3) provides
~JT1 The ,tbc« is sol so ckar-cxc if die eiscjggs of *he agrre.-nent nnx>S* degaBty or ss OSUlKAL Model Law art. 16^ provides die foDowmg 7.076 tel it has jurisdictiOQ, then either party may refer the
maffnmrtopab&cpcic? faSiecrdiiucy laws of caezruzz, ac t£rrt=necc would be vtai or the claim so relied on only to the extent that the subject
tf the Coart of First Instance. High Coart- The
of dial counter-claim so relied on only to the extez
54. Article 16 of UN'Cl IKAL Model Law (Competence of arbitral tribunal Cipalatrd dial such determination of the Coot of First
tx jrtcgjac Mi.ee: :>wb void faZ loggbsr w-ch die gndertymg cocitraa ix to pofan matter of that counter-claim or that claim folk within the scope of
to rule oa its jarisdictkia)
aeafegKC fa Soitzmarr r Salesman™ W«3er U noted ftmr the same arbitration agreement.
(1) Article 16 of the UNCI I KAL Model Law, the text of which is set out The party intending to farther sabmit the dispose to the Cot rf Fast
(4) A ruling of die arbitral tribunal that it does not have jurisdiction to
“There may be illegal or mmaral rirafrngs winch ere, froa an Etogfch It* below, has effect subject to section 13(5)— k> within 30 days after the artntral tribunal made such
decide a dispute is not subject to appeal
perspective, incapable of being Bii'ZuOsd because an ipwal to artilia^ «bw Owners of Hamden Corel v Mega Mies Construction Co Ud,M
"Article 16. Competence of arbitral tribunal to rule on its jurisdiction
»rcii itself be illegal or contrary to public policy under Fngfrgh Iaw.“— (5) Despite section 20, if the arbitral tribunal rules that it does not haw party- has not “received notice of a ruling’ until it receives die
(1) The arbitral tribunal may role on its own jurisdiction, including jurisdiction to decide a dispute, the court must, if it has jurisdkxka, tf the ruling made, or has actually been notified of die native and effect
Tie more net andwrajes seen id have departed from this sauce and reccndk any objections with respect of the existence or validity of the decide that dispute. despite not having been given or receiving die ruling itself. The cut 1
mare daseh with tbe doctrine of separabihiy. For example, m Beijing JuuJorg arbitration agreement. For that purpose, an arbitration clause 30-day period starts to ran once the paty collects the award as opposed
Heavy industry Group v Golden Ocean Group Ltd, ' * die court held dial, despite tic which forms part of a contract shall be treated as an agreement Xibunal gives notice for collecting the ruling
(b) Doctrine of kompetenz-kompetenz (competence—competence)
fact dial die contracts of guarantee (die underlying comma) involve a bread) of die independent of die other terms of die contract A decision by die When die matter is submitted for the cot's determination, the cot
Cfaa foreign exchange control laws, die arbitration danse (fid not go so far as is arbitral tribunal that the contract is null and void shall not entail 7.077 The practical effect of UNCI 1RAL Model Law art 16 is to vest die power of deciding
conduct a “re-bearing" of the matter aid may substitute its
involve any breach of the Chinese law. The arbitration clause was therefore valid toi ipso jure die invalidity of the arbitration clause. any dispute of jurisdiction of the arbitral tribunal in the hands of the arbitral tribcaui
ippi update. The court would bear arguments afresh on a dr novo
enforceable. Similarly, m Honeywell Irtemceiond Middle Last Lid v Meydan Groty itself. The underlying rationale therein is that once a valid arbitration agreement
(2) A plea that the arbitral tribunal does not have jurisdiction shall be ■rbrtral tribunal's decision on its jurisdiction.10
fIC,a> the Fjoghsh High Court held the arbitration agreement to be \xlid even tbongk exists, the parties should submit all disputes, including but not limited to disputes as to
raised not later than the submission of the statement of defence. A jurisdiction, in the hands of the arbitral tribunal. The court would therefore be rehxari
fi* girirriymg contract was contrary' to die menue laws and export controls of the (d) Duty oa parties to object
party is not precluded from raising such a plea by the fact that he to intervene.10 The fact that the arbitral tribunal has competent jurisdiction to decide
crus Try of performance
has appointed, or participated in the appointment of, an arbitrator a dispute so as to challenge their source of jurisdiction, viz, disputes incidental to die UNCTTRAL Model Law art-4*0 sets out the doctrine of waiver of right to
TJT4 Nonrthf Ir.ss. the position would be different if the impeachment on the invalidity was A plea that the arbitral tribunal is exceeding the scope of its arbitration agreement or the constitution of the arbitral tribunal itself, is encapsulated
not only against the underlying contract bat also against the arbitration agreemen: authority' shall be raised as soon as the matter alleged to be beyond under the doctrine of kompetenz-kompetenz (or competence—competence). “Articled. Waiver of right to object
jtseH * or if there is a dispute as to die existence of the arbitration agreement clause the scope of its authority is raised during the arbitral proceedings
ndt'" fa those circumstances, there would be no jurisdiction in the hands of the The arbitral tribunal ma\r, in either case, admit a later plea if it 7.078 In Incorporated Owners of Hamden Court v Mega Miles Construction Co Ltd,141 the A party who knows that any provision of this Law from winch the
vbitral tribunal. Instead, it would be up to the court to determine die matter140 considers the delay' justified. court held that in construing an arbitration clause, the primo facie assumption should derogate or any requirement under the arbitration
be that the parties, as reasonable businessmen, were likely to base intended that »0 complied with and yet proceeds with the arbitration without
7-075 fa Fiona Trust & Holding Carp v Privalcnr, Lord Hope also made reference to the (3) The arbitral tribunal may rule on a plea referred to in paragraph (2) disputes relating to a particular transaction should be resolved by the same tribunal to such noo-compliance without undue delay or. if a time-limit is
mnr of severability. His Lordship explicitly staled dial “the validity, existence tr of this article either as a preliminary question or in an award on the The clause would therefore be construed in accordance with this presumption unless thereof, within such period of time, shall be deemed to have waived his
effectiveness of die arbitration agreement is not dependent upon the effectiveness. merits. If the arbitral tribunal rules as a preliminary question that the language specified otherwise. object"
it has jurisdiction, any party may request, within thirty days after
having received notice of th2t ruling, the court specified in article 6 7.079 The power conferred upon the arbitral tribunal is immensely wide. An allegation
LN'Citral Model Law art.4 provides an important safeguard against
to decide the matter, which decision shall be subject to no appeal; that the arbitration agreement was entered into illegally or by fraud does not bar the
course of the arbitral proceedings. In summary, for a party to reh <m UNCTTRAL
“ rm*> QB 7*5.7*7 while such a request is pending, the arbitral tribunal may continue arbitral tribunal to rule on this matter. It is for the arbitral tribunal to decide whether
die arbitral proceedings and make an award.” the arbitration agreement was really rendered illegally and, if so, what would be the
• PMJItASEX'CaMiOAH’H**} appropriate redress.10
■ VsneWUeyeiiuftn.Xny (2) The power of the arbitral tribunal to rule on its own jurisdiction under
• Assmwmt Cm (VK) Ltd r Zwmm Gmnca! JmtrmekmU hamrrmet Cm Ltd [1*93] I Lioyti Imp 455. **
****** Ltd, EcmtmWHacnlmmnmmm*Ltd VStH) 1 AlEXfC*—) 303. Hvmmfa Mm*— Harm* CmL*r subsection (1) includes the power to decide as to—
Odm Korn Un* Amdr * Owwg S>mm Chmg Jdlkt (HCA 2297/2014. (2015] HKEC *02* _ P«15] 5 HXC 179
Ammncm, BmO Trmmpmrt Ltd (71m tmaf* Clomp,) [2013] 2 A1 EJt (Co—) 4*9. [S5\
(a) whether the tribunal is properly constituted; or (2015) 5 HKC 179 ~ 4C*rtc*p014]«HKC42).[50].2r>4[201S]3KKC272.piH2ty
~ aF>mL*Mm*m»rtCmt/E—imU*rTb*ctrmmrUd*StVm~TrmatmrmTM[2m]\AJlEHawMa)73i.nm*i
hportadorv deSd&AdtCTr Corrupt Uarutmm Smd-Ammicmw lme [2011] 1 Uey4 * fep 399 [41J. *“ ‘ ‘ ' " " Kit
Fmmu Ltd * ftdmmm JmM dt f iMNi [2UJ2] EWHC 102« (C*i Amghm CHlt Ud r Ornmrrt
Ommum Omnmmn mf dm Umnm Oompmom ptKZ] EWHC 2407 <Kdmim ATbm r Ate* Idatmr Tmdmg S+ **
0tm 9 porrj 1 AS E* 'Cam *13 “ 12007] 4 AD EX 951. J32)
- AJtmm r Ate* Merer Trm*~t S+,Bhd(X,2) [20CT] I AS EX (Com) 113 Eefccncfccd *s AyVrcaboe Ordtsaacc i 34
 132 THE ARBITRATION AGREEMENT

Ye shall do no unrighteousness in judgment: thou shalt not respect the person

Model Law art4 to argue with the other party that has waived his right to object, the Chapter 8
of the poor, nor honour the person of the mighty: but in righteousness shalt
following elements must be fulfilled:
thoujudge thy neighbour. (Leviticus 19:15)
THE ARBITRAL TRIBUNAL
(1) Non-compliance with a procedural requirement under a non-mandatory
provision of the Arbitration Ordinance or the arbitration agreement;
(2) The party deemed to have waived its right to object must have knowledge of 1. Introduction
Para.
the non-compliance; and
1. Introduction............................................................................. 8.001 Arbitration shares many similarities with litigation both substantially and proceduralN. 8-001
(3) That party must have proceeded with the arbitration without stating hit Yet, one of the stark differences that distinguishes arbitration from Irrigation is that
2. Arbitration Agreement and the Arbitral Tribunal............ 8.003
objection to such non-compliance without undue delay or without the time parties are at liberty to set criteria and mechanism and, in some cases, to determine
limit provided. (a) Number of arbitrators)•••••••••••••••••••••••••••••••••••••••«■•••••< 8.004
the actual choice of the members sitting in the arbitral tribunal who would actually
(b) Qualification of arbitrators).......................................... 8.007 determine the dispute between themselves. This chapter first considers the procedure of
7.086 It is therefore paramount that parties raise an objection as soon as practicable after the bow an arbitral tribunal would be constituted. In court litigation, the dispute between
3. Statutory Regime for Challenging an Arbitrator............................. 8.011
occurrence of an irregularity. In Arjowiggins HKK2 Ltd v X Co,'4* the Court noted that parties would be heard by a judge assigned by the judicature bearing m mind the
(a) Conflict of interest regime............................................................ 8.011
the respondent had failed to raise objections as to the jurisdiction of the tribunal and expertise and diary of the judicial officers, whilst in arbitration parties can put their
validity of the arbitration agreement throughout his participation in the arbitration. The (i) International Bar Association Guidelines to
minds together and appoint someone who does not necessarily have to be legally
party’s attempt to raise these grounds only at the application to set aside the award Conflict of Interest (IBA Guidelines).......... .....8.015
qualified to adjudicate a matter. The recurring theme is still “party autonomy”. This
was thus rejected, as this has deprived the arbitral tribunal of the opportunity to rectify (b) Natural justice regime............................................ . .....8.024 chapter shall also examine the role of the Arbitration Ordinance (Cap.609) in the event
any such defect. Similarly, in S Co v B Co,1*0 the court held that the applicant, by its parties fail to come to a conclusion.
4. Natural Justice and Arbitral Tribunal...................................................................... 8.027
full participation and arguments in the arbitration proceedings, had waived its right
to object. (a) What is natural justice?.......................................................................................8.027 The chapter will then consider possible channels through which a party may challenge 8.002
(b) Direct pecuniary or proprietary interests.........................................................8.029 Ibe appointment of a particular arbitrator. To put it in another way, this is the arbitration
7.087 In Essar Oilfields Services Ltd v Norscot Fig Management Pvt Ltdthe English version of requesting a judicial officer to recuse himself. In light of the pro-arbitration
(i) The Dimes rule............................................................................................ 8.029
authority reaffirmed that should a party wish to object, he would be under a duty to attitude adopted in Hong Kong (and other major jurisdictions), it would be easy to
make this point clear before the arbitral tribunal at that time. By continuing to take pari (ii) The De Minimis rule ••••••••••••••••••••••••■••••••••••••••••••••••••••••#•••••••••••!•••• Si 033
understand why the Arbitration Ordinance only provides finite grounds for challenge.
in the proceeding, he would have waived his rights to object. (c) Possibility of bias and apparent bias.................................................................8.035 It would be safe to say that the arbitral tribunal (and the court) allowing such an
(i) Rule in R v Gough of "Real Danger of Bias”..........................................8.035 application would be an exception instead of a norm.
7.088 In Gao Haiyan v Keeneye Holdings Ltd'n the applicants applied for leave to enforce
a mainland award. The respondent seeked to resist the enforcement on the ground that (ii) The refined rule.............................................................................................. 8.036
the award had been obtained against public policy, which was eventually allowed by (iii) Personal and non-economic interests....................................................... 8.037
the judge. The applicants appealed. In allowing the appeal, Tang V-P,M (with whom (iv) Lord Hoffmann in ex p Pinochet.............................................................. 8.038 2. Arbitration Agreement and
Fok JA”4 and Sakhrani J agreed) condemned parties for adopting a “wait and see" (v) Challenges in arbitration...............................................................................8.039 the Arbitral Tribunal
attitude when considering whether to pursue a complaint of bias. The fact that a party A. Arbitrator appointed by the same party in similar disputes............. 8.039
recognises a point but decides to keep the point up his sleeve would mean that the As mentioned hereinabove,' arbitration is a contractual creature. The arbitration 8.003
B. Previous professional relationship between an arbitrator
arbitral tribunal would not even have an opportunity to cure the irregularity.IM Htcement crystallises the consensus and preferences into writing. As arbitration is a
and legal representatives before him..................................................... 8.042
mode of dispute resolution that requires both parties to enter voluntarily, the constitution
C. Arbitrator’s firm had commercial dealings with one party.............. 8.045 °f an arbitral tribunal, in the same vein, has to be constituted in accordance with the
D. Arbitrator previously acting for or against •greement of the parties. In general, the arbitration agreement would con tarn some or
a party as legal representative in other proceedings...........................8.046 *•1 of the following important elements:
E. Arbitrator’s behaviour with counsel appearing before him............. 8.048
(d) Immunity of arbitrators if not dishonest.......................................................... 8.050 0) The number of arbitrators;
(«) Summary................................................................................................................ 8.052 (2) The qualification that each arbitrator should hold;
- fHCCT 53/3015, (2014) HKEC 2472) 5- Procedure of Challenging an Arbitrator.................................................................. 8.055 (3) The nationality of the arbitrators); and/or
141 P014)«HKC42I
“ P017JB^L* 227 (*) Statutory power of the arbitral tribunal and the court.....................................8.055
(4) The residency of the arbitrators).
* 1201211HKUU3 627 (b) Duty on the parlies to object..............................................................................8.058
“ Aj Tag fJ *«■«•(
- AiFakri%m*m Termination of the Mandate of Arbitrator...............................................................8.063
m 4* Import 4 Ksport Cmp rrdrttt EogmttrtniCoLut(\999) 1 HKCFAX lit, IIS (to Aphony Mitoo NRh *«* 7.002.
 154 THE ARBITRAL TRIBUNAL ARBITRATION AGREEMENT AND TIIE ARBITRALTRIBUNAL 137
138 I HE ARBI TRALTRIBUNAL T ARBITRATION AGREEMENT AND THE ARBITRAL TRDUNAL 04

and understanding of the trade that might be essential when determining the matter in before Teare J in the High Court, the court held that the Queen's Counsel failed (be
(a) Number of nrbltrator(s) (2) If or to the extent that there is no such agreement of the parties, the dispute. By agreeing on an arbitrator who possesses a specific trait, parties, theoretically, requirement. Nonetheless, the judge expressly held that he came to this coocbmon
arbitrators arc free to agree on the functions of the umpire. would have greater confidence and ease in expressing themselves in the course of the merely following earlier High Court authorities.* The judge also held that had be been
8.004 UNCITRAL Model l aw ait . 10j governs the number of arbitrators in an arbitral tribunal:
(3) Subsections (4) to (11) apply subject to any agreement of the parties or arbitration. uninhibited by precedents, he would have ruled that the Queen’s Counsel satisfied the
23. Article 10 of UNCITRAL Model Law (Number of arbitrators) the arbitrators. qualification requirement of the arbitration agreement. On appeal, the Court of Appeal
8.008 Historically, arbitration occurs where people of the same trade as the disputants
ruled that earlier authorities were wrong and that the Queen’s Counsel rightly satisfied
(1) Article 10(1) of the UNCITRAL Model Law, the text of which is set out (4) After an umpire is appointed, the umpire must attend the arbitral adjudicate the dispute. This allows, on the one hand, the arbitration to be conducted
the qualification requirement. Leggatt LJ pointed out that:
below, has effect— proceedings. in n more expedited fashion as the arbitrator would not require a detailed background
introduction of the trade and business surrounding the matter in dispute. On the other
“Article 10. Number of arbitrators (5) The umpire must be supplied with the same documents and other “(16) Unlike sports, engineering and telecommunications, which are clearly
hand, the arbitrator has the benefit of knowing the frequently unwritten and abstract
materials as are supplied to the arbitrators. distinct form the law regulating those activities, no similar distinction
(1) The parties are free to determine the number of arbitrators. customs and practises of the trade. Whenever the arbitration agreement stipulates a
can be drawn between insurance and reinsurance law and insurance and
(6) Orders, directions and awards are to be made by the arbitrators unless, specific qualification of an arbitrator, both parties arc obliged to strictly comply with
(2) [Not applicable]." reinsurance ‘itself. Insurance contract create legal rights and obligations
subject to subsection (9), the arbitrators cannot agree on a matter relating those requirements. A failure to do so would render a nullity of the appointment1
and those whose business it is to negotiate and draft insurance contracts,
(2) For the purposes of subsection (1), the freedom of the parties to determine to the dispute submitted to arbitration. A person would be qualified to be appointed as an arbitrator if only he meets the
whether as underwriters or brokers, need to have some understanding of
the number of arbitrators includes the right of the parlies to authorize • qualifications at the time when the appointment was made.4
(7) If the arbitrators cannot agree on a matter relating to the dispute submitted insurance law. They need, for example, to understand the duty of an insured
third party, including an institution, to make that determination.
to arbitration, they must forthwith give notice of that fact in writing to 8.009 In Owners of the MV Myron v Tradax Export SA (The Myron)* the Court concluded to disclose facts which are material to the risk to the insurer before the
(3) The number of arbitrators in an arbitration is to be either 1 or 3 as decided the parties and the umpire, in which case the umpire is to replace the that the qualification for “[being) engaged in the shipping and gain trades” should be contract is concluded and the scope of that duty. To take another example
by the IIK1AC in the particular case if— arbitrators as the arbitral tribunal with the power to make orders, defined as "a person who is actively engaged throughout all available working hours in illustrated by the facts of the present case, a competent insurer or reinsurer
directions and awards, in respect of that matter only, subject to subsection maritime arbitrations is regarded in practice as being engaged in the shipping trade". of liability risk needs to have sufficient legal knowledge to appreciate how.
(a) the parties fail to agree on the number of arbitrators; and The ratio has been adopted in Pando Compania Naviera SA v Filmo SAS.* There, the even when a policy is written on a "loses occurring" basis, claims under the
(9)(b), as if the umpire were the sole arbitrator.
(b) section 1 of Schedule 23 does not apply. court was asked to determine whether a retired legal practitioner who then practised policy may arise many years after the period of cover has expired. Many-
(8) If the arbitrators cannot agree on a matter relating to the dispute submitted as a full-time arbitrator properly fell under the definition of a "commercial man". more examples of the relevance of legal knowledge to the contractual process
to arbitration but— Donaldson LJ affirmed the principle in The Myron7 and further held that: could be given. Furthermore, the business of insurance and reinsurance on
8.005 The starting point is that the parties have the autonomy to determine the number of
arbitrators. There is no prohibition for parties to elect an even number of arbitrators (a) they fail to give notice of that fact; or any view encompasses not only the placing and underwriting of risks both
Arbitration Ordinance 5.23(3) only comes into play as a fall-back provision when parties “It does not matter whether or not the arbitrator has retired from commerce is the handling of insurance claims. Whether or not a claims manager is legally
(b) any of them fails to join in the giving of notice. still engaged in it. What matters is his practical commercial experience. It is well qualified, he or she cannot in many cases properly assess whether a claim is
have failed to reach any agreement on the number of arbitrators. Once in a blue moon,
if such situation arises, the number of arbitrators would be either one or three, subject to known that the shipping industry has two sides: the marine side and the commercial payable without having some knowledge of the applicable law.
Any party may apply to the Court which may decide that the
the decision of the Hong Kong International Arbitration Centre (HKIAC). side. The parties to this charterparty wish the arbitrators to be chosen from the
umpire is to replace the arbitrators as the arbitral tribunal with the [17] Conversely, barristers and solicitors who practise in the field of insurance
commercial rather than the marine side. In some other case it may be necessary to
8.006 As UNCITRAL Model Law art. 10 does not prohibit parties from constituting an even power to make orders, directions, and awards, in respect of that and reinsurance need to understand practical aspects of the business.
decide whether commercial experience which is unrelated to the carriage of goods
number tribunal, it is foreseeable that a stalemate might occur when an even number of matter only, as if the umpire were the sole arbitrator. It is a safe inference that a lawyer who has specialised in insurance and
by sea — the retail distributive trade, for example — is sufficient under such a
arbitrators sit together. Arbitration Ordinance ss.30 and 31 provide a way out: reinsurance cases for at least 10 years will have acquired considerable
(9) Despite the replacement by the umpire as the arbitral tribunal in respect clause, but that does uot arise in the present case. The use of the words “commercial
practical knowledge of how insurance and reinsurance business is conducted
of a matter, on which the arbitrators cannot agree, relating to the dispute man" would also exclude those whose experience is solely as practising member*
30. Appointment of umpire from meeting and taking instructions from clients, having discussions with
submitted to arbitration, the arbitrator may— of the legal profession. Some of them can rightly be described as "commercial
and reading reports written by expert witnesses, and from reviewing many
In an arbitration with an even number of arbitrators, the arbitrators may, lawyers”, but whilst they serve the commercial world they are not of it"
(a) still make orders, directions and awards in respect of the other insurance contracts and many documents generated in the placing and
unless otherwise agreed by the parties, appoint an umpire at any time after matters relating the dispute if they consider that tit would save underwriting of insurance contracts and in the handling of claims made
they are themselves appointed. 8.010 There were concerns as to whether a barrister specialising in a particular commercial
costs by doing so; or under such contracts. Such practical knowledge will inform and assist their
area could be properly considered as someone with experience in that commercial area.
31. Functions of umpire in arbitral proceedings legal analysis and their ability to give effective representation and advice.
(b) refer the entirety of the dispute to the umpire for arbitration. In Allianz Insurance Pic v Tonicsfar Ltd,* the arbitration agreement required an arbitrator
(1) The parties are free to agree what the functions of an umpire are to be with “not less than 10 years’ experience of insurance or reinsurance". One of the parties (18) It is precisely because the practical and legal aspects of insurance and
(10) For the purposes of this section, the arbitrators cannot agree on a matter
and, in particular— proposed to appoint a practicing Queen’s Counsel with more than 10 years’ experience reinsurance are so intertwined that both market professionals and lawyers
relating to the dispute submitted to arbitration if any one of the arbitrators
in the field of insurance and reinsurance to be the arbitrator. When the case first came who have specialise in the field for many years are commonly appointed as
(a) whether the umpire is to attend the arbitral proceedings; and in that arbitrator’s view, disagrees with the other arbitrator or any of the
arbitrators in insurance and reinsurance disputes ...”
other arbitrators over that matter.
(b) when, and the extent to which, the umpire is to replace the arbitrators 1 Sm pm 1053.
as the arbitral tribunal with the power to make orders, directions aod (b) Qualification of arbitrator's) 4 Pan Atlanrie Group v Hasm eh Insurant* Co o/Isratt Lid 11992] 2 Lloyd's Rep 120
» (1970) 1 QB 527
awards. ***riies in an arbitration are allowed to find people who know the trade and custom well 8.007 4 [1975J QB 742
|° act as arbitrators. In court litigations, not only parties are not at liberty to choose the 1 [1970] 1QB 527.746G-R rv X » Compan J (Comma at] Court. 17 July 2000). Ftdtral fwurmtet Co v 7>®u—trteo QwAwt
1 (2011) I Lloyd's Rep 519 toawKt Co (I 999) 2 All ER (Comm) 131
1 Eafewkd m Ajfewbai QrAiMct t25 Judge, but judges are also frequently neither trained nor equipped with the knowledge
 142 THE ARBITRAL TRIBUNAL
STATUTORY REGIME FOR CHALLENGING AN AMfTRATOft 143
140 THE ARBITRAL TRIBUNAL STATUTORY REGIME FOR CHALLENGING AN ARBITRATOR 141
because no one is allowed to be his or her own judge, there cannot be ideality - The arbitrator regularly advises one of the parties, or an affiliate of ooe of
3. Statitory Regime for Challenging an Arbitrator Whether a particular interest or position held by an arbitrator would raise justifiable 8.014 between an arbitrator and a party. The parlies, therefore, cannot waive the conflict the parties, but neither the arbitrator nor his or her firm derives a pgrafkant
doubt should be assessed objectively. The court would consider whether an objective of interest arising in such a situation." financial income therefrom.
(a) Conflict of interest regime fiir-minded and informed observer, having considered the relevant facts, would
8.019 Under certain circumstances, the arbitrator may sit subject to agreement of all paniw - The arbitrator has a close family relationship with one of the parties, or
conclude that there was a real possibility that the arbitrator was biased
8.011 UNCITRAL Model Law art. 1210 provides limited grounds for challenging a person to after having full knowledge of the conflict of interest.1* These situations are stated io - with a manager, director or member of the supervisory board, or any person
be appointed into the arbitral tribunal: (1) International Bar Association Guidelines to Conflict of Interest the Waivable Red List: having a controlling influence in one of the parties, or an affiliate of one of
(IBA Guidelines) the parties, or with a counsel representing a party
“(1) When a person is approached in connection with his possible appointment “The Waivable Red List
The IBA Guidelines provide a long list which attempt to set out scenarios which might 8.015 - A close family member of the arbitrator has a significant financial or
as an arbitrator, he shall disclose any circumstances likely to give rise to
give rise to a conflict of interest. The list was drafted upon reviewing the statutes and - Relationship of the arbitrator to the dispute personal interest in one of the parties, or an affiliate of one of the parties *
justifiable doubts as to his impartiality or independence. An arbitration, from
case law in a cross-section of jurisdictions.
the time of his appointment and throughout the arbitral proceedings, shall - The arbitrator has given legal advice, or provided an expert opinion, oo the
without delay disclose any such circumstances to the parties unless they have The IBA Guidelines start ofT with reiterating the general principle that every arbitrator 8.016 dispute to a party or an affiliate of one of the parties. The IBA Guidelines remind that, for situations under the Waivable Red List, parties 8.820
already been informed of them by him. shall be impartial and independent of the parties when accepting an appointment to serve. autonomy and conflict of interest must be finely balanced.'*
- The arbitrator had a prior involvement in the dispute.
The IBA Guidelines suggest that an arbitrator shall decline to accept an appointment The IBA Guidelines promote arbitrators to take the initiative to make relevant 8.021
(2) An arbitrator may be challenged only if circumstances exist that give rise
(or refuse to continue to act as an arbitrator) if there are any justifiable doubts as to the disclosures. The Orange List of the IBA Guidelines provide a non-exhaustive list of
to justifiable doubts as to his impartiality or independence, or if he does not - Arbitrator’s direct or indirect interest in the dispute
impartiality or independence of the arbitrator. Like the common law standard,14 the IBA ipecific situations that, depending on the facts of a given case, may, in the ry es of the
possess qualifications agreed to by the parties. A party may challenge an
Guidelines suggest that it would be justifiable if: - The arbitrator holds shares, either directly or indirectly in one of the parties, « parties, give rise to doubts as to the arbitrator’s impartiality or independence.
arbitrator appointed by him, or in whose appointment he has participated, only
an affiliate of one of the parties, this party or an affiliate being privately bell
for reasons of which he becomes aware after the appointment has been made’
“a reasonable third person, having knowledge of the relevant facts and ‘The Orange List
- A close family member17 of the arbitrator has a significant financial interest
circumstances, would reach the conclusion that there is a likelihood that the
8.012 The ground that UNCITRAL Model Law art. 12 offers parties to challenge an arbitrator in the outcome of the dispute. - Previous Services for one of the parties or other involvement in the case
arbitrator may be influenced by factors other than the merits of the case as presented
is based on conflict of interest. Article 12(1) mandates all arbitrators to disclose any
by the parties in reaching his or her decision."15 - The arbitrator, or a close family member of the arbitrator, has a close - The arbitrator has, within the past three years, served as counsel for one of
relevant conflict of interests that they might have, or perceive to have, if they are to
relationship with a non-party who may be liable to recourse on the part of the parties, or an affiliate of one of the parties, or has previously advised
assume office as arbitrators of the dispute. This duty is a continuing one.
The Guidelines further indicates that justifiable doubts would necessarily exist if any 8.017 the unsuccessful party in the dispute. or been consulted by the party, or an affiliate of the party, making die
8.013 The very fact that an arbitrator has failed to disclose a conflict of interest is in itself a of the situations described in the “Non-Waivable Red List" occurred. appointment in an unrelated matter, but the arbitrator and the party , or the
ground that “give[sj rise to justifiable doubts as to his impartiality or independence" - Arbitrator’s relationship with the parties or counsel affiliate of the party, have no ongoing relationship.
Having said so, the duty of disclosure of the arbitrator is not unlimited. The arbitrator is ‘The Non-waivable Red List
- The arbitrator currently represents or advises one of the parties, or an - The arbitrator has, within the past three years, served as counsel against one
under no duty to disclose more than what is necessary for him to do so. In Jung Science
- There is an identity between a party and the arbitrator, or the arbitrator is a legal affiliate of one of the parties. of the parties, or an affiliate of one of the parties, in an unrelated matter
Information Technology Co Ltd v ZTE Corp," Deputy Judge Lisa Wong SC11 held that:
representative or employee of an entity that is a party in the arbitration.
- The arbitrator currently represents or advises the lawyer or law firm acting - The arbitrator has, within the past three years, been appointed as arbitrator
“A failure to disclose, of itself, can be one of the circumstances which together - The arbitrator is a manager, director or member of the supervisory board, or as counsel for one of the parties. on two or more occasions by one of the parties, or an affiliate of ooe of the
with others may give rise to a reasonable apprehension of bias as a party or the has a controlling influence on one of the parties or an entity that has a direct parties.
- The arbitrator is a lawyer in the same law firm as the counsel to one of the
public may well be left with the impression that there was intentional concealment economic interest in the award to be rendered in the arbitration. parties. - The arbitrator’s law firm has, within the past three years, acted for or against
or non-disclosure, or that something was 'wrong about it all*...
- The arbitrator has a significant financial or personal interest in one of the one of the parties, or an affiliate of one of the parties, in an unrelated matter
- The arbitrator is a manager, director or member of the supervisory board, or
Lord Woolf CJ sounded a caution to adjudicators to be circumspect about declaring parties, or the outcome of the case. without the involvement of the arbitrator.
has a controlling influence in an affiliate of one of the parties, if the afBW*
the existence of a relationship where there was no real possibility of it being
- The arbitrator or his or her firm regularly advises the party, or an affiliate of the is directly involved in the matters in dispute in the arbitration. - The arbitrator currently serves, or has served within the past three years,
regarded by a fair-minded and informed observer as raising a possibility of bias. If
such a relationship was disclosed, it necessarily raised an implication that it could party, and the arbitrator or his or her firm derives significant financial income - The arbitrator’s law firm had a previous but terminated involvement in tl* as arbitrator in another arbitration on a related issue involving one of the
therefrom.” case without the arbitrator being involved himself or herself. parties, or an affiliate of one of the parties.
affect the judgment and approach of the judge. If that was not the position, no
purpose was served by mentioning the relationship: Taylor v Lawrence.”" The IBA Guidelines further explain the meaning of the Non-waivable Red List: 8.018 - The arbitrator’s law firm currently has a significant commercial relationship - Current services for one of the parties
with one of the parties, or an affiliate of one of the parties.
- The arbitrator’s law firm is currently rendering services to one of the
"The Non-Waivable Red List describes circumstances that necessarily raise
parties, or to an affiliate of one of the parties, without creating a significant
justifiable doubts as to the arbitrator’s impartiality or independence. For example,
- General Staodud 3(4)(e)
" r«>TSii1 m Aititranaa Ordinance 123 " Defined to include ■ ipouse. nblinf. child, partat or life partner, in addition to any ether family member uaih '
" pool] 4 HK1AD 774. (36] «nd (64) dote relationship exiiti Stmdud 4<ct
“ S^PMlOJS.
“ AiLuiMniteMi
“ (2003) QB 321 fW»] Sun dud 1(2X0
x.
 lift llll AIIIIIIIIAI IIIIIIIINAI MlAl IMONV RMilM* FOR « MAI I «*<«** AM AM*!*****1 !♦*
144 THE ARBITRAL TRIBUNAL STATUTORY REGIME FOR CHALLENGING AN ARBITRATOR 14*
Ilio nihllialot loathes In llio Nnitto facility or school ns another mhii.ai,, (I) When conducting arbitral prineedlng* »* eMftbMg ewy of *+
commercial relationship for the law firm and without the involvement ofthe interest in the award; or nny person having n controlling Influence In ono of or counsel lo ooo of lltn pntllos, or soivea ns mi officer of n piofailond conferred on nn arbitral Irllmnnl try rhin f MtftfNMiee »* hy the R* my
arbitrator. the parties or nn affiliate of ono of the parties or u witness or expert. association 01 social or charitable organisation wllli another mhllinior t* nf llmnn mhllml pirn eedings, Ih# arbitral iilbooel le te*f»r*#»4
coimnol lot ono of llio parlies,
A law firm or other legal organisation that shares significant fees or other - If the arbitrator is a former judge, lie or she bus, within the pnst three years, (n) In he Imlepemlnnl,
revenues with the arbitrator's law firm renders services to one of the parties, heard a significant enso Involving ono of the parties, or nn affiliate of ono ol I ho nrhllmtor wiot n speaker, moderator or organiser In ono or mini
conforonoea, or participated in seminars or working parties of a profeailonil, (h) lo mil fnlrly nml Irnpnrllnlly on between the ■»**•*€ e
or an affiliate of one of the parties, before the Arbitral Tribunal. the parties. reasonable oppoilnnlly In prenettl their *■#••• mA <le#l wm* »M
not Ini or clmrltnhlo organisation, wllli another mhllinior or counsel In llu
- The arbitrator or his or her firm represents a party, or an affiliate of one of pillllON, casts of llmlr opponents, nnd
- Other circumstances
the parties to the arbitration, on a regular basis, hut such representation doet (v) lo unn procedure! llml nro npprofolnm lo llm parllRic evldteg
not concern the current dispute. - The arbitrator holds shares, either directly or Indirectly, that by reason of Contacts holvvoon llio mhllinior mid ono of llio parlies unnecessary delny nr expense, no nn lo provide • fwr two own
number or denomination constitute a material bolding In ono or the parties,
llio mhllrnlor linn lintl mi Inllhil contact wllli n pnily, or mi nlllllnlo of * resolving Ihe dlnpulo lo which llm mhllml proceed!ogo rake#
Relationship between an arbitrator and another arbitrator or counsel or nn nffilintc of ono of the parties, this pnily or nfflllnlo being publicly listed,
pnily (or lliolr counsel) prior lo nppohilinoitl, if lliln t onlnol In llm lied In
- The arbitrator and another arbitrator are lawyers in the same law firm. - The arbitrator has publicly advocated a position on llio enso, whether in a llio mhllrnlor'» availability mnl ipinlllh nllonn lo servo, or lo llio narnea nf Ailillmllori Ordinance n 40 rmpilmn pmllon lo he imnlnd wllh equellty fMe *♦**«*•« i®J*
published paper, or speech, or otherwise, ponnlhlo candidates lor n i hall person, mol did mil nddronn llio oiorlln nr llml due pi neefta In ohftoivm! in llm i onun of llm mhllml proceeding In tomiwestte dm
- The arbitrator and another arbitrator, or the counsel for one of the parties,
procedural aspects of llio dlnpulo, oilier llimi lo provldo llio mhllinior wllli a potion under n 41, Ihe mhllml Irllmnnl, when condiudlng llm prmeetlinga ut mmg
are members of the same barristers’ chambers. - The arbitrator holds a position with the appointing authority with respect to
basic understanding of llio case, any nf ihe powofft conferred upon li, l« reipilied
the dispute.
The arbitrator was, within the past three years, n partner of, or otherwise
I lie mhllrnlor holdn mi Insignificant mnoiinl of nlimon In mm of llio paMlM,
affiliated with, another arbitrator or any of the counsel in the arbitration. - 'Hie arbitrator Is a mnnngcr, director or member of the supervisory hoard, (1) In he Imlepemlenl I lain U nn uh|e< live leal (eg, nil mhllrnlor nloodd nm Im««
or mi nlllllnlo of ono of llio pmllon, width In publicly llnlnd
or hns a controlling influence on nn affiliate of ono of the parties, whore the n relnllonahlp wllh n pmly lo llm proceedings or annmoite • lomly «mu*«u.| t«.
- A lawyer in the arbitrator’s law firm is nn arbitrator in another dispute
affiliate is not directly Involved In the matters in dispute in the arbitration." I hr mhllrnlor nod n manager, director or inonihor of llio nupoivlnoiy hoaol, llml pmly),
involving the same party or parlies, or nn affiliate of one of the parties.
or nny ponton having n ooitlrollln^ Infliionuo on ono of llio pmllon, or an
The IBA Guidelines expressly suggest that any doubt as to whether certain facts nr 8.022 (2) lo m I frailly nml linpmllnlly Imlwoeu llm pmllon nml giving Ihmo n ioo^omRIo
A close family member of the arbitrator is a partner or employee of the law nfflllnlo of ono of llio pmllon, linvo work oil together nn jolnl experts, or in
circumstances that aro disclosed should be resolved in favour of a disclosure."’ That oppoilnnlly In pmamil limitcases nml lo deal wllh llm • aees of llmlr tqqwemH*
firm representing one of the parties, but is not assisting with the dispute. nnollior profonnlonnl capacity, Including on arbitrators In llm mono mao
uld, the IBA Guidelines also indiente that situations listed In Ihe Green I.lst would A t l«nr example of Idea la whom mi e rid I mil h Ima pt«d*u»oiliM».l dm imm om4
- A close personal friendship exists between nn arbitrator and a counsel ofi never lead to disqualification under the objective test: I ho mhllinior linn n rolnllonnhip wllh mm of llio pmllon or lln nfflllalM approached llm mhllmllon wllh e piejmlh «d mind lo llm poioi of Ui»a Wmulo
party. through n not Ini inodln network." lo rat# of Ihe peillea,
“The Green List
Enmity exists between an arbitrator nnd counsel appearing in the arbitration. 8,02.3 Ono nliould nonollmlonn nolo llml llio III A (luldollnon nhonld mil ho piofonnod nn lit* (1) To use pint oilmen ihnl me nppiopilnlo In the particular •»* ll la dm duly •«! dm
- Previously expressed legal opinions hlhlo nml followed dogmatically. In If7I hi v M Stln lllulS' llio ptiglisli High Court mhllml lillmunl lo evold uuimmaamy delay or aaponae, an m lo provldo a lo*.
- The arbitrator has, within the past three years, been appointed on more than
emphasised llml llio IMA <hildollnon do mil hind llio court. I ho Guidelines, iMMOlhlUM, nmmia for maolvlug llm dlapuio lo width llm mldirel prmmodiuga r*Uu n u rut
three occasions by the same counsel, or the same law firm. - The arbitrator hns previously expressed a legal opinion (such ns In n law
offor vnhmldo assistance mid m in nn n convenient checklist for llm court lo waiulM llm mhllml Irllmnnl In enaum llml llm overriding nhjecllven of llm Affauietu*
review article or public lecture) concerning an issuo that also arises In the
- The arbitrator and another arbitrator, or cv el for one of the parties in the whnhor nn arbitral Irllmnnl In In confllul of Inloronl,11 Ordinance, Vll. "lo Imllllnlo llm fralr nnd apoody resolution of dlapoioa try
arbitration (hut this opinion is not focused on the enso).
arbitration, currently act or have acted ithin the past three years mhllmllon wllhoul unueteaamy #apenae"M me n« hloved
as cocounsel. (h) Nt*rin ill justice regime
- Current services for otic of the pnrtlcs
1,1 f'w IV Ihe court nimiiimrlnod llm pthmlpln* in lonalinlug wtmilmr no Mbilfaioi'o leta
8.024 Arbllrnllon Ordlrmnco nM> piovldon llml nn mhllinior hnn n duly lo Ironl llm pnrll**
Relationship between arbitrator and party sM^Tvs Involved in the arbitration - A firm, in association or in nllianco with tho arbitrator*n law firm, hut that "mdm i givua i lao to jimiiftralila comlmla umfm Imlh llm 'Voullhl of luloroal taoim* '
hofoio him otpmlly:
docs not share significant fees or other revenues with the arbitrator’s law •»'l dm "mtiuml Juallco loghno"!
- The arbitrator’s law firm is cu«Tently«3Bj^ ersely to one of the parlies,
firm, renders services to one of the parties, or an affiliate of one of llio
or an affiliate of one of the parties. ^ 4o. Article 18oflJNCITHAI.Model Law (Equal treatment nf partita)
pnrtlcs, in an unrelated matter. (I) I ho tpmallon wlmllmr olrcumalmu o« oalal width glvo Mao lo juallfiehle
- The arbitrator has been associated wit. « or an affilintc of one of the (I) Subioclloni (?) nml (3) Iwvo effect In niihnlilnllon for mllole IH of ihe na lo mi mldlmlor'a linpeillnllly la lo Im doletnilimd hy applying llm tomratuM
parties, in a professional capacity, sudSfH ner employee or partner - Contacts with another arbitrator, or with counsel for one of tho parties UNCITHAI. Model l ow. lew leal for Hppnmnl Idea14
A dose personal friendship exists bem^L abitrator and a manager of - The arbitrator has a relationship with another arbitrator, or with the counsel for (?) I ho panics muni ho treated wllh equality. (?) llm leal la wlmllmi llm lull udndod mid luliHimnl oliaoivoi, Imvlng itowidored dm
lor or a member of the supervisory ■ a party; an entity that has a one of the parties, through membership in tho same professional association, Ibt la, woulil tomlmio llml llmio wna n mnl poaalhillly Uml llm IiiIhumI w«a bmamd m
'"lie interest in the award “J in the arbitration; or «nV or social or churitnhlc organisation, or through a social media network.
oiling shareholder interest, - The arbitrator and counsel for one of the parties have previously served * J'*a«i.|«4 m Aitiu.u.m OImiw < I
or a witness or expert together ns arbitrators. „ M°i»|owin' tat |t mmh| |ai|
" |JOI ?| I All lie (<'owtn)9ll (l/K) I lti y h^tU ^, JIMI| UU 411,11 »|. A t M |JOI1111 taH • m aei MM aa^m oam*^
" a»« Cm Slut* ftihmt I> Famm \ IOM) I All OH (t miuh) iw), | *0| (PofylnmU v Fiinhm |>0|4| > ** a *-fFinr«i|JO||| | All BO (tuuMa) MO,|ll|
director or a rncnibef
is a direct economic
l H (< •Mitm) IJV, | MW| (IImiiMw I, m IImWm l.l ibm w»t) C/A v h | Jol 11 J Uoy4’t H»v W|, | M| (70| dl*» 8 » Ar.*i//|JOO)| l At HMI01|d »m4
Sirndud J{«) *nd Rd),
 146 THE ARBITRAL TRIBUNAL STATUTORY REGIME FOR CHALLENGING AN ARBITRATOR 147
144 THE ARBITRAL TRIBUNAL STATUTORY REGIME FOR CHALLENGING AN ARBITRATOR 14*
- Hie arbitrator teaches in the same faculty or school as another arbitrator (3) When conducting arbitral proceedings or exercising any of the powers
commercial relationship for the law firm and without the involvement of the interest in the award; or any person having a controlling influence in one of or counsel to one of the parties, or serves as an officer of a profession*! conferred on an arbitral tribunal by this Ordinance or by the parties to any
the parties or an affiliate of one of the parties or a witness or expert. association or social or charitable organisation with another arbitrator or of those arbitral proceedings, the arbitral tribunal is required—
arbitrator.
counsel for one of the parlies.
- A law firm or other legal organisation that shares significant fees or other - If the arbitrator is a former judge, he or she has, within the past three years, (a) to be independent;
- The arbitrator was a speaker, moderator or organiser in one or more
revenues with the arbitrator’s law firm renders services to one of the parlies, heard a significant case involving one of the parties, or an affiliate of one of (b) to act fairly and impartially as between the parties, giving them a
the parties. conferences, or participated in seminars or working parties of a professional,
or an affiliate of one of the parlies, before the Arbitral Tribunal. reasonable opportunity to present their cases and to deal with the
social or charitable organisation, with another arbitrator or counsel to the
parties. cases of their opponents; and
- The arbitrator or his or her firm represents a parly, or an affiliate of one of - Other circumstances
the parties to the arbitration, on a regular basis, but such representation does (c) to use procedures that are appropriate to the particular case, avoiding
not concern the current dispute. - The arbitrator holds shares, either directly or indirectly, that by reason of - Contacts between the arbitrator and one of the parties unnecessary delay or expense, so as to provide a fair means for
number or denomination constitute a material holding in one of the parties, resolving the dispute to which the arbitral proceedings relate.
- The arbitrator has had an initial contact with a party, or an affiliate of i
- Relationship between an arbitrator and another arbitrator or counsel or an affiliate of one of the parties, this party or affiliate being publicly listed. party (or their counsel) prior to appointment, if this contact is limited to
- The arbitrator hns publicly advocated a position on the case, whether in a the arbitrator’s availability and qualifications to serve, or to the names of Arbitration Ordinance s.46 requires parties to be treated with equality. This ensures *.025
- The arbitrator and another arbitrator are lawyers in the same law firm.
published paper, or speech, or otherwise. possible candidates for a chairperson, and did not address the merits or that due process is observed in the course of the arbitral proceeding. To summarise the
- The arbitrator and another arbitrator, or the counsel for one of the parties, procedural aspects of the dispute, other than to provide the arbitrator withi position under s.45, the arbitral tribunal, when conducting the proceedings or exercising
are members of the same barristers’ chambers. - The arbitrator holds a position with the appointing authority with respect to basic understanding of the case. my of the powers conferred upon it, is required:
the dispute.
- The arbitrator was, within the past three years, a partner of, or otherwise - The arbitrator holds an insignificant amount of shares in one of the parties,
- The arbitrator is a manager, director or member of the supervisory board, (1) To be independent. This is on objective test (eg, an arbitrator should not have
affiliated with, another arbitrator or any of the counsel in the arbitration. or an affiliate of one of the parties, which is publicly listed.
a relationship with a party to the proceedings or someone closely connected to
or has a controlling influence on an affiliate of one of the parties, where the
- A lawyer in the arbitrator’s law firm is an arbitrator in another dispute - The arbitrator nnd a manager, director or member of the supervisory board, that party).
affiliate is not directly involved in the matters in dispute in the arbitration.’’
involving the same party or parties, or an affiliate of one of the parties. or any person having a controlling influence on one of the parlies, or an
(2) To act fairly and impartially between the parties and giving them a reasonable
The IB A Guidelines expressly suggest that any doubt as to whether certain facts or 8.022 affiliate of one of the parlies, have worked together as joint experts, or in
- A closo family member of the arbitrator is a partner or employee of the law opportunity to present their cases and to deal with the cases of their opponents
circumstances that are disclosed should be resolved in favour of a disclosure.1* That another professional capacity, including os arbitrators in the same case.
firm representing one of the parties, but is not assisting with the dispute. A clear example of bias is where an arbitrator has predetermined the issues and
said, the IBA Guidelines also indicate that situations listed in the Green List would
- The arbitrator has a relationship with one of the parties or its affiliates approached the arbitration with a prejudiced mind to the point of being hostile
- A close personal friendship exists between an arbitrator and a counsel of i never lead to disqualification under the objective test:
through a social media network.” to one of the parlies.
party.
The Green List 8.023 One should nonetheless note that the IBA Guidelines should not be professed as (be (3) To use procedures that arc appropriate to the particular case. It is the duty of the
- Enmity exists between an arbitrator and counsel appearing in the arbitration arbitral tribunal to avoid unnecessary delay or expense, so as to provide a fair
- Previously expressed legal opinions bible and followed dogmatically. In W Ltd v M Sdn Bhd,K the English High Court
- The arbitrator has, within the past three years, been appointed on more than emphasised that the IBA Guidelines do not bind the court. The Guidelines, nonetheless, means for resolving the dispute to which the arbitral proceedings relate: it is for
three occasions by the same counsel, or the same law firm. - The arbitrator has previously expressed a legal opinion (such as in a law offer valuable assistance and acts as a convenient checklist for the court to examine the arbitral tribunal to ensure that the overriding objectives of the Arbitration
review article or public lecture) concerning an issue that also arises in the whether an arbitral tribunal is in conflict of interest.11 Ordinance, vis. “to facilitate the fair and speedy resolution of disputes by
- The arbitrator and another arbitrator, or counsel for one of the parties in the arbitration (but this opinion is not focused on the case). arbitration without unnecessary expense’’11 are achieved.
arbitration, currently act or have acted together within the past three years (b) Natural justice regime
as cocounsel. - Current services for one of the parties ^ Tv the court summarised the principles in construing whether an arbitrator’s *.026
8.024 Arbitration Ordinance s.46 provides that an arbitrator has a duty to treat the parties
conduct gives rise to justifiable conducts under both the “conflict of interest regime"
- Relationship between arbitrator and party ond others involved in the arbitration - A firm, in association or in alliance with the arbitrator’s law firm, but that before him equally:
•nd the “natural justice regime":
docs not share significant fees or other revenues with the arbitrator’s law
- The arbitrator's law firm is currently acting adversely to one of the parlies, firm, renders services to one of the parties, or an affiliate of one of the 46. Article 18 of UNCITRAL Model Law (Equal treatment of parties)
or an affiliate of one of the parties. (1) The question whether circumstances exist which give rise to justifiable doubts
parties, in an unrelated matter.
(1) Subsections (2) and (3) have effect in substitution for article 18 of lb* as to an arbitrator’s impartiality is to be determined by applying the common
- The arbitrator has been associated with a party, or an affiliate of one of the UNCITRAL Model Low. law test for apparent bias.14
- Contacts with another arbitrator, or with counsel for one of the parties
parties, in a professional capncity, such as a former employee or partner.
(2) The parties must be treated with equality. (2) The test is whether the fair-minded and informed observer, having considered the
- The arbitrator has a relationship with another arbitrator, or with the counsel for
- A close personal friendship exists between an arbitrator and a manager or facts, would conclude that there was a real possibility that the tribunal was biased11
one of the parties, through membership in the same professional association,
director or a member of the supervisory board of: a party; an entity that has •
direct economic interest in the award to be rendered in the arbitration; or any or social or charitable organisation, or through a social media network.
, ***«»ch*4 ii Affotriboo Oi Annul« J
person having a controlling influence, such as a controlling shareholder interest, - The arbitrator and counsel for one of the parlies have previously served , U0| 7) BWHC 545 (Coma). (95).
on one of the parlies or an affiliate of one of the parties or a witness or expert " (20I7| 1 All FR (Coma) 911 I~*h*il (VK) 04 » Bmftld rwptnlu 04 (2000) QD 451.117). A * B (2011) 2 UoyS'i R»f 591. (221 Ft+m,
together as arbitrators. " Sm ilio Sum Fishing Co v Fan on (2015) I AU ER (Comm) 560. (SI) (Foppltv*!) J), Cqf'h 04 v Bingham |20l4| I * , C'0* Fmrim (2015) I AU ER (Comm) 560, |JI|.
- I nmity exists between an arbitrator and a manager or director or a mcnibcr I R (Comm) 129. (109) (llainblm ), u HimMcn LJ mm) CJA v B (2011) 2 Uoyd'i Rrp 591. |7S)-(7I) (Ft** 0 Magill |2002) 2 AC JS7. |IOJ|(L«d Hop*)
of the supervisory board of: a party; an entity that has a direct economic ‘'•will Simdiid J(«) uut J<d)
 159 THZ ARBITRAL TRIBUNAL
NATURAL JUFTICZ AND ARBITRAL TRIDL.’NAL 151
NATURAL JUSTICE AND ARBITRAL TRIBUNAL 14*
Jockey Club do not take part in its management and could not be said to have my ftrt there was a bias when the jury renders a guilt) verdicL Lord GofT* laid dowi fee
common interest with the Club pcesario where tbe court would hold there to be an apparent bias, a teat which applies
oj a doc tnavy fdssm-e ar i (b) Direct pecuniary or proprietary interests
entry pact nor! be or Ae has f*Dy mdensood boft to both judges, jurors and arbitrators:
8.032 Nonetheless, this rule should be construed in a stringent manner. Unless it is clear (ha
(i) The Dima rule
o—phcai sod is aware feat judges tad c6e sibcab an arbitrator has direct financial interest, the court would be reluctant to bold (hat«
t is trite law (bat an) judge or arbitrator should doc be adjudicating in a cause if he 8.029 *Ts conclusion, I wish to express my understanding of fee law as follows. I feznfc it
Tbe cfarmed observer is informed oa aD mftn »ha arbitrator would be caught by fee Dima rule. In AT de T Corp r Saudi Cable Co,9 fe
taesdf has direct pecuniary of proprietary interest In other words, this is tbe principle possible, and desirable, feat the same test should be applicable m all cases of appweM
£s overall social, political or geographer chairman of tbe arbitral tribunal was a non-executive director and shareholder ■ * bias, whether concerned wife justices or members of other inferior Trihn—ii. or
ftc do ooe should be a judge of his own self. This rule originates from fee historical company and also an unsuccessful bidder for the agreement in relation to fee daspiea with jurors, or wife arbitrators. Likewise I consider feat, in cases concerned wife
process tbe practices of those ievohed as partes. s^ority of Dimay Proprietor? ofthe Grcwtd Junction Cana/," where Lord (Tottenham that subsequently arose between the parlies. The Court of Appeal (in upholding fee firs jurors, fee same test should be applied by a judge to whose attention fee pomhlty
Bade a decree whilst he had substantial shareholdings of fee defendant company. When instance decision) confirmed that tbe chairman of tbe arbitral tribunal was not is direct ofbias on fee part of a juror has been drawn m fee course of a triad, and by fee
png his reasons of setting aside fee decree. Lord Campbell said feal:n financial interest from tbe arbitral proceeding.
The far-mzaded observer 25 doc to be coeftsed Court ofAppeal when it considers such a question on appeal Furthermore. I feiak it
enoughs the comphaaC and (be tesJ ensares that there unnecessary, in formulating fee appropriate test, to require that fee court should look
“No one can suppose that Lord Cottenham could be, in fee remotest degree, (ii) The De Minimis rule
m a Tbe hfigartf lacts (be objectivity which is fie at fee matter through fee eyes of a reasonable man, because fee court m cases such as
influenced by the interest that be had m his concern, but, my Lords, it is of the last
of tbe faar-ra-ndrd observer He is far from dap—k—c. Iibgaeics 8.033 Tbe difficulty nonetheless seems to be bow strictly (or loosely) this rule should be applied these personifies the reasonable man, and in any event the court has first to ascertam
importance that fee maxim that no man is to be a judge in his own cause should be
dnevs aad most litigants are Hkdy to oppose In this regard, there seems to be two diagonally opposite and competing schools of tbe relevant circumstances from tbe available evidence, knowledge of which would
held sacred And that is not to be confined to a cause in which he has an interest
they perceive might Mnperil feev prospects of success evea if thoughts. In R vRand”Blackburn J held that "there is no doubt that any direct pecunury not necessarily be available to an observer in court at the relevant time. Fmafly. for
Since I have had tbe honour to be Chief Justice of fee Court of Queen's Bench,
objectively, their perception is doc well founded.2* interest, however small, in tbe subject of inquiry, does disqualify a person from wring the avoidance of doubt, I prefer to state the test in terms of real danger rather than
we have again and again set aside proceedings in inferior tribunals because an
as a judge in the matter". Similar sentiment was expressed by Slade J in Rv Camborne real likelihood, to ensure that tbe court is thinking in terms of possibility rather than
(5) AS to give rise to fee possibility of appacr* bias sect individual, who had an interest in a cause, took a part in tbe decision. And it will
Justices, a p Pearce,*0 who held that a strict application of the rule in Dima should be probability ofbias. Accordingly, havmg ascertained fee relevant circumstances, fee
be have a most salutary influence on these tribunals when it is known that this high supported. On the other hand, there were equally authoritative precedents which held court should ask itself whether, having regard to those circumstances, there was a
Court of last resort, in a case in which fee Lord Chancellor of England had an that the rule in Dima only operates to exclude interests that go beyond the de mowed real danger ofbias on fee part of tbe relevant member of the tribunal in m
interest, considered feat his decree was on feat account a decree not according to range. Lord Bingham CJ in Locabcdl (UK) Lid v Bayfield Properties Ltd*’ opined that fee sense that he might unfairly regard (or have unfairly regarded) wife favom. or
law, and was set aside. This will be a less to all inferior tribunals to take care not
4. Natural Justice and Arbitral Tribunal disfavour, fee case of a party to the issue under consideration by him ..."
only that in their decrees they are not influenced by their personal interest, but to "That will often be tbe case where judge bolds a relatively small number of shares in a
avoid appearance of labouring under such an influence." laqje company and the sums involved in fee litigation are not as such as could, realistically,
(a) ttlK is aataral jastke? (U) The refined rule
affect fee value of the judge's shares or fee dividend he could expect to receive."
hPand on Takeover cmd Mergers v William Cheng Ken Man ” the Privy Council endorsed 8.030 The modem rule is now contained in the House of Lords' decision of Porter w Magdl ® 1036
US? The crmantMim tim as arbitrator should not sit on fee tribunal if his appomtmerf
* fine of earlier authorities*4 apptyiog fee Dimer rule. The test applied by Lord Keith is The House of Lords would consider after assessing ail surrounding evidence whether
wwdd gyve nse to justifiable doubts to his impartiality or independence means flat the 8.034 Despite the seeming debate as to how significant the direct interest needs to be before
arhDxal Sfeonal should act judicially. Tbe fundamental principle of acting “judiciafly’ ^whether in all fee circumstances ... [it] lead|s] properly to the conclusion feat there was a an arbitrator was acting in real danger or possibility of bias: whether tbe fair-minded
one may safely come to the conclusion that there is an affront to natural justice, ooe
red danger of bias". There, a panel member on fee Panel on Takeover and Mergers wrote and informed observer, having considered tbe facts, would conclude that there is a real
m praMBced in fee tnne-hooourrd quote of Lord Hewsrt feat “justice not only be should never lose sight of the fact that tbe cardinal principle in Dima remains good
dose bat rhmid manifestly and fundamentally be seen to be done”.21 In fee context d • letter to fee chairman of fee Securities and Futures Commission. Bias was alleged on the possibility that the tribunal was biased. This test has been adopted in Hong Kang after
law and remains to be the rule of thumb when assessing whether an arbitrator had been
pan of feat member mentioned in fee terms of tbe letter on the fact that be was a director Pacific China Holdings Ltd v Grand Pacific Holdings Ltd.”
arbnn. Donaldson U said feat* "judging his own cause". Notably, different authorities42 have proven that the coart
Kd substantial shareholder of a company that had entered into an agreement with the adopted the practice of resolving any doubt therein in favour of disqualification. (HI) Personal and non-economic interests
The xspartance ofjustice is, of course, paramount, but, subject to feat fee appear*** Ct*np*ny controlled by fee respondent. Allowing the appeal, the Privy Council deemed the
dleged pecuniary interest too remote and contingent. No presumption ofbias was involved la Locabcdl (UK) Ltd v Bayfield Propertia Ltd,41 Lord Bingham considered that direct 103"
of justice is just as important in arbitration as it is in litigation, even if fee audience (c) Possibility ofbias and apparent bias
Pecuniary interest could properly be extended to those in which a judge or an arbitrator
is more restricted and fee parties are presumed to have agreed to arbitration 00 tbe kHKSAR v/o/ot Terence Hung” Yeung JA* held that a fair-minded and informed 8.031
(1) Rule In Rv Cough of uReal Danger of Bias " *** “personal interests and connections” with the parties which may give rise to conflict
bams feat procedure would actually aod apparently tend to a just result." oenber of tbe public would not have any reasonable apprehension or suspicion that
8.035 In J? v Gough,4* the appellant was convicted after a trial before a jury. A juror was °f interests. In doing so, Lord Bingham provided a non-exhaustive list of area which
8*%es, who are members of the Jockey Club, might have been biased against the •night give rise to those conflict:
8B28 The types ofconflict of interests that an arbitrator might encounter could be categorically later found to be the neighbour of the brother of the appellant. The appellant argued
aPPcllant due to their pecuniary interest in the Oub. His Lordship distinguished that
divided a*o rwo branches direct pecuniary, or proprietary interests, and a real danger, c**« wife Lord Hoffmann’s connection with Amnesty International in R v Bow Street (1) Religion;
or powbibty of bias. The prior would attract an automatic disqualification, whilst ** Metropolitan Stipendiary Magistrate, a p Pinochetf since general members of the
bMer very modi depends 00 tbe specific factual matrix of fee case. * [2000] 2 All EX (Coma) 62$. (2) Ethnic or national origin;41
" (1*65-66) LAI QB 230
* (1W5) 1 QB 41. 47 "It u. of coon*, clear that my (krect pecan cry or propneury totere* is Ike tobjod bib* *
««3?)3HLC**759. 10 EX 301 proceeds*, however *o»eU. operate* a* aa automatic diaquahficaooo.’ 670C-O
r dm Home ^ r pOPt) 1 WUt HI*. [»Hn A *B [3011] 2 Uayfi *+ ** **.7*3.315. “ [2000] QB 431. [I] See alao Lord Btacham CJ erpreedy affirmed (he Aastrabaa poaboa m Clmot Pry Ud * A"****1 P0MJ2AC 337.
P*H2*i „ 1*^5] 2 KKL* 302 end Hr- Zealand Bembng Croup Ltd [1999] 2 VX 373 (Charia JA) P«7J 3 HKIAD 741. [15]
' HMemtimrrnm-yef%emfoe Ae Home L rpmremma &M) \ WLA2416,p] (Lae4 Hopeh Har* r HRH trio* Tk*w wd.4* X r Smjci Jtone a a p UcCantn (1*24) I KB 254. k r Rand (1165-66) LJt I QB 2V). bin r ° BTR Industries South Africa (Try) Ltd v Meta! and Allied Worker s Union 19*2 (3) SA 673. R * Inner West Led* POOOJQB431.
AX A- RehdAmAhdMAX ptUJ 3 Kl JW [69J Lad t>y*M MF; . t^mon ofif* Grand JmutUm Com* (1152) 3 HL Ca 759.10 EX 301 *W. tee example, Arhitranan between the Owner, ofthe Steamship Cetalma * Owners ef+* Motor >W—IWoema (WH
Conner, ex p Dallatlio [1994] 4 All EA 139. AucUtmut Ctstino Lsd * Casino Control Authority [1995] 1 NZLA 1<1
- Sa «a —p<r. , Bmphmt p91«] 2 A1EA (C—■) 129 <CAOC 233/2009. [2010] HKEC 674). u [1993] AC 646 *1 U L Aep 360 — *6e« *a artatraK* u* habrn n mol koarworthy
* *»S—aA—caa f [1924J 1 KB 254. 23* . *Y«WgV.p&CBMM
- /a»v Fmwlenqh »trimmer Od A OAe Sddh Ltd \\MA\ I Ll*y4'i X*p 237.240 I AC 119 &a alto pan I 031
 154 TIIF ARBfrRAL TRIBUNAL NATURAL JUSTICE AND ARBITRAL TRIBUNAL IS5
152 THE ARBITRAL TRIBUNAL NATURAL JUSTICE AND ARBITRAL TRIBUNAL 153

B. Previous professional relationship between an arbitrator and legal representatives his work as an arbitrator. The arbitrator makes other disclosures where, after
(3) Gender; must not be judge in his own cause, since the judge will not normally be himself before him checking, he has knowledge of his firm’s involvement with the parties, and
benefiting, but providing a benefit for another by failing to be impartial.
(4) Age; 8.042 The legal community is a small one. There might be a high chance that a judicial officer would have made a disclosure here if he had been alerted to the situation.”
In my judgment, this case falls within the first category of case, viz where the judge would have previous dealings with a counsel before him. Equally, the arbitration D. Arbitrator previously acting for or against a party as legal representative
(5) Class; is disqualified because he is a judge in his own cause. In such a case, once it is community is also a small one. Counsel and solicitors would easily have different in other proceedings
(6) Means; shown that the judge is himself a party to the cause, or has a relevant interest in engagements with each other. Repeated appointments by the same party or same
Generally, an arbitrator previously acting for or against a party in another proceeding as 8.046
its subject matter, he is disqualified without any investigation into whether there solicitor firm indicating a profound professional relationship would sometimes subject
(7) Social background; legal representative would not be barred from being the arbitrator in the instant arbitral
was a likelihood or suspicion of bias. The mere fact of his interest is sufficient to a real possibility of bias.55 Equally, a close personal friendship between the arbitrator
proceeding.
(8) Educational background; to disqualify him unless he has made sufficient disclosure ... I will call this with the counsel or solicitor before him would give rise to a real possibility of bias.54
‘automatic disqualification"’. That said, in ASM Shipping Ltd of India v TTMJ Ltd of England," the English court had 8.047
(9) Employment background; 8.043 In A v B,” a challenge was launched against the arbitrator on the basis that he had
considered that the Queen’s Counsel who was appointed as an arbitrator should have
received previous instructions from the solicitor firm representing one of the parties.
(10) Previous political associations; recused himself as he has appeared for a third party in a matter disclosure application
(v) Challenges In arbitration The hearing subsequently revealed that the arbitrator has received just two sets of against one of the parties for which he now sat as an arbitrator. One of the issues in
(11) Membership of social, sporting or charitable bodies; A. Arbitrator appointed by the same parly in similar disputes instructions from the solicitor firm. The court dismissed the challenge on the basis that tbe arbitration was an allegation that a party has dishonestly approached disclosure
the involvement between the arbitrator and the solicitor was not substantial enough to
(12) Masonic associations; With those principles in mind, we now turn to examine specific situations which the 8.039 materials. Given the similar nature of the issues, the court considered that there might
give rise to a real possibility of bias, as a “substantial proportion” of his instructions be a justifiable risk that the arbitrator would be biased.
court consider (or do not consider) there to be an affront of natural justice. In some cases,
(13) Previous judicial decisions; have not come from the same solicitor firm.
a party (Party A) would appoint an arbitrator to preside over two disputes with similar
8.044 In Rustal Trading Ltd v Gill & Duffus SA,i% the court dealt with a challenge that tbe E. Arbitrator’s behaviour with counsel appearing before him
(14) Extra-curricular utterances; factual backgrounds but against different parties (namely, Party B and Party C) and in
two different arbitrations. There were complaints that in doing so, the arbitrator would arbitrator had a previous grudge with one of the parties. One of the parties, in tbe In Symbion Power LLC v Venco Imtiaz Construction Co,a the court has had the opportunity 8.048
(15) Previous receipt of instructions to act for or against any party; course of the arbitration, suggested that there had been “business dealings in the past" to deal with the conduct of an arbitrator after appointment and the relationship he should
give rise to apparent bias as he would have heard evidence in one set of arbitration (eg,
(16) Solicitor or advocate engaged in a case before him; and from Party B) and therefore have a preformed view where the other party (Party C) which might affect whether the arbitrator could deal with the dispute justly. This was, maintain with counsel appearing before him. In dealing with a fall-back argument as to
would not have the opportunity to respond. unsurprisingly, rejected by Moore-Bick J.5* whether the award should be remitted for the arbitral tribunal to reconsider on the matter, the
(17) Membership of the same inn, circuit, local law society or chambers. applicant disclosed that an email was sent by a party-appointed arbitrator to the arbitration
In H v Z.,50 the court expressly rejected that an arbitrator, who was subsequently 8.040 C. Arbitrator’s firm had commercial dealings with one party counsel for the party who appointed him. The email was titled “HIGHLY CONFIDENTIAL:
ippointed as an arbitrator in a second arbitration by a party who was also a party to NOT TO BE USED IN THE ARBITRATION” and was not copied to any other member of
(Iv) Lord Hoffmann In ex p Pinochet 8.045 In IVLtdv MSdn Bhd,w the sole arbitrator, who is a Canadian lawyer, was alleged to have
the first arbitration without the consent of the other party in the first arbitration, would tbe arbitral tribunal or any representative of the other party. In the email, the party-appointed
8.038 In R v Bow Street Metropolitan Stipendiary Magistrate, ex p Pinochet * the House of an apparent bias or perceived conflict of interest. The basis was that the arbitrator’s firm
•mount to an appearance of bias justifying a challenge. The court considered that no arbitrator indicated to the arbitration counsel that both himself and the other parly-appointed
Lords unprecedentedly ordered a re-hearing on the basis that Lord Hoffmann, a law lord (but not the arbitrator himself) regularly advised an affiliate of the defendant (but not
fair-minded observer would regard an arbitrator who was fully informed as to the arbitrator were having highly negative views with the chairman of the arbitral tribunal. He
who sat at the hearing in the House of Lords, was actually a director and chairperson the defendant himself), and, as a result, the arbitrator's firm derives substantial financial
relevant circumstances to be biased, and correctly (or incorrectly but honestly) judged •bo mentioned that he would encourage the chairman to resign. The applicant argues that
of Amnesty International Charity Ltd, which is an intervener of the proceeding, and income. The complaint was that this set of circumstances falls under the “non-waivable
lhat the circumstances did not give rise to a possibility of apparent bias. *he working atmosphere between the arbitral tribunal members indicated that this would not
protested against General Pinochet strongly. The House of Lords held that Lord red list" under the IBA checklist.41 In dismissing the application and confirming that
In Halliburton Co v Chubb Bermuda Insurance Ltd,i} the English Court of Appeal 8.041 be a case suitable to be remitted for the arbitral tribunal’s reconsideration.
Hoffmann had apparent bias as, strictly speaking, His Lordship has no personal or there was no bias, actual or apparent, Knowles J held that:
economic interest directly from the outcome of the hearing. Nonetheless, Lord Hope affirmed that whether an arbitrator could fairly be criticised of having an apparent Whilst this point was only a fall-back position and the court had, in any event, decided 8.049
held that this falls under the Dimes principle: Was has to be adjudged from the view of a fair-minded and informed observer having "(20J ... An arbitrator is a partner in a law firm. The firm earns substantial the award was properly rendered, JefTord J proceeded to give stem and critical comments
considered the whole set of facts. This is an objective assessment of the factual matrix, remuneration from providing legal services to a client company that has °n the behaviour of the arbitrator:
“Tho fundamental principle is that a man may not be a judge in his own cause not a subjective assessment by the person bringing the complaint.52 Whilst the court the same corporate parent as a company that is a party in the arbitration.
This principle, os developed by the courts, has two very similar but not identical understands that there might be legitimate concern that entitled the other party to feel an The firm does not advise the parent, or the party. There is no suggestion tbe “[84] ... I am astonished that such an e-mail was sent in the first place. Where
implications. First it may be applied literally: if a judge is in fact a party to tbe 'Pparent bias, it would not be justified for the court to accept any inference from this set arbitrator does any of the work for the client company. arbitrators are nominated and/or appointed by the parties, it is inevitable
litigation or has a financial or proprietary interest in its outcome then he is indeed °f fact that there was any apparent bias.55 At the end of the day, an arbitrator should be that there will be some correspondence or discussion between them prior to
[21J Further, the arbitrator, although a partner, operates effectively as a sole
sitting as a judge in his own cause. In that case, the mere fact that he is a party to the frosted that he would decide each and every case independently and only in accordance appointment to which the other party will not be privy That will be necessary
practitioner using the firm for secretarial and administrative assistance for
action or has a financial or proprietary interest in its outcome is sufficient to cause w>th materials available to the parties in that particular arbitration.54 Those materials he to ascertain suitability for appointment, availability and so forth. That
his automatic disqualification. The second application of the principle is where» obtained from the other set of arbitration would not be a relevant consideration.
discussion may extend to the selection of the chairman for similar reasons.
judge is not a party to the suit and does not have a financial interest in its outcome, ” hterprodt Ud v Dt La Rut Initmahonol Lid [2014] 1 Uoyd’i Rep 540. [30], But once the tribunal is appointed, it seems to me wholly inappropriate for
but in some other way his conduct or behaviour may give rise to a suspicion that * A*'G Group Ud v Mormon [2006] I WLR 1163 one arbitrator to communicate with the party that appointed him without
he is not impartial, for example because of his friendship with a party. This second n IJ°U)1 WLA22I0 " [2011] 2 Lloyd's Rep 591. [51}—(63],
, I*II)IWLRSMI.
notice to the other members of the tribunal and the other party.
" [2000] I Uoyd'i Rep 14
type of case is not strictly speaking an application of the principle that a m*°
, H,lo« * Stcrtiary of Stottfor tht Horn* Dtpormtm [2001) 1 WLA2416. [2H3] (Lord Hop*) " At Moot e-Hick LJ then wa«
GuUant UC v Swtu Rt InitmarUmal SE [2016] 1 CLC 767, [9H10] (Uuafl l *• U|pn U theo wit), Bmmtr ** [2017) 1 AUER (Comm) 911. " l*»«] 2 AUER (Coon.) 122.
„ UK lid v Unci Cotuintcfion UK Ud [20II] 1 AUER (Cocun) 10 (Fnicr J) •• See paru 1015-1023 17017] BLR 297
[2000] I AC 11* WEC Capital Pnftctl Ud v Whittfrian City EHaiti Ltd [200J] 1 All ER 723. P0]-{21 ] (Dytoa LJ)

-it*
 158 THE ARBITRAL TRIBUNAL PROCEDURE OF CHALLENGING AN ARBITRATOR 199
156 TIIE ARBITRAL TRIBUNAL PROCEDURE OF CHALLENGING AN ARBITRATOR 157
which decision shall be subject to no appeal; while such a request could have made the decision which the arbitrator made consistently with the
(85] Where there is n three person tribunal, with each party appointing an arbitrator “This was frequently raised not because the amount of misconduct by arbitrators is pending, the arbitral tribunal, including the challenged arbitrator, duties imposed on him. Where a discretion is being exercised, as it is when
and the chairman being selected by the co-arbitrators or an arbitral body, the have increased, but that such application provides the unsuccessful party to the may continue the arbitral proceedings and make an award.” considering an extension of time in relation to disclosure of documents, there
ability of each pnrty to appoint an arbitrator is intended to bring balance to arbitration the last line of defence where no question of law is involved.” may be a range of responses which may reasonably be adopted. An applicant
the tribunal and give the parlies confidence in the balance and fairness of the (2) During the period that a request for the Court to decide on a challenge
has a burden to show that the response was outside the range of responses
tribunal. The party-appointed arbitrators patently do not represent the party Be that as it may, it would never be too cautious for arbitrators to ensure that there is no 8.053 is pending, the Court may reuse to grant leave under section 84 for
which could reasonably have been adopted in fulfilling the duty to deal with
that appointed them and they arc under a duty, as individual arbitrators and as conflict of interest, or perceived conflict of interest, between his office as an arbitrator the enforcement of any award made during that period by the arbitral
the proceedings with fairness and impartiality towards the applicant as well as
a tribunal, to act fairly and impartially. Any communication by one arbitrator ind his personal or professional life. tribunal that includes the challenged arbitrator.
to the other parties.
with one party which concerns the arbitration may give rise to concerns that (3) An arbitrator who is challenged under article 13(2) of the
As an arbitrator, he is expected to be highly attentive and aware of whether any actual 8.054
that arbitrator is not acting fairly or impartially for the simple reason that UNCITRAL Model Law, given effect to by subsection (1), is entitled, The procedure for challenging an arbitrator should be strictly observed. Objections 8.057
or perceived bias might exist. Yet, in H v Z,,** the court warned that in order to uphold
it creates the impression of a close relationship between the arbitrator and if the arbitrator considers it appropriate in the circumstances of the should be made promptly, without non-compliance of any prescribed delays, or the
the principle of party autonomy and the efficacy of the arbitral process, arbitrators and
the party and raises the spectre of other such communications. Requiring challenge, to withdraw from office as an arbitrator. party may be deemed to have waived his right to object.70 The underlying concern of
the courts should he vigilant not to accede to removal of applications merely because
the communication to be kept confidential does not remedy the problem: if this prescription is self-evident. Parties would not be allowed to stand by with folded
an arbitrator would feel more comfortable if he did not have to sit in judgment over a (4) The mandate of a challenged arbitrator terminates under article 13 of
anything, it highlights the arbitrator’s awareness that this is communication he arms and adopt an attitude of “wait and see” before launching any challenge. It would
party who has been critical and avowed a lack of confidence in the impartiality of the the UNCITRAL Model Law, given effect by subsection (1), if
should not be having. Whether in any individual case there is the appearance be unfair to the other party if a party, aware of an objectionable ground, decides to
tribunal, albeit one which no fair-minded observer would feel.47
of bias will, of course, turn on its particular facts but I have no doubt that such (a) the arbitrator withdraws from office; remain silent and only launch such a complaint if the arbitral tribunal does not rule in
communications between one arbitrator and one party should be avoided." his favour.
(b) the parties agree to the challenge;
5. Procedure of Challenging an Arbitrator
(c) the arbitral tribunal upholds the challenge and no request is (b) Duty on the parties to object
(d) Immunity of arbitrators if not dishonest
made for the Court to decide on the challenge; or
(a) Statutory power of the arbitral tribunal and the court UNCITRAL Model Law art.471 sets out the doctrine of waiver of right to object: 8.058
8.050 It might seem that an arbitrator would easily be challenged (or at the very least, subject
(d) the Court upon request to decide on the challenge, upholds the
to criticism by the parties or, on occasion, by the court) for not acting in an independent The procedure of challenging the appointment of an arbitrator (or the entire arbitral 8.055
challenge. 44Article 4. Waiver ofright to object
and impartial manner. The Arbitration Ordinance nonetheless does offer protection to tribunal) is governed by Arbitration Ordinance s.26:
the arbitrators, in pursuance of Arbitration Ordinance s.104: (5) If the Court upholds the challenge, the Court may set aside the award A party who knows that any provision of this Law from which the parties may
26. Article 13 of UNCITRAL Model Law (Challenge procedure) referred to in subsection (2). derogate or any requirement under the arbitration agreement has not been complied
104. Arbitral tribunal or mediator to be liable for certain nets and omissions with and yet proceeds with the arbitration without stating his objection to such
(1) Article 13 of the UNCITRAL Model Law, the text of which is set out
8.056 In T v Vj* the English High Court was invited to remove an arbitrator. Popplewell J set non-compliance without undue delay or, if a time-limit is provided thereof, within
(1) An arbitral tribunal or mediator is liable in law for an act done or below, has effect subject to section 13(4)—
down the following useful guidelines:69 such period of time, shall be deemed to have waived his right to object.”
omitted to be done by
“Article 13. Challenge procedure
(a) the tribunal or mediator; or (1) The court will only remove an arbitrator where the conduct of the arbitrator UNCITRAL Model Law art.4 provides an important safeguard against undue delay in 8.059
(1) The parties are free to agree on a procedure for challenging an
is such as to go so beyond anything that could reasonably be defended as to tbe course of the arbitral proceedings. In summary, for a party to rely on UNCITRAL
(b) the employee or agent of the tribunal or mediator, arbitrator subject to provisions of paragraph (3) of this article.
cause substantial injustice, and only in the very rare case where an arbitrator so Model Law art.4 to argue with the other party who has waived his right to object, the
in relation to the exercise or performance, or the purported (2) Failing such agreement, a party who intends to challenge an arbitrator conducts proceedings that it can fairly be stated that instead of carrying through following elements must be fulfilled:
exercise or performance, of the tribunal’s arbitral functions or the shall, within fifteen days after becoming aware of the constitution of the object of arbitration, he is in effect frustrating that object.
mediator's functions only if it is proved that the act was done of the arbitral tribunal or after becoming aware of any circumstance (1) Non-compliance with a procedural requirement under a non-mandatory
(2) The court will not substitute its own view as to how the arbitral proceeding*
omitted to be. done dishonestly. referred to in article 12(2), send a written statement of the reasons provision of the Arbitration Ordinance or the arbitration agreement;
should be conducted, and if the arbitrator has adopted an appropriate procedure
for the challenge to the arbitral tribunal. Unless the challenged
the court will not, unless that test is satisfied, substitute its own view as to (2) The party deemed to have waived his right to object must have knowledge of
8.051 The burden of proof is essentially very heavy in which the person alleging the arbitrator arbitrator withdraws from his office or the other party agrees to the what decision it would have reached in all the circumstances. The court’s role the non-compliance; and
dishonest has to prove that the arbitrator has acted in bad faith and abused his power.** challenge, the arbitral tribunal shall decide on the challenge. is not to consider what decision it would have made on the material which
(3) That party must have proceeded with the arbitration without stating his
(3) If a challenge under any procedure agreed upon by the parties or was before the arbitrator. Where, as in this case, there is no question of an
(e) Summary objection to such non-compliance without undue delay or without the time
under the procedure of paragraph (2) of this article is not successful, arbitrator having committed any em>r in the way he or she has gone about the
decision-making process; what must be shown is that no reasonable arbitrator limit provided.
8.052 As can be seen, the behaviour of the arbitral tribunal was a frequent ground of challeng* the challenging party may request, within thirty days after having
in the court. Lloyd J*5 has perhaps made the following comment most accurately: received notice of the decision rejecting the challenge, the court
or other authority specified in article 6 to decide on the challenge,
“ So*. tot exempt*. TtmgKlnMuti v Seeretan-for Juttlee [2000) 2 HKLRD 124. SecaltoSmu vAfoort [19751QB 11 * M |20I7)EWHC 565 (Comm)
* Ibid,. 196). relying on Condir Sintchirts vKx'otmtr ContrnKrwn Ud(Que<n*i Bench Dmnoo (TCC), 15 Apnl ' J^CITRAL Model Law «rt.4. entree died ti Ajbi triboo Ordmmc* ill.
Cwmock Chase Dtsfntl Cornell v Kelly (1971) 1 WLR I. Mellon Medts Ltd v SeeniWes and Investments Board I
Oi 137. * R®17J I WLR 2280 (Dytoo J. ti Lord Dyton then wu) Eftfreoched u Arbitrated Ordmtsc* *.11.
- The Aehllei [1914) 2 Lioyd’i Rep 191. Ibid. [63J
jL
 1M THE ARBITRAL TRIBCXAL 6. Witnesses And I charged you judges at that time, saying. Hear the causes between your
9.061
(a) Eliciting evidence from factual witnesses..... 9.061 brethren, andJudge righteously between every man and his brother, and the
S.040 It is therefore paramount that parties raise an objection as soon as practicable afor Chapter 9
(i) Examination-in-chief................................... stranger that is with him. Ye shall not respect persons in judgment, but ye
the occurrence of an irregularity. In Arjowiggins HKK2 Ltd v X Co,™ the Court noted 9.062
shall hear the small as well as the great; ye shall not be afraid of the face of
that the respondent had failed to raise objections as to the jurisdiction of the tribunal (ii) Cross-examination....................................... 9.063
and validity of the arbitration agreement throughout his participation in the arbitration.
THE HEARING the man; for the judgment is God's: and the cause that is too hard for you,
(iii) Re-examinalion.......................................... .. 9 064 bring it unto me, and I will hear it. (Deuteronomy I: 16-17)
The party's attempt to raise these grounds only at the application to set the award a (b) Legal professional privilege.............................. 9.065
thus rejected, as this has deprived the arbitral tribunal of the opportunity to rectify
Paha. (i) Legal advice privilege...................... ~........ 9.069
any such defect. Similarly, in S Co v B Co,n the court held that the applicant, by its
full participation and arguments in the arbitration proceedings, had waived its right to (ii) Litigation privilege................................ — 9.071 1. Lntroduction
1. Introduction.......... ........................................................................................—~~ 9.001
object (c) Expert witness.................................................... 9.074
2. Commencement of Arbitration ______ ____ ____ ___— .............. ..................9.005
Broadly speaking, the oral bearing of the arbitral parties is a process that allows parties 94)01
*4*1 In Esstr Oilfields Services Ltd v Haricot Rig Management Pvt Ltd,1* the English (a) Statutory limitation of time... ................... ................... .................. -................9.007 to be beard by the arbitral tribunal before they decide on the dispute. The oral bearing
authority reaffirmed that should a party wish to object, he would be under a duty to
(b) Contractual limitation of time........................................................ .......... ........ 9.008 also allows the arbitral tribunal to hear live evidence and determine where the truth
make this point clear before die arbitral tribunal at that time. By continuing to take pal
(c) Extension of contractual limitation of time................................................ — 9.011 lies. It also offers an opportunity for the parties to cross-examine factual and expert
in the proceeding, he would have waived his rights to object.
(d) Service of the notice of arbitration as the commencement witnesses and test their credibility.
UM2 In Gao Hazy an v Keeneyt Holdings Ltd,n the applicants applied for leave to enforce of arbitral proceeding................................................................ .—..............— 9.018 Having said so, there might be situations where an oral hearing would simply not be required. 9.002
a mainland award. The respondent seeks to resist the enforcement on the ground thtf
(e) Consolidation of disputes —...—...... 9.023 The Arbitration Ordinance (Cap.609) allows the arbitral tribunal to order a paper bearing
the award has been obtained against public policy, which was eventually allowed by
md dispense with the need of a full oral hearing, if both parties agree. It is nonetheless a
the judge. The applicants appealed. In allowing the appeal, Tang V-P™ (with whom 3. Preliminary Meeting 9.028
must for the arbitral tribunal to sit in an oral bearing if any party had requested for one.'
Fok JA~ and Sakhrani J agreed) condemned the parties for adopting a “wait and see" (a) Preliminary issues........................ 9.029
attitude when considering whether to pursue a complaint of bias. The fact that a party Unlike in litigation where a default judgment could be entered against a party, a party 9.003
(b) List of issues (Scott Schedule)...................... ........ ................................... ....... 9.031
recognises a point but decides to keep the point up his sleeve would mean that the would not be entitled to obtain a “default award” from the arbitral tribunal if the other
(c) Trial bundling................................................ 9*032
arbitral tribunal would not even have an opportunity to cure the irregularity.™ side does not appear in an arbitration.3
(d) Documents assisting the arbitral tribunal.......... -...........................................9.035
Good preparation is a prerequisite for a fluent and expeditious oral hearing. This 9.004
(i) Chronology and dramatis personae...........................................................9.035
chapter considers the procedure and preparation works leading up to the oral hearing of
6. Termination op the Mandate of Arbitrator (ii) Opening submissions.................................................................................... 9.036 •he case. The chapter then further considers, should there be an oral hearing, the issues,
(iii) List of agreed facts or admissions..............................................................9.037 both procedural and substantive, that will arise in the course of the oral hearing.
*4*3 The authority of an arbitrator is personal and the mandate of the arbitrator would (e) Printed case and pleadings......... ................. 9.038
terminate upon his death.™ If an arbitrator as a matter of law (de jure) or as a matter
of (act (de facto) would no longer be able to perform his functions, the arbitrator may * Administrative Preparation................. 9.042
2. Commencement of Arbitration
tender his resignation and cease to perform his duty if both parties agree. Should any (®) Tribunal secretary....... 9.042
party disagree, (his would be determined by die court or other arbitration institution, as (b) Translation/interpretation......................... 9.045 Commencement of arbitration is subject to two limitations of time. First, a party must 9.005
the case may be “ Where there is a vacancy on the arbitral tribunal, the parties would c°mmence arbitration within the limitation of time allowed by the statute. The length
(c) Transcript_________________ ________ ..____________..______ ________ 9.047
be eligible to appoint a substitute arbitrator in accordance with the rules applicable to °f the statutoiy limitation of time depends on the nature of the dispute. Second, a party
that arbitration.11 5. Discovery............................................„......................................................................9.048
•mot commence arbitration within the contractual limitation of time in their dispute
(•) General principles 9.048 Elution clause or underlying contract The length of the contractual limitation of time
0>) Relevance...................................................................... ................................ ...... 9.050 Spends on the nature of the dispute and is set by the parties themselves.
(c) Arbitral tribunal’s power to order discovery...................................................9.056
both circumstances, once arbitration is commenced, the clock counting the 9.006
(d) EBA Rules on Taking of Evidence in International Arbitration.......-...........9.058 Station of time stops to run.’ It does not matter which party actually commenced the
•hitration. So long as the arbitral proceeding is commenced by any party, the clock would
oteer svjon peisi note uny ^ running. In Glencore International AG v PT Tera Logistic Indonesia * the court held
pauisMCCCi
ptfT)B«LXn7
, ^NCTntAL Mod«l Lew wt.24(1), entrenched m Arbitration Ordinance a.52.
Aj T«« ft Sm •*# , UNCTTRAL Model Law vt 25. entrenched *i Arbitra&oo Ordinance i 53
A*r+ r w- —« W Hotzh & Co Art* Ptrrolita he (Th World Em) [1992] l Uoyd'e Rep 45. Thad Shppn* Co * (Wq
CmvprrhutE^rm^gCeLMKimM KKCRAR III. l)l(S*Aadmy Nfh , <* Bmktrcz, !•* (Th bhmdArvhm) |IWJ] 2 Lloyd'« Rep 311
P°I61 Bos LR 401 (Kaomtet I).
IMTTTWAL U» m 14. mmcM m AthUutm OtSaw* 177.
(JNCmuiMiMLfwai 15. —rmOwA u MVmotum Ottmmte >21
 166 THE HEARING
COMMENCEMENT OF ARBITRATION 147
144 THE HEARING COMMENCEMENT OF ARBITRATION 165
(3) An application may be made only after a claim has arisen and after would be just to extend time notwithstanding the contrary decision of the chosen
that where a plaintiff's claim and a defendant’s counterclaim arose from a single set of 11.3 The arbitration shall be referred to a tribunal of three (3) arbitrators, exhausting any available arbitral procedures for obtaining an extension arbitration tribunal. Often, as in this case, this will involve a challenge to the way
facts giving rise to a balance ofaccounts or netting off, the filing of a notice of appointment each Party shall appoint one arbitrator and the third shall be appointed of time. in which the discretion has been exercised.”15
of arbitrator would suffice to intemipt the running of time in respect of the counterclaim. by the ICC. Any award of a majority of the arbitrators shall be final and
• (4) An arbitral tribunal may make an order under this section extending the
binding upon the parties thereto, and may be entered for enforcement In summary, the relevant questions could be summarised as this: 9.014
lime or period referred to in subsection (1) only if it is satisfied—
(a) Statutory limitation of time in any court having jurisdiction.”
(a) that— (1) whether there were circumstances beyond the reasonable contemplation of the
9.007 The Limitation Ordinance (Cap.347) stipulates the ordinary limitation periods for
Unlike most commonly seen dispute resolution clauses, this dispute resolution clause 9.009 parties when they agreed the provision; and
bringing actions of the various classes. Generally, the limitation period for actions of (i) the circumstances were such as to be outside the reasonable
gives precise stipulation of how long the parties should attempt to settle the dispute by
contract and tort is six years from the date on which the cause of action accrued.5 The contemplation of the parties when they entered into the (2) if so, whether, if the parties had contemplated them, they would also have
way of mediation before the commencement of arbitration. Distinguishing from a long
limitation period for a person to recover a land would be 12 years from the date on arbitration agreement; and contemplated that the time bar might not apply in such circumstances.14
line of well-established and authoritative precedents,* Teare J concluded that this dispute
which the right of action accrued to him.4 The arbitral tribunal does not possess the
resolution clause set mediation as a condition precedent before the commencement of (ii) it would be just to extend the time or period; or
jurisdiction to grant an extension of time for the statutory limitation. The only remedy When considering whether to grant extension of time due to the fault of a party, the 9.015
arbitration.
available to the party would be to seek an extension or exclusion of the limitation (b) that the conduct of any party makes it unjust to hold the other party court would consider the length of the delay and whether such delay was due to the
period pursuant to Limitation Ordinance Part HI. The court has proven to construe the contractual limitation of time in a very strict 9.010 to the strict terms of the agreement. fault of the claimant. The court would also consider whether either party will suffer any
manner. There might even be a situation where the contractual limitation of time could prejudice in addition to the loss of the claim or the time bar defence.'7
(5) An arbitral tribunal may extend the time or period referred to in
(b) Contractual limitation of time not effectively be complied with because the other party would not have knowledge
subsection (1), or the time or period extended under subsection (4), for In Expofrut SA v Melville Services Inc," Burton J summarised the principles that the 9.016
of the breach or it would be too late for a party to commence arbitration; the fact
9.008 Parties are free to construct a dispute resolution mechanism in their dispute resolution a further period and on the terms that it thinks fit, and the tribunal may court would adopt when considering whether to grant an extension of time under
remains that the cause of action would still be time barred.10 In the recent case P v Q,"
clause or underlying contractual agreement. In some cases, there would be tiers of do so even though that time or period or the extended time or period has Arbitration Act 1996 s.12, the English counterpart of Arbitration Ordinance s.58:
the plaintiff applied for an extension of time on the contractual limitation of time. In expired.
dispute resolution procedures for the parties to comply with. For illustration, the dispute
construing the dispute resolution clause, Sir Richard Field noticed from precedents'2
resolution might require amicable negotiations, determination by a third party and/or (1) Section 12 is intended to restrict the circumstances in which an extension
that the court always gives a literal construction on the contractual limitation of time. (6) This section does not affect the operation of section 14 or any other
mediation to take place prior to the commencement of arbitration. Whilst whether these of time could be granted. It is not open to the court to extend time generally
enactment that limits the period for commencing arbitral proceedings.
pre-arbitration dispute resolution mechanisms constitute a condition precedent to the because the court concludes in general terms that it would be just to do so.'*
(c) Extension of contractual limitation of time (7) The power conferred on an arbitral tribunal by this section is exercisable
commencement of arbitration is a matter of construction of the arbitration clause, this
by the Court if at the relevant time there is not in existence an arbitral (2) Mere silence by a party is not a sufficient ground for extension. Failure to alert
would not affect the fact that a claim would be time barred and, hence extinguished, if Arbitration Ordinance s.58 provides both the arbitral tribunal and the court a power to 9.011
tribunal that is capable of exercising that power. another party to the need to comply with the time-bar requirement also could
arbitration was not commenced within the contractual limitation of time.7 In particular, extend the contractual limitation of time for commencing arbitral proceedings:
not render the barring of a claim unjust.20
in the recent authority of Emirates TYading Agency LLC v Prime Mineral Exports Pit (8) An order of the Court made in exercise of its power conferred by
Ltd,* the English High Court examined the following dispute resolution clause: 58. Power to extend time for arbitral proceedings subsection (7) is not subject to appeal. (3) The court looks at whether the other party did something causative to the
out-of-time commencement of the arbitration. This is not to say that the court
(1) This section applies to an arbitration agreement that provides for a
“11. Dispute Resolution and Arbitration 9.012 In SOS Corp Alimentaria SA v Inerco Trade SA,n the English High Court held that the would be finding wrongful or blameworthy act done by the other party, rather,
claim to be barred or for a claimant’s right to be extinguished unless the
contractual limitation of time enables each commercial entity concerns to draw a line it is looking at the reason leading to the out-of-time commencement.21
11.1 In case of any dispute or claim arising out of or in connection with or claimant, before the time or within the period specified in the agreement,
under this LTC including on account of a breaches/defaults mentioned in takes a step— beneath transactions at a much earlier stage than the statutory limitation provisions (4) Whether there is any delay in the parties seeking an extension of time from the
9.2,9.3, Clauses 10.1(d) and/or 10.1(e) above, the Parties shall first seek would allow. Commenting on the English equivalent of Arbitration Ordinance s.58, court or the arbitral tribunal.22
(a) To commence arbitral proceedings; or the court explained that the intention was to reflect the underlying philosophy of party
to resolve the dispute or claim by friendly discussion. Any party m«y
notify the other Party of its desire to enter into consultation to resolve a (b) To commence any other dispute resolution procedure that must be autonomy. Any power given to the court to override the bargain made between the
dispute or claim. If no solution can be arrived at in between the Parties exhausted before arbitral proceedings may be commenced. parties must be fuUy justified.
for a continuous period of 4 (four) weeks then the non-defaulting party 9.013 As to what is meant by circumstances “outside reasonable contemplation of the parties",
(2) On the application of any party to such an arbitration agreement, an
can invoke the arbitration clause and refer the disputes to arbitration. Hamblen J14 considered that the court ought to place very considerable weight on the
arbitral tribunal may make an order extending the time or period referred
11.2 AH disputes arising out of or in connection with this LTC shall be finally to in subsection (1). conclusion of the chosen trade tribunal in deciding whether it is just to extend time A<|73}-{76)
resolved by arbitration in accordance with the Rules of Arbitration of this is a matter of discretion that focuses on fairness: „ *M*1
„ **.mi
the International Chamber of Commerce (ICC). The place of arbitration „ 2 CLC 211. [3]
shall be in London (UK). The arbitration shall be conducted in the ”... in order to persuade the Court to extend time in general it will be necessary Cethishtp SA v A/lanasons Ltd (Tht Catherine Helm) [1991] 2 Uoyd’i Rep 511, 520(Oeo»e> Bmo QCl TUmmMc*
*d/ordv Miles (1992) 2 AC 121 Applied u> Cobh A Wireless Pic v IBM UnitedKingdom Ltd [2002] 2 All ER (Comm) m cd>pto Shipping Corp SA [2000] 2 Uoyd’i Rep 243. [24] (Dt%id Steel I).
English language. •041 (Colmea J), Holltneay w Chantry Mtad Ltd [2001] 1 AD ER (Comm) 653 (Remtey J), Dhananl v Cramlauh to show that this is not an ‘ordinary case’ and that there is good reason why '*
Catherine Helen (1991) 2 Uoyd’i Rep 511.522 (Geoffrey Bnce QC). Hat+om A General Worts Led* tWitti ime
m HOI!] 2 AUER (Comm) 799. Shcdter v Httftf Grv*p Holding SA [2012] 2 AD ER (Comm) 1010 ■4r»»n- [2001) Uoyd'i Rep 65. 73 (Colmaa )). Ltmnc Sngar Ltd v Baffm Investments ltd (The Lake Mlchqmd [201#]
Ofi Dauk-Frtwnk* Dampsktbisel v Compagnte Flnamrr* d'brvesnsstments Trieisatlannques SA (Tht , J Uoyd'i Rep 141. [46|<Oro*i 1*
Himmtdatd) [1965] 2 Lloyd’* Rep 353. Minister of Materials v Sttel Brothers A Co Ltd [1952] 1 AD ER 522, XvY “ [2010] 2 Uoyd'i Rep 345.
, Michtgn (2010) 2 Uoyd’i Rep 141. [46)-[52] (Oroei J>
• tM.»m , R011] lUoyd’i Rep 694 M Ibid (Ait Hamblen U then wis) SOS Corp Ahmentarta SAvtneno Trad* SA [2010] 2 Uoyd’i Rep 345
’ Whetetmp Uarienng Ltd r Welds Produce Ltd [2013] EWHC 2079 (Ck), Maolimei Foreign Trad* Corp v „ Wl I] EWHC 1399 (Comm)
Mmvme CeUd [190] I Uoyd’i Rep 371. Evergos Nefiita Eitna t> Cargill Pie (The IW/«r/(1997) 1 Uoyd'i *0>,! Himmerland [1965] 2 Lloyd'* Rep 353, Spatia Naxeganon Co v Transocean America Inc (The Stephanos) [19I9J1
' [30IS11 Wit 1145 (Twee/) rioyd’i Rep 506
 170 TIIF. HEARING
PRELIMINARY MEETING 171
I Ml THE HEARING COMMENCEMENT OF ARBITRATION 169
9.024 Situation (3) indicates that the Court retains a certain extent of discretion. Some
guidelines are provided in Linfield Ltd v Taoho Design Architects Ltd* where the court
3. Preliminary Meeting
9.017 In P v Q*' ihe court reaffirmed SOS Corp Alimentaria SA v Inerco Trade SAU that the technology era, since the relevant section in the Arbitration Ordinance only refers
the approach should stnrt from the assumption that when the parties agreed with i to written communications in general. engaged in a three-step analysis:
To ensure that the oral hearing could be conducted smoothly, parties usually opt to 9.02S
contractual limitation of time, they must he taken to have contemplated that if there
In G1encore Agriculture RV v Conqueror Holdings Ltd,” the claimant in arbitration 9.021 have a preliminary meeting44 amongst the parties, their legal representatives and the
were any omission to comply with its provisions in not unusual circumstances arising (1) Arc there two or more arbitral proceedings in existence?
served a notice of arbitration to the intended respondent, which is a company, to a arbitral tribunal. The HKIAC Domestic Arbitration Rules47 provides a “Checklist for
in the ordinary course of business, the claim would be time barred unless the conduct Preliminary and Procedural Meetings”.
personal email address of nn employee of the company. The respondent did not attend (2) If so, in relation to those arbitral proceedings, do any one or more of the factor*
of the other party made it un just that it should be. Sir Richard Field further added that:
the arbitral proceeding eventually, nnd nn award was made against the respondent. specified in s.6B(lXa)-6B(lXc) of Uie Arbitration Ordinance (Cap.341)
(1) Communication (Article 4)
In setting nsidc the award, the English High Court recognised that unlike a person, apply (which are substantively similar to s.2(lXa)-2(lXc) of the Arbitration
"In my opinion, at the very least, it will only be just to extend time under section Ordinance (Cap.609))?
■ company is a persona ficta in the eyes of the law. This question depended on the (a) All communications to the arbitrator always to be copied to the other side
12 on the application of a party in a charter chain if the applicant has acted
ipplication of agency principles. Since the employee did not have actual authority, or and also endorsed.
expeditiously and in a commercially appropriate fashion to commence proceedings (3) If the answers to the above questions arc “yes”, are there any other relevant
implied authority nnd ostensible authority, n service merely to a personal address to an
once he (it) has become aware that n claim is being mnde against the applicant considerations or factors that go to the court’s discretion on whether or not to (b) Means of communication/mode of service.
employee of the respondent would not suffice. The Court also referred to” a general
under the chartcrparty above or below in the chain. 1 sny this bearing in mind that make the order sought?
principle that service by email is capable of being an “effective means" within the (c) Is an arbitration administrator to be appointed? (Article 4.5)
the parties will have agreed to the time bnr in question nnd any extension trill
meaning of the English counterpart of Arbitration Ordinance s.10(2).*4 9.025
therefore be to the detriment of the party against whom the applicant wishes to The court often takes into consideration relevant factors, namely, the risk of inconsistent (2) The Parties and Their Representatives
take proceedings.’*” In Zavod Ekran OAO v Magneca Mctrcl UK Ltdthe respondent complained that the 9.022 decisions,*9 extent of similarity in issues or relief sought and cost implication,40 stage at
(a) Confirmation of names of parties.
applicant has not given proper notice to the arbitration nnd intended to set aside the which the arbitrations are at,41 inconvenience and the complexity of the matter.42 Most
arbitral award on this ground. In dismissing the respondent’s application, the court commonly, consolidation is ordered in construction disputes, where there are arbitration (b) Any changes since contact?
(d) Service of the notice of arbitration as the commencement
icccpts thnt there hns been little authority as to what could be meant by “proper notice”. agreements between the developer and its main contractor; and those between the main
of arbitral proceeding (c) Names of representatives and addresses for communications — including
Rather, tho court is prepnred to constnie “proper notice” in context. The court held that contractor and its subcontractors. Consolidation thus allows a systematic resolution of
9.018 The ‘‘Notice of Arbitration"* is the document deemed to commence the arbitration. In the disputes in question. representation at any hearing. (Counsel?) (Article 7)
the proper test would be whether the party seeking to set aside the award or contesting
Liryfield Ltd v Brooke Hillier Parker,” Mn J* held that common sense dictated that the enforcement hns been given nn opportunity to present his ease and whether there were 9.026 (3) The Arbitration Agreement
Besides ordering a consolidation, the court may make other orders, namely, to hear
notice of arbitration gives particulars of the dispute between the parties in order that any procedural unfairness in the course of the commencement of the arbitration.” the cases concurrently or sequentially. The court may also stay an arbitral proceeding (a) Confirmation of a written arbitration agreement. (View original
the recipient knew what matter was being submitted to arbitration. The claimant is only
pending determination of another arbitration.4* Where proceedings have been ordered agreement.)
required to set out brief particulars of the general nature of the dispute and the claim, (e) Consolidation of disputes to be consolidated, the court may also make further consequential directions as to the
the amount involved nnd the relief sought.” (4) Jurisdiction (Article 11)
Many eases might involve highly similar factual and/or legal issues. An obvious 9.023 payment of costs in those arbitral proceedings.44
9.019 it would be up to the party who intended to commence an arbitration (ie, the claimant) txomple would bo in construction disputes where a contractor and subcontractor have (a) Confirmation of arbitrator’s appointment and terms.
9.027 It should be noted that it would not be open for a party simply putting different disputes
to make sendee of the notice of arbitration to the intended respondent nnd, where entered into various agreements regarding different aspects of the construction project. under different dispute resolution clauses into a single notice of arbitration without (b) Is there any challenge to jurisdiction?
appropriate, to the arbitration institution. Any written communication is deemed to If a delay occurred, a dispute would arise in all but not just one contract. With a view
having the consent of the other party, permission of the arbitral tribunal or order of
have been received if it is delivered to the addressee personally or if it is delivered at his to minimise inconsistent decisions nnd to save time and costs, the court may, upon (c) Extent of arbitrator’s jurisdiction.
the court In A v fl,41 the court held that an award would be void on the basis that
place of business, habitual residence or mailing address. If none of these can be found application by n party, order two or more arbitral proceedings to be consolidated under
two different causes of action arising from two different dispute resolution clauses (5) Applicable Law
after making a reasonable inquiry, a written communication is deemed to have been toy of the following circumstances:*7
were pleaded in a single notice of arbitration. The court recognised that in LCIA Rules
received if it is sent to the addressee's last-known place of business, habitual residence (a) Article 14 designates the place of arbitration as Hong Kong. The Arbitration
art.l, there should be a separate request of arbitration for each and every arbitration
or mailing address by registered letter or any other means which provides a record of (1) where a common question of law or fact arises in both or all of them;
commenced. An attempt to refer to separate disputes under two contracts into a single Ordinance will generally be applicable to the arbitration procedure.
the attempt to deliver it.*0
(2) where the rights to relief claimed in those arbitral proceedings are in respect of arbitration would therefore be invalid. (b) Law applicable to the substance of the dispute.
9.020 Insofar as the delivery and receipt of electronic communications are concerned, the or arise out of the same transaction or series of transactions; or
communication is deemed to have been received on the day it is sent.” Whether • (6) Language (Article 15)
(3) where there is any other reason making it desirable to make an order.
notice of arbitration would be validly served by way of email is an interesting issue in
(a) Confirmation of language of the proceedings to be English.
(b) Will evidence be presented in any other language?
" (HCCT 61/2001. (2002) HKEC 2011).
** poii]rwt»ciw«(C«M»i * Bui lr :o«o I M"g K,t Sh,>’P'»g Sonic* Co Lid v Autogoln Ud{HCMP 1017/1992. (1992) HKLY 65). (7) The Dispute
M (2010) J tlcrdi Rep 343 Ibid
AtUtrauoo Act 1996 *76(3) ititci that "A nonce or other document may be terved on > person by any effective menu*1', " Shut On Construction Co Lid v Moon 71* Co (1917) HKLR 1224.
(a) Preliminary description of dispute. (Amount claimed/counterclaimed.)
u Arbitration Ordinance 110(2), nonetheless, only reftntd to "my meant". I Th"m'*°'hra> Co'V v Hopowll Comirucnon Co Ltd (HCA 434 VI 9*6. (1916) HKEC 1611.
" I.'OMJIHKCO.M * 1^*1T) 2 Lloyd** Rep 566. ° Arbitration Ordinance Sch_2 t 2(1) >
* AikCMtMMOawi Merlin, Arbitration Law, pin 19 53; KussoH on Arbitration (24th ed) pan 1-040. Mammals Gorman GmbH v M Ibid. Sch. 2 t 2(2).
* L/rdtHCCT .34,2016, (2017) HKEC 461). J^wSieW Lid 11999) 1 All ER (Comm) 313. 327. Inani v hvad (2000) 1 Lloyd*. Rep 412,426, Kaiona v Gnlmicss “ (201*) But LR 771 • “«««« u sometime* alto celled the "Ca*e Management Meeting" or a “Pre-Trial Conference"
* UNC7T11AI Mo«M lew mi 1. mmkM m AiHuuim Odious.'* 110 App«ad«x 1.
» P006) 2 All ER (Comm) 413, UTWktmo) BitbaJ (Mala\*1t0 v Cbm (2004) NSWSC120
" Atk**IW* * |0<3) *»l 10(3) AtUtration Ordurance Sch 2 iT.
172 THE HEARING PRELIMINARY MEETING 173 17* THE HEARING PRELIMINARY MEETING 175

(8) Preliminary Points and Separation of Liability and Quantum (14) Rules of Evidence (vi) Are expert reports to stand as evidence in chief? (v) How arc experts to be examined?
(a) Is it desirable to determine any points preliminary to any main hearings of (a) Are any special rules of evidence to apply such as the IDA Rules on the (vii) Use by arbitrator of own expertise? (vi) Will all witnesses be present or is telephone or video conferencing
the arbitration? (May encourage early resolution of dispute.] Taking of Evidence in International Commercial Arbitration (2010)? (18) Bundles required?
(b) Is it appropriate to decide issues of quantum with, or separate from, tbe (15) Documentary Evidence (a) The form of bundles of documents to be prepared for a hearing and when (vii) Evidence to be taken on oath or affirmation?
issues of liability? they arc to be provided.
(a) To consider in what form and when documentary evidence is to be (viii) If an oath is to be taken, is the Party calling that witness to provide
(c) Is it appropriate to divide the disputes at the arbitration hearing into submitted. Article 6 requires Written Statements to be accompanied by (i) Should there be one agreed bundle only, in chronological order the necessary books, etc?
different trenches to make the hearing more manageable? copies of all essential documents on which the party concerned relies and starting from the front, paginated and indexed or is some other fonn (ix) If translation is required, who is to arrange translation and what are
which have not previously been submitted by any party. What is to be preferable?
(9) Miscellaneous Preliminary Considerations the requirements for approval of translators?
included as essential documents?
(a) Is a hearing required or can the arbitration be conducted on documents (ii) Is a core bundle necessary? (x) Is a transcript required and, if so, what form is it to take (real time/
(b) Article 6 allows for lists of essential documents to be provided in lieu of shorthand/tape recording)?
only? (iii) Are drawings, documents, figures, photographs, etc, to be agreed as
the documents themselves but only if the parties agree or with leave of the
arbitrator. Is leave requested? far as possible? (23) Closing Submissions
(b) Is an expedited procedure appropriate?
(iv) Are photographs to be numbered on their faces? (a) Are closing submissions to be written or oral and what is to be covered?
(c) Is an agreed chronology of events to be prepared? (c) To consider w hether an order for the production of additional documents
is requested and, if so the procedure to apply. (19) Site Inspection (i) if written, are they to be exchanged sequentially or simultaneously
(d) Is a list of facts and issues which are not in dispute to be prepared?
(d) To consider what rules are to apply to the admission of documentary (a) Is a site inspection required and if so when it is to take place (before/ and
(e) Is a list of issues in dispute to be agreed? [As in ICC Terms of Reference]
evidence. during/aftcr hearing)? (ii) when?
(0 Are recoverable costs to be capped?
(16) Witnesses of Fact (20) Additional Preliminary Meetings or Pre-Hearing Review (24) Costs (Article 19)
(10) Experts and Assessors (Article 10)
(a) To consider whether there are to be any witnesses of fact and if so the (a) Should any further preliminary meetings be scheduled? (a) Are final submissions on costs to be made at the end of hearing or in
(a) Are any arbitrator-appointed experts or assessors required? procedure and timetable to be followed. For example, are: documentary submissions? If in documentary submissions, when?
(b) Is telephone/vidco conferencing appropriate?
(11) Arbitration Rules and Arbitrator’s Authority (i) written witness statements to be exchanged; (b) Is the arbitrator to determine the amount of recoverable costs? (See
(c) Is a pre-hearing review desirable?
(a) Have the parties made any amendment to the Rules? (See the second (ii) witnesses to exchange written replies; and Arbitration Ordinance ss.74 and 75.)
(21) Opening Submissions
sentence of the first paragraph in the Preamble to the Rules.) (25) Award (Article 17)
(iii) witness statements (and replies if any) to stand as evidence-in-chief. (a) Are opening submissions to be written or oral and what is to be covered?
(b) Have the parties made any agreements to limit or define the arbitrator’s (a) What form is the award to take? A reasoned award including the arbitrator's
(b) Is the total number of witnesses to be limited to save cost? (i) if written, are they to be exchanged sequentially or simultaneously,
authority and powers? reasoning with regard to findings of fact normally is given unless it is
(c) If the arbitration is “documents only”, are written witness statements to be and
(12) Written Statements (Article 6) agreed by both parties that this is not required.
in the form of affidavits? (ii) when?
(a) Is the timetable for the parties to submit their Written Statements stated in (26) Any Other Business
(17) Expert Evidence (22) Hearing (Article 8)
Article 6 to be modified? (a) Are there any other matters which may contribute to be an economical and
(a) To consider whether leave is sought to adduce expert evidence and if so (a) When is the hearing to take place? Is this date firm or provisional? expeditious resolution of the dispute?
(b) b a Scon schedule (a spreadsheet usually describing multiple claims and
the procedure to be followed.
the respondent’s response to them) appropriate? (b) Where is the hearing to be held? Are arrangements to be made by claim*®*
(b) Considerations to include: (a) Preliminary issues
(c) Procedure for service or exchange of Written Statements (papers, fax in consultation with respondent?
Preliminary issues concern a wide range of matters in which both the parties and tbe 9.029
electronic means)? (i) Party-appointed experts or experts appointed by the arbitrator. (c) How long is the hearing to be held?
^biiral tribunal would be eager to get them sorted out prior to the hearing proper These
(13) Legal Submissions (ii) Number and discipline of experts. (d) What form is the hearing to take? °*hers are essential as the failure to fix these matters will lead to inevitable hiccups or
(a) Article 6 requires Written Statements to include summaries of *®y even major obstacles in the hearing proper. These matters typically include the following.
(iii) Terms of appointment of experts; issues to be dealt with and the (i) Inquisitorial or adversarial?
contentions of law necessary for a proper understanding of the Written methodology to be used.
(ii) Sitting hours? (1) Challenge of jurisdictions;
Statement in which they are included. Are fuller legal submissions
(iv) Are experts to meet to narrow issues and agree facts/figures and if
in writing to accompany the Written Statements and to include la^ (iii) Allocation of time. Chess clock? (2) Discovery; and
so is their meeting “without prejudice”?
reports and authorities or are they to be part of opening or closing
1 (iv) Order and number of witnesses. (3) Directions for experts witnesses/reports.
submissions? (v) Timetable. Sequential or simultaneous exchange?
 178 THE HEARING
ADMINISTRATIVE PREPARATION 179
176 T1IE HEARING PRELIMINARY MEETING 177
arbitration. Bokhary JA” gave a summary of the functions of properly particularised and effort are not expended unnecessarily on other issues — Wing Hang Bank
9.030 Typically, to assist the parties in keeping on track, the arbitral tribunal would stipulate dose and fit properly so that the pages can be turned over easily. The spine of those pleadings in Aktieselskabef Dansk Skibsfinansiering v Wheelock Marden & Co Ltd * Ltd v Jet International Ltd.a It is the pleadings that will define the issues in a trial
a procedural timetable for the parlies to follow after consulting the parties during the bundles should be prominently labelled.55
and dictate the course of proceedings both before and at trial. Where witnesses are
preliminary meeting. Thereafter, that procedural timetable would be reduced into an (1) To inform the other side of the nature of the case that they have to meet as involved, it will be the pleaded issues that define the scope of the evidence, and not
order. A typical order would cover all procedural aspects of the arbitration.41 (d) Documents assisting the arbitral tribunal distinguished from the mode in which that case is to be proved; the other way round. In other words, it will not be acceptable for unpleaded issues
(2) To prevent the other side from being taken by surprise at the trial; to be raised out of the evidence which is to be or has been adduced. As the Court of
(b) List of issues (Scott Schedule) (I) Chronology and dramatis personae
Appeal remarked in Wing Hang Bank Ltd v Crystal Jet International Ltd:*3
9.031 The issue of the arbitral proceeding might be apparent if most of the factual and legal A chronology56 of events and dramatis personae” would be of great assistance to the 9.035 (3) To enable the other side to know with what evidence they ought to be prepared
arbitral tribunal as they help provide the arbitral tribunal an overview of the case and and to prepare for trial; ’(2) In a trial, particularly where evidence is given by witnesses, it becomes
issues were agreed by the parties. The issue of the arbitral proceeding might also be
serve as a useful index for the documents. On occasions, the arbitral tribunal would extremely important that each side knows exactly what are the live issues.
apparent if the exhibits and witnesses involved are limited in number. Nonetheless, (4) To limit the generality of the pleadings, the claim and the evidence;
order the chronology and dramatis personae to be prepared jointly by the parties. This Where issues are sought to be introduced that have not been adequately or
this would not be the case if there ore multiple issues to be determined before the
will help crystallizing the true issues or events in dispute in the arbitration. (5) To limit and define the issues to be tried, and as to which discovery is required; properly pleaded, amendments must be sought unless the consent of the other
tribunal. The arbitral trihunnl would be greatly assisted if the parties are able to come to
and party or parties has been obtained. It will simply not do or unpleaded issues to
a compromise of what issues the arbitral tribunal would have to rule on. Typically, the
(II) Opening submissions be ‘slipped in’ when evidence is being given in the hope that the other side is
list of issues would also include the stance of the respective parties.4* (6) To tic the hands of the party so that he cannot without leave go into any matters not sufficiently alert to object’
Different arbitrators and arbitral tribunals would definitely have different preferences. 9.036
not included (although if the opponent omits to ask for particulars, evidence
(c) Trial bundling Some arbitrators prefer a full written opening submission in substitution of any ... The purpose of pleadings, in clearly and unambiguously setting out the true
may be given which supports any material allegation in the pleadings).
oral opening. Others might prefer a written skeleton for the opening submission extent and nature of a dispute not just for the benefit of the parties but also for the
9.032 Trial bundling is a process which might at first sight seem uncontrovcrsial but turns out lupplcmcntcd by an oral opening by the counsel highlighting relevant points. Court in managing and trying cases, remains important of civil justice.”
to be a highly contentious and costly matter. The Hong Kong International Arbitration 9.040 The Court of Final Appeal has on repeated occasions reminded of the importance and
Centre did not stipulate any guidance notes or mandatory form which the arbitral purpose of pleadings. In Sinoeam International Ltd v Hyundai-CCECC Joint Venture*
(Ill) List of agreed facts or admissions
tribunal is obliged to adopt. After all, different arbitral tribunals would have different the Court of Final Appeal said: 4. Administrative Preparation
Agreed facts (or admissions by parlies) between the parties have two implications: 9.037
preferences and practices in conducting an arbitral proceeding. Practice Direction 5.6"
first, it hints the arbitral tribunal that a particular matter is not in dispute and therefore “A party must raise all the issues he wishes to raise to be dealt with at the trial. (a) Tribunal secretary
issued by the judiciary concerning how documents should be organised nonetheless,
it would not be required to make a ruling; second, it provides anchors for the arbitral Parties arc not entitled to have issues recently thought up dealt with separately
serves as a useful default template for the arbitral tribunal’s consideration. The arbitral tribunal or the parties may opt to appoint a secretary to assist with the 9.042
tribunal to set the scene for the whole dispute. In order to help distilling the issues in the and piecemeal. The other party is entitled to know from a clear pleading what is
9.033 Usually, the tribunal would order parlies to use their best endeavour to agree and prepare arbitral proceedings and help focusing the hearing, the arbitral tribunal may invite the the entire case he has to meet so that he can decide whether particulars should be •dministrative works of the arbitration. On occasions, the tribunal secretary may
bundles of documents.’1 This is essential as it helps reducing documents that have to be parlies to compile a list of agreed issues. The arbitral tribunal would then be entitled to »lso assist in researching points of law for the arbitral tribunal or even drafting the
sought; how he should plead in response; what discovery he is entitled to; wbat
placed before the tribunal, hence reducing the time required for the tribunal to peruse treat the matter listed in the agreed facts to be conclusively proven, and evidence would evidence he should adduce to meet it; and what points of law should be taken ... procedures and part of the award. Technically, there are no discrete boundaries as to the
the documents, and, in a step further, helps saving costs for the parlies. Where possible, not be required to prove the proprietary of the same. duty of a tribunal secretary. That said, the final power of decision-making remains m
the parties should prepare a core bundle for the arbitral tribunal’s easy reference.51 The Where a late attempt is made to introduce a new case, it is doubly important the hands of the arbitral tribunal.
parlies should then include ull the materials in a bundle of documents in loose-leaf (e) Printed case and pleadings that the other side should have a clear pleaded draft amendment so that proper
In P v Q,u the court had the opportunity to deal with alleged improper conduct of the arbitral 9.043
files.” In the preparation of the documents, the bundle should be:54 consideration can be given as to whether objections should properly be made to
A printed case would be a combined statement of both facts and laws, whilst pleadings 9.038 tribunal in delegating their decision-making functions to the tribunal secretary. Amongst
such amendment and whether an adjournment should be sought...
would be n set of formal documents stipulating the material facts that a party would wish °tbcr things, the court expressly held that the use of the tribunal secretary to analyse
(1) Firmly secured (but not stapled); Pleadings arc not mere formalities. They impose a necessary discipline and are submissions and to draft procedural order were not improper delegations of decision-making
10 rely in a case. In litigation, Rules of the High Court (Cap.4A, Sub.Leg.) and Rules
(2) Arranged in chronological order from the front; of the District Court (Cap.336H, Sub.Leg) 0.18 prescribes in great detail particulars fundamental to enabling every procedural facet of the adversarial system to functions. The use of the secretary in those respects was within the boundaries of the proper
that have to be included in pleadings. Although the content covered by the printed case operate fairly.” ’ud appropriate use of a tribunal secretary. In dismissing the challenge, Popplew^ll J drew
(3) Paged consecutively on the top right-hand comer; and ■fclogy between a judicial assistant with that of a tribunal secretary:
•nd by pleadings would have slight differences, the purpose is to give both the arbitral
(4) Fully and easily legible. tribunal and the other side a general understanding of the facts that the parties would 9.041 Shortly thereafter, the Court of Final Appeal, again, in Kwok Chin Wing v 21 Holding*
** asserting in the hearing. This would help define the true issuc(s) in dispute in the Ltd61 restated the rationale behind pleadings that: “[67] As I observed in my judgment on the disclosure application, performing the
9.034 The bundles should then be bound together in lever-arch files or ring binders. Those •Mitral proceeding and hence, help focus on the arbitration. adjudicatory function is often an iterative process. There is nothing offensive per
files should never include over 250 pages and care must be taken to ensure that the ring* “The basic objective is fairly and precisely to inform the other party or othtf se to performance of that function in receiving the views ofothers, provided the
^ilst there are no strict rules of pleadings applicable to arbitral proceedings, the 9.039 parties in the litigation of the stance of the pleading party (in other words, that adjudicator makes his own mind up by the exercise of independent judgment
Pleading rules in litigation do shed light as to how parties should prepare pleadings for party’s case) so that proper preparation is made possible, and to ensure that time A judge may be assisted by the views of a judicial assistant or law clerk, bul
* A MMpU of Odw No I C4Q b« found on A.ppcadii 3 that does not prevent him or her from reaching an independent judgment in
* A ftinpU of l m of luuti Scott Schtdult cu bt found on App«dii 4
* htcat* rxmnoo 3 6 Document! f« Ut# at Tnil mi mood by Clotf Jusftco Li oo 12 February 2009, " A» Bokhary NPJ then wm
" Sot, foe eiamplt. Preenco [Xiectsoo 3 6. para 1 " (1994) 2 HKC 264, 269E-270E ] P°05] 2 HXLRD 795.799.
" /W.pariJ * 5 - (2013) 16 HKCFAJt 632, (27H34)
■ JW,pare I 9 A umplt Ouooology can b« found in Appendix 3
„ A«.799
•' (2013) 16 HKCFAR 663. [21). [23J.
DOnj 1 WIR 3123
11 IUJ. para 4 A Unipit Dnmani Ptrtono* can bt found in AppeoAx 6
 192 THE HEARING
DISCOVERY 1BJ
1M THE HEARING DISCOVERY I SI
4
(b) Relevance Ibe approach in O Co v M Co is certainly more restrictive as compared with the 9.053
accordance with the judiciaJ function. An arbitrator who receives the views of (2) The arbitral tribunal may order that any documentary evidence shall be traditional Peruvian Guano test Nonetheless, it seems to have been favoured as evident
9.050 The recurring theme in discovery is whether a particular exhibit or document is relevat
a tribunal secretary does not thereby necessarily lose the ability to exercise full accompanied by a translation into the language or languages agreed upon in many subsequent local authorities.”
and thereby discoverable. The test of relevance has a profound historical root which
and independent judgement on the issue in question .. by the parlies or determined by the arbitral tribunal.”
could be traced back to the ancient authority of Compagnie Fincmciere et Commercialt Yet in Chan Hung v Yung Kwong Chung,14 the court doubted whether it is correct 9-054
du Pacifique v Peruvian Guano Co,*6 which laid down the test of what is relevant 10 follow the more restricted approach in O Co v M Co,n in light of the fact that die
9,044 Popplewell J moved on to address the concerns the arbitration community had in light Administratively, the arbitral tribunal should ensure that competent interpreter and 9.046
(frequently known as the Peruvian Guano test): a document that may (not muit), Court of Appeal7* has all along been adopting the more liberal Peruvian Guano test
of the trend that tribunal secretary becomes more and more common: translator are readily at hand In the course of the arbitration. Time should also be
directly or indirectly, tend either to advance the case of the party seeking discovery or Subsequent cases77 seem to have followed the line of reasoning in Chan Hung.1*
illowed so as to ensure that the arbitral proceedings would not be delayed because of
to damage the case of his adversary would be regarded as a matter relevant to a matter
“f 68] Nevertheless there is considerable and understandable anxiety in the international translation of documents or exhibits. An arbitral tribunal is not strictly bound by the authorities cited hereinabove. As such, the 9-055
in question in the action.
arbitration community that the use of tribunal secretaries risks them becoming, rbitral tribunal would be presented with two diverging approaches both of which seem to
in effect, ‘fourth arbitrators’. Care must be taken to ensure that the decision­ (c) Transcript 9.051 Relevance is a wide concept A document does not have to be admissible70 or actually have gained some judicial support It will be very much a matter of discretion as to bow
making is indeed that of the tribunal members alone. The safest way to ensure prove or disprove any matter in question. As long as a document contains information (be arbitral tribunal would make orders as to disclosure. Whilst the arbitral tribunal might
la complex arbitral proceedings, different issues of facts and law may transpire in 9.047
llurt that Is the case Is for the secretary not to be tasked with anything which which may enable the party applying for discovery either to advance his own or damage themselves be cautious not to be later criticised as not offering a reasonable opportunity to
the course of the ora] hearing. To assist parties in making submission and the arbitral
involves expressing a view on the substantive merits of an application or issue that of his adversary, and such document may fairly lead him to a train of inquiry which tbe parlies to present the case and, therefore, erring on the safe side, to make disclosure and
tribunal in rendering her reward, parties may consider arranging transcription services.
If he Is so tasked, there may arise a real danger of inappropriate influence over may have cither of the two consequences, then such document would be disclosable.71 discovery as liberal as possible, the arbitral tribunal should have due regard to the parties’
This allows the proceedings to be transcribed and ready for the arbitral tribunal shortly
the decision-making process by the tribunal, which affects the latter's ability intention when entering into the arbitration agreement and, in particular, the tune and cost
sfler the day of a hearing. 9.052 In O Co v M Co,n the English court, nonetheless, adopted a more restrictive approach.
to reach an entirely independent minded judgment. Ihc danger may be greater implications when making those orders. Inevitably, what the arbitral tribunal was charged
The court held that:
with arbitrators who have no judicial training or background, than with judges to do is a delicate exercise discretion, which should be exercised carefully and judicially .
who arc used to reaching entirely independent adjudicatory decisions with the
5. Discovery "The principle was never intended to justify demands for disclosure of documents
benefit of law clerks or other junior Judicial assistants. However the danger (c) Arbitral tribunal's power to order discovery
at the far end of the spectrum of materiality which on the face of it were unrelated
exists for all tribunals. Best practice is therefore to avoid involving a tribunal
(a) General principles to the pleaded case of the plaintiff or defendant and which were required for The arbitral tribunal has a wide power in ordering discovery and disclosure as provided 9.056
secretory in anything which could be characterised as expressing a view on the purely speculative investigation. The excessively wide application of Brett LTi by Arbitration Ordinance s.56 which includes:
substance of that which the tribunal is called upon to decide. If the secretary's Discovery is a procedure where a party discloses nnd produces, for the other party’s 9.048 formulation of relevance has probably contributed more to the increase of the
role is circumscribed in thin way, the parlies can have confidence that there is inspection, documents to be used at trial. In civil proceedings, each party has a duty (1) Directing discovery of documents or delivery of interrogatories;
costs of English civil and commercial litigation in recent years than any other
no risk of inapproprinte influence on the personal and non-delegablc decision­ !o disclose all relevant documents, favourable or unfavourable, to the opposing party. factor other than the development of the photocopying machine. That formulation (2) Directing evidence to be given by affidavit; and
making function of the tribunal.” This process is often done by listing out the relevant documents and giving notice to the must not, in my judgment, be understood as justifying discovery demands which
other party. Discovery is an important process which prevents ambushing. In Ventouris would involve parties to civil litigation being required to turn out the contents of (3) In relation to any property—
(h) Translation/Interpretation v Mountain (The Italia Express),*6 Bingham IJ*7 said that: their filing systems as if under criminal investigation merely on the off-chance that (a) Directing inspection, photographing, preservation, custody, detention or
something might show up from which some relatively weak inference prejudicial sale of a property by the arbitral tribunal, a party to the arbitral proceedings
9.048 In the preliminary meeting, it would be essentinl to decide on the language of the "Our system of civil procedure is founded on the rule that the interests ofjustice arc to the case of the disclosing party might be drawn. On the contrary, the document or an expert or
arbitration. In international nrbitrntinn, witnesses and documents may often be written best served if parties to litigation arc obliged to disclose and produce for the other or class of documents must be shown by the applicant to offer a real probability
in language other than Chinese or Fnglish, or in n language that one or more arbitrator party’s inspection all documents in their possession, custody or power relating to (b) Directing samples to be taken from, observations to be made of or
of evidential materiality in the sense that it must be a document or class of which
on the tribunal is not acquainted with. UNCITRAL Model Law art.22M vested the (he issues in the action.” experiments to be conducted on the relevant property.
in the ordinary way can be expected to yield information of substantial evidential
power of deciding the language of the hearing in the hands of the arbitral tribunal. materiality to the pleaded claim and the defence to it in the broad sense which I
J gave a detailed working definition for the essential terms in this area of law 9.049 have explained. If the document or class cannot be demonstrated to be clearly
50. Article 22 of IJNCITHAL Model Law (Language) Sw. for example. Ay B [I99IJ HKLRD (Yrbk) 542 (Findlay JX *• Estate of Sg Chem Wah (HCAP V30OS. [2003]
Mentioned by Bingham IJ in R v B (Matrimonial Proceedings: Discovery):u connected to issues which have already been raised on the pleadings, or which HKEC 317)(CbuJ. isOra JA then was X Moulin Global Estate Holdings Ltd * KPMG (HCA 111/2007, poiO] HK£C
Article 22 of the UNCITRAL Model Ijiw, the text of which is set out below, would in the ordinary way be expected to be raised on the pleadings, if sufficient , ‘MX See also. by analogy. Rt Estate of Haig Teh Hue! (CACV 76/2003. |2003| HKEC 545) (La Pick™ 1AX
“For this purpose ‘possession’ means, 'the right to the possession of a document’. , (HCA 216. 217/2004. [2009] HKEC 74) (Deputy Judge Horace Wong SC).
has effect— information were available, the application should be dismissed." % fi^6) 2 Lloyd't Rep 347.
‘Custody’ means ‘the actual, physical or corporal holding of a document regardless . F* wangle. Dtak A Co (Far East) Ltd v NM Rothschild A Sons Ltd (1911) HKC 7S.
"Article 22 Language of the right to its possession for example, a holding of a document by a party as a for example, MeMn Haemal y U Fel Tu (HCA 1973/2012. (2015) HKEC 177X Mom Cheung tom-1
(I) The parties are free to agree on the language or languages to be used in servant or agent of the true owner*. ‘Power’ means 'an enforceable right to inspect Thsdns Ltd e CLSA Ltd {CACV 97/2007. (2007) HKEC 174SX m which tbe Com of Appeal aDownd evtma *ecaftc
4*covery on Pmenan Guano term*. “that such discovery may promota a relevant hae(i) of sotpasy m»d Save We efface
the arbitral proceedings. Failing such agreement, the nrhitral tribunal shall the document or to obtain possession or control of the document from the person
bwtreenog (be defendant 'i case or of undermining (bat of tbe plaintiff", and Paul > Models An GmbH A Co KG* IT
determine the Inngungc or languages to be used in the proceedings. This who ordinarily has it in fact’. The requirements of the rules are disjunctive in their L* (HCA 1501/2000. [2011 ] HKEC 91) in which Deputy Judge Coleman SC beid
- (1112)11 QBD 55. 60 and 63.
agreement or determination, unless otherwise specified therein, shall app'X operation, so for as possession, custody and power are concerned." " Cunt? Int v Lee Seek Mott (19*9) 1 HKLR 399. Full Range Electronics Co Ltd v Genera! Tech Industrial Ltd (CACV
"One area of tbsputa at the beating mi whether or not iba test of relevance in Hoag Kang m WU Wat in We
to any written statement by n party, any hearing nnd nny award, decision of 59/1997.11997) HKLY 531). O'Rourke y Dorblthlre [1920} AC SSI, 630. Penman Guano case, suggesting that (be excesses of Wat type of kseevery in to be deplored 1 accept
” Cheeroll Lidy Tot* (2003) 2 HKC 622. Tht Captain Grtgot (The Timas. 21 December 1990) (Be«1 LJ). Tbntor vAi*1*0 submission that (be Penmai Guano test is still (be tpplicable test even after the Ovd Jnabce Reforms of 2009
other communication by the nrhitral tribunal. [1995) I WLR447.
* I*9*]) 1 WLR607.61IH , (when the potoWiry of removing that test was rejected) "
n (1996) 2 Lloyd's Rep 347. (HCA 216.217/2004. [2009) HKEC 74X
, 4* Lord Ihngham then was
M AiUttnm fhdinance i Ml HWI)Fun 111, 1I6D-E
 JU THEHIAMSHG

114 Tiff UtAUltW mtunvruY iff 0. Upon receipt of any such objection, the Arbitral Tribunal may wvtu a* 11. Widas the tame ordered by
relevant Parlies to consult with each other with a view to resolvjcg 4* to fiie Arbitral Ttixau! and to
9.057 I He power vetted In the hand* of the arbitral tribunal does not exist In vacuum Any order) lie litigation, the IMA Rules put much emphasis on limiting the scope required for 9.0//) objection. on whsdi they amead to refy or wfedi fine?
or directions, including hut not limited to order* in rclotlon to discovery, is enforceable lucuvery and encouraging active case management in order to avoid unnecessary wide to the case aad material to its
in the tame manner at an order ur direction of the court.* When considering whether to Jucovcry and fishing exercises In implementing this, the MIA Rules gives further 7. IJther Party may, within the time ordered by the Arbitral Tribunal, requee
rawed as Documents, Wi
order discovery, the arbitral tribunal should hear parties’ submissions beforehand Ik* guideline) in Article 3: the Arbitral Tribunal to rule on the objection. The Arbitral Tribunal dul
produced, or ai other aubnmriomt of
may be done in the form of a Fedfem Schedule. then, in consultation with the Parties and in timely fashion, consider 4c
‘■Article 3 Documents Request to Produce and the objection. The Arbitral Tribunal may 12. With respect to the form of
(d) lliA Mules on Taking of Evidence In International Arbitration (he Party to whom such Request is addressed to produce any requested
1. Within the lime ordered by the Arbitral Tribunal, each Party shall submit (a) Copies of
Document in it* possession, custody or control as to which the Arbtad
9.0511 Unlike litigation, there are no set rules and guidelines that are binding on the artwtrsl to the Arbitral Tribunal and to the other Parties all Documents available to request of the Arbural
Tribunal determines (hat (7y the issues (hat the requesting Party wishes
tribunal as to flow discovery should he conducted The Arbitration Committee of the il on which it relies, including public Documents and those in the public
to prove are relevant to the case and material to Us outcome; 01) turn
International ftar Association (MIA) has prepared the flfA Mules on the 'faking of domain, except for any Documents that have already been submitted by
of the reasons for objection set forth in Article 9.2 applies, and (itij tut (b) a Party
Evidence In International Arbitration f fit A Rules; which aims at providing wan efficient, another Party.
requirements of Article 3.3 have been satisfied. Any such Document shsf I or produced io the form
economical and fair process for the taking of evidence in international arbitrations,
particularly those between fpjarlies from different legal traditions”.*’
2. Within the time ordered by the Arbitral Tribunal, any Party may submit to
the Arbitral Tribunal and to (he other Parties a Request to Produce.
I be produced to the other Parties and, if the Arbitral Tribunal so orders, to a. it that it reasonably usable by (he
otherwise or. io (be absence of such
8. In exceptional circumstances, if the propriety of an objection cm be
9.059 fJJA Rules art 2 suggested the following approach: otherwise;
3. A Request to Produce shall contain: determined only by view of the Document, the Arbitral Tribunal nay
“Article 2 Consultation on Evidentiary Issues fa) (I) a description of each requested Document sufficient to identify I determine that it should not review (he Document, In that event, fie
Arbitral Tribunal may, after consultation with (he Parlies, appou* m
(c) A Party is not obligated to produce
which are essentially identical unless
it, or
1. The Arbitral Tribunal shall consult the Marties at the earliest appropriate time in independent and impartial expert, bound to confidentiality, to review otherwise; and
the proceedings and invite them to consult each other with a view to sgreanf (II) a description in sufficient detail fincluding subject matter) of any such Document and to report on the objection. To the extent (hat tut
to an efficient, economical and fair process for the taking of evidence. a narrow and specific requested category of Document that
are reasonably believed to exist; in the case of Documents
I objection is upheld by (be Arbitral Tribunal, the expert shall not disclose Vo
the Arbitral Tribunal and to the other Parties (he contents of the Documeat
(d) Translations of Documents shall be
originals and marked as translations
2. The consultation on evidentiary issues may address the scope, liming and identified.
maintained in electronic form, the requesting Party may, or reviewed.
manner of the taking of evidence, including:
the Arbitral Tribunal may order that it shall be required to, 13. Any Document submitted or produced by a Party
fa) the preparation and submission of the Witness Statements and Expert identify specific files, search terms, individuals or other means I 9. If a Party wishes to obtain the production of Documents from a pexsa*
or organisation who is not a Party to the arbitration and from whom tut
the arbitration and not otherwise in the public
Reports; of searching for such Documents in an efficient and economic confidential by the Arbitral Tribunal and the
Party cannot obtain the Documents on its own, the Party may, within the
manner; used only in connection with the arbitration This
fb) the taking of oral testimony at any Evidentiary Hearing; time ordered by the Arbitral Tribunal, ask it to take whatever steps sre
except and to the extent that disclosure may be required of a Party la:
(b) a statement as to how the Documents requested are relevant to the legally available to obtain the requested Documents, or seek leave fro*
fc) the requirements, procedure and format applicable to the production a legal duty, protect or pursue a legal right, or
case and material to its outcome; and the Arbitral Tribunal to take such steps itself. The Party shall submit sod
of Documents; award in bona fide legal proceedings before a
request to the Arbitral Tribunal and to the other Parties in writing, and the
(d) the level of confidentiality protection to be afforded to evidence to (c) (!) a statement that the Document requested are not in the possession, authority. The Arbitral Tribunal may issue orders to
request shall contain the particulars set forth in Article 3.3, as applicable
custody or control of the requesting Parly or a statement of the this confidentiality. This requirement shall be
(he arbitration; and The Arbitral Tribunal shall decide on this request and shall take, authorize
reasons why it would be unreasonably burdensome for the obligations of confidentiality in the arbitration.
the requesting Party to take, or order any other Party to take,
(e) the promotion of efficiency, economy and conservation of resource* requesting Party to produce such Documents, and
steps as the Arbitral Tribunal considers appropriate \L, in its discrete*, 14. If die arbitration is organised into separate lssut
in unmeet ion with the taking of evidence.
(II) a statement of the reasons why the requesting Party assumes (he it determines that (!) the Documents would be relevant to the case sod jurisdiction, preliminary determinations, liability or
3. The Arbitral Tribunal is encouraged to identify to the Parlies, as soon as & Documents requested are in the possession, custody or control material to its outcome, (II) the requirements of Article 3.3, as applicable, Tribunal may, after consultation with the
considers it to be appropriate, any issues: of another Party. have been satisfied and (III) none of the reasons for objection set ford* * of Documents and Requests to Produce separately for
fa) (hat (he Arbitral Tribunal may regard as relevant to the case and Article 9.2 applies.
4. Within the time ordered by the Arbitral Tribunal, the Party to whom the
material to its outcome; and/or Request to Produce is addressed shall produce to the other Parlies and, if 10. At any time before the arbitration is concluded, the Arbitral Tribunal to*y
0) request any Party to produce Documents, (II) request any Party to use its 6. WrrrossES
the Arbitral Tribunal so orders, to it, all the Documents requested in its
fb) for which a preliminary determination may be appropriate.”
possession, custody or control as to which it makes no objection. best efforts to take or (HI) itself take, any step that it considers appropo**
(a) Eliciting evidence from factual
5. If the Party to whom the Request to Produce is addressed has an objection I to obtain Documents from any person or organisation. A Party to who*
such a request for Documents is addressed may object to the request f* loesses are the protagonists in the evidentiary phase of the arbitral
M41
* faSptf to W#v« *r a- «wr AAmtMm rjrSMU (SI NartStm. «4m coMSrog to UrK to some or all of the Documents requested, it shall state the objection any of the reasons set forth in Article 9.2. In such cases, Article 3.4 10 ^ling a witness will be entitled to conduct examination-m-chief o
to* toto Saw toMlMSi Mrts lot JMT to Oumm d dMr« vi wy rum tor ttfutof to in writing to the Arbitral Tribunal and the other Parties within the time ^bll tribunal is given the general power under the Arbitration
Xtnpmn* OnmfLUrlim r*pttnu Ud pOOfJ 4 HKLU.D 1JJ 0« fetea Mj. >IW to to f#"*/**- Article 3.8 shall apply correspondingly.
M-t f"P t* mill 4 HX1 404 fr CtHCTT 2V»I J. (»1<| MXBC 7SJ| O****** ordered by the Arbitral Tribunal. The reasons for such objection shall
fgmU (u'ur^mn mum /vipr** m urau 'A <U mSm « tuuJs* A/VrtrMAa Orfeuac* $ 61/)) be any of those set forth in Article 9.2 or a failure to satisfy any of the
• OlA tUm htmtlU requirements of Article 3.3.
 IW THEBZAET«C

(!) Z<gx/ advice prirtlrge

to withhold mi**wM*m faUjog wuhra a parundar category. «xh » mformatk*
9JWt Legal advice privilege is extended to all coczsscicaeioas m*v between
md parsec* on oath or rAhrwMton or Aktud Ax Memdance before the arbitral Vbvut Veodxsg to K*xmniM* or c/xnamjokatioe* for tbe porpoae of obtaining
representative* and client for the purpose of giving or recerviag legal advice
•A ******* m order 19 tfVK c/A*re « Vj prviwx O/smzm*t •* 90m evident* •Avtce. TW ywfloa of privilege arive* only wbec m/ormatioo if tough! ooder
irrespective of whether or not litigation is pending or coatestpbxd.1" In 7Vc« £nv?
WiImhw v*Md aormatl/ U jek/td u/vMusa* by flx part/ ',».‘.l*>g ben 4.v»» * t/xspoJvxy power* OxTyientxlify, /« Ax oAxr baud, givea ntetoi right to
District Council r Governor and Co of the Bank of England Qio 6/99 the House tf
t/wmifugujn-^n 'hurf,. VXJrn*A by the drifter part/ (known m cr&a^rxamfnakm, *4 prevent txiran elx frexn ottng or dtvulgmg infonnatioo. The right it not
Lords held Axl legal advice privilege extends to document* provided to lawyen for he
butty, *$»«, by Ax party •jA\uj% turn tor •XanfeMum (ksenan a* rc-eiumin/sum\ contmed, Idee privilege, to paniotilar categoriea of information hot appliet to aJJ
purpox of asking for presentational advice.
mioneMioo m which c/xiMentxItfy can aubaiat fie which it not is the public
Of fi/Anin*tU/nHn*UUf domain) and uaually depend* upon the miormvvm having been communicated 9J07O Importantly, the scope of legal advice privilege is subject to Ax impertan1
in ttldilfiltr, tee Coco ad//C/or* (hnyjneers; Ltd\ 1 '>6t| PSR415. Information that it is indeed a /ego/ advice. For a communication to be privileged, the advice
7 Mil Ihtem bare are teavrm Asa* oa#J f/x a 4 tlwA prwfUA, the vy*/x** rtMerrArjtt 1M4
and vf/.hm\jA prVx no fix oral hearing iMwadiy be directcd to aland m in may be fxdh privileged and rnbyect to right* of confidentiality, but the right* are given must be given as part of the professional practice of a lawyer** la Miner» (a) may appoint one or more expert* to report to it on tprrA snes So
ararnttMue^in^in/d of Ax vrtM*** WAkeeA Ax rxed to &'/ all exhibit* and 1*M not Ax tame Priest,9' the Home of Lords” held that leading money is dearly outside the ordiaxy
b» *><x.! MorMe*, tumkdvAe**, witfA wwb to hitfiktfM certain arena of Ax wttott* scope of a solicitor’s business and weald therefore not be subject to privilege The
Gate* like /? v iJrriry fdnyhtrotes' Court, n p tl (1996] AC 4i7 are concerned (b) may require a party to give the expert any refers* Hfhraaaon or
to draw Ax arbtfnd tnbwwrf'* mextum or clarify matters 4m were ariatnf at appropriate test as to whether a communication amounts to a legal advice is thk
whh privilege, the right to withhold information which would ordinarily be liable whether (be communicat ions or other documents were made confidentially for At produce, or to provide access to, any refcvart dm a.rA. pad*
Ax athrsttd heaving got* /a*. to production in court by comptdvxy proceaa It it Aut right which cannot be purposes of legal advice ” The English courts have nonetheless proved to constrv other property for his inspection
overridden by other cornideraiioM *A public intereat The question of whether one that broadly.
OoM-eastrdnatian
tan prevent the ditcVxtxe r/f auch information by comeone elx it a different one
9JM /hereafter, Am owao# party W»J1 wmAmA WAA^/MMtMvm triMuMy, there an and depend* upon Ax law r/f confidentiality A document may, for example, be (li) Litigation privilege
no letandarm* for <be vy/pe of cro*o</9mOMd94 and Ax '/pp'/wr.-g party may xfc my mbpc* I//1 VY and evempt from having to be dncloaed in litigation became it waa his written or oral report.
tpuMV**, m/hftM ot Ax '.ard/nal r«4e of relevancy 9.071 A more general privilege under the umbrella of LPP is litigation privilege. Lrttgarim the opportunity to pot questions to
brought info exittente frx the purpox of rAtainmg legal advice, even (hough it
privilege not only extends the scope of LPP beyond communkatioDS made dareedy order to testify on the points at hr
contam* no confidential information **
OUf KeecamtnelU/n between a client and his legal adviser but it also extends so as to cover any communkatiaQi
between the legal advisor or the client and a third party m contemplation of a litigation.* h ts paramount that parties be given the opportunity to
9MA VeaimouMum pr*rdde* Ax laaf opp>*usn*y for Ax party calling Ax wfcixw la Ta rvtlr taxing Ax dwfoM, I.FF ante* in light of a rclxioothrp between qualified 9M1
Nonetheless, if there are no contemplation of any litigation, this privilege does not start UNCITRAL Model Law mL2617\ Despite the tribunal
»«Ax ciartAcatlvne f/ow Ax 'S'/M^raonnatVm Mm said, re^namitMion drerM buyer* and Axir client*.** It nonethele** d/xe nrX entail that anything and everything
to apply.” engaged by either party, the parties are still rnfirtrri to pat
x4 he viewed a* a second ^ Ax party calling Ax wHneaa to reopen A* Merging out of auch relatutmhip would be protected by LW*. Father, the privilege from
PciJito Investment Ltd v KJockner East Asia Dd,m the
e/amkMVetk^XMf. 7be scope of qweerion* put in Ax tours* •Arw.atMeMum dvrAA Awloture only extend* to Ax content* of Ax communication* and Ax crrcumatance* 9.072 A piece of evidence weald be considered to fall under this privilege if the cornmnnirfeioB
(Mr*fora be Urr/Aed to issue* arising '/at /A Ax crosoo/amirMi/m and not further made was for the dominant purpox of pending or anticipated litigation.** If an advice Aould have the right to expect that be would be able to
(dating to giving advice or a content?lated lega I action i a* Ax cax may bey It certainly
the drx* ruA mean that all matter*, however trivial it it, flowing between Ax legal or a document was sought for multiple purposes, whether it will be privileged wfl Ae tribunal appointed experts. This is such a basic right that Ax
fhf t*%»i professional privilege *hd*or and the client wr/old be privileged H I'ince a communication i* privileged, *ucb depend on its dominant purpose.97 ** be conceived. On similar footing, the Fnglish Commercial Court held
fririlege will latt forever, hence Ax oft raid quote “once privileged, a Ivory* privileged”, private meeting of the tribunal with the expert to discuss his draft report is a
♦AW b * legal right, by wry r/f exception, allowing a party not to giv* answer* 91173 As emphasised,” once a material is privileged, it would always be privileged. In Ae •regularity. ”■
ugardlet* <A the pming of Ax client or any tubtequent proceedings,**
'X provide dovnwxnt* Insofar •* ffo# section fa concerned, Argo/ prtjfutUmtdprbitrp context of litigation privilege, the privilege continues to exist after the proceeding!
It ft a perquftix for a communication to be confidential before rxx can claim it is 9/168 Tke arbitral tribunal may also appoint assessors to assist it on
in*** 'JifMM/rAy h terms ra I.J'P) Will be considered conclude. In Horst Joachim Franz Geicke v 1-Onasla Ltd,9* Deputy Judge Mhnnn*
fAvileged Thu*, ff comnwnicsted to third perwm*, ft is not prrxected by privilege, Ae amount of (he costs of arbitral proceedings (other than Ax fees
94*4- |U tmtaede of\YY f« Up tv.A AM* Ax *UninMt#Vm tA )t*1M 91 \MV gtvn du*» Tfwt, privilege cann/4 be claimed between partner* regarding legal advice given to Ae tribunal). "* Parties must be given a reasonable opportunity to
Ax vnAAAmu Vt *\\ow wavjbm md t*Aa fb/o/ fxtv/een Axwvtfvea sn/J Axfr " GrttHetrtfi r GatltH (1131) ] Mjr A K 51. 3-5 E7.611 (Leri Br%n|*aa LC% ^formation, opinion or advice offered by any of those assessors.1”
Ae partnership im a vdtoU) a* (hr/*e advice* are not confidential amongst the partner*
•Avtarxi WVpAa /TT* atrtrea vxrx txoAxHy wfA» c&AUknlUftty; they remain W* • t2W5| I AC 410.
Armxlvr*'’
Antmm xrl dtttvetA Utrl apeoxa fyxA tUA1n.mm Ml defined the urid conotfU nt* " OrlpncP Herrlrrni CothrrU, C* r Moon (1*74) 30 LT 5*5
rnumAy X Ml W HK1 blrfAume UA t Al/km4* " (JfMJ AC 551
" ^ B~rn U*T4><h » CcmnmUrtom ofhUmd [1927J AC JS6
” Aalaful r Atr Infm [IV1(] d 317 (Tryfe* LT).
*tVH, H fa tuvAMi*/ Vt dhOntiiith between J,PP and right* anting frf* - BuHtiGm an* Otic** Hamm,, £V» (1MJ J QB 22J rDf—* MX)
'xxrMcr.tial»t/ f.PF fa a privilege, Aial f* t/r ary, a legal right, by way «f * t (r>*4~r* ritj r r vmmtmi*** ^fmem Tm p»Vl 3jJ ACItf ** r u Monhou (1U1) J7 d D 675. HoTttSmprDr May CMm Tt* Mmy (HCA 34901914. (1991] HK#
* tw i»Mf4 M mU Mtf W f*MU to dM p>v*4f« far mmm m4 *W«m« m *m HU My U VM&Umtl 527) A 4ocm»<1 .<^<4 ■« b< ytrtfKUA by btiftoog pnvilef evtn «ftq Set u « malrmfitaam at b>t»«W *"
efJAytvm u, tom* gerxral r/bflgrtt/xi to aotv/er rpxafl/xia rx provide doewnet**' **r*lf f Jmwtet 14 ‘/Mi t, tm<eH r OXtoXf (IW/J I r^» )| TW# U u. y&AUu t« \9yitut 'A^tcu docmmml cm* Mo rrJMeoc* Sum* * Fatter (It15) 15 QBD 114
*w «>m faMMM ax/r r tmt; Hi OJt J2 rt/vwK* it iu Cam >a uoua ra** * *41 &4**o*) (?oh<0 Ur—anpmem frt*J*gg) [1*97J AC 16 i»J4
*w»4 t*m, t*>/Uv imrM4 to far iWl*, X • *&+'*/ HKXAA f Wmg CU W* MM) \4 tOtfAt iVi A * " - BrifUh (1914] AC J21, Hriun r Unry^ame \\,t\\\C}n 734. T~> TM />•» r Om C*** ** PW3J 2 HKL* 39
* *xwx*»'*4***M#toa, OpmthtHtt f ,v*n f tmti u / puvn (IVWJI WI> 117, tmf tm H—t9 ( of AoiHt [H/A\ J MXlJHj (in»] 1 KKC2JJ. CEmropt) LMtAI Am* CXC 1243
* W' '<»»»> t Mr A K M, Mgf aia rj>wr tN^^w !/■), «X/M«r ^ /** U*>*, */M~i ** M Olmimmm I, n HMmm MW 9m wmt " %m pm 9067 *+mmam Or*mmc .Mfit.)
•AM, *MiU9\ ft 'Ml«, r/, * *^*»er#»r^fy4C*(iifi,ir^rf/U4 - WCA 2379/2009. (70] I] H3CEC 1365 HiMOA)
* 'Xo*, f/xr/»o IM,fti| tWf Mm*ftng (itrum! Aurtntr fjJr tudmut 4 fhtnn 0/e4X fmrlntn \2Cit) (% W
 But thou, when thou prayest, enter into thy closet, and when thou hast shut
Chapter 10 thy door, pray to thy Father which is in secret, and thy Father which seeth m
secret shall reward thee openly (Matthew 6:6)
INTERIM MEASURES

1. Introduction
Paaa

1. Introducticm...................................-.......................................................................... 10.001 A party to arbitration would be eager to seek remedy (usually in monetary form) upon tbe I I.Ml
end of the proceeding. This hope might on occasion vanish if tbe other party dissipated
1 Venue of Application ............. ...........................................................~............... 10.003
aO of their assets to another entity or to costs of die litigation or arbitral proceeding. On
(i) Power of the arbitral tribunal----------------------------------------- -------------- 10.003 tome occasions, a party might deliberately attempt to frustrate the proceeding. In order
(b) The court’s role in interim measures.............................................................. 10.006 to remedy such defect, the Arbitration Ordinance (Cap.609) vests powers in both die
court and the arbitral tribunal to order to or prohibit from tbe other party, as die case
3. Interlocutory Injunction.......................................................................................... 10.011
may be, doing something. This can sometimes be done in the absence of the other party
(i) Purpose.________________.....—............... ...... ............................................ 10.011
without being subject to the criticism that tbe arbitral tribunal or tbe court did not allow
(b) Principles enunciated in American Cyanamid.............................................. 10.013 the other party a fair opportunity to be heard.
(i) Serious question to be tried.................................. .............................. — 10.015
This chapter first evaluates where a party should go when they wish to seek 1QM2
(ii) Adequacy of damages............................................................................... 10.017 interim measures. It then moves along to consider the tests both the court and the
(iii) Balance of convenience 10.018 tthitral tribunal would consider when there is an application for interim measures.
Sample orders for the common interim measures are appended at the end of this
4. Mareva Injunction (Freezing Order)..................................................................... 10.019
chapter.
(a) Purpose_______________ __ __ ___ _____________________________— 10.019
(b) Ex parte application and full and frank disclosure....................................... 10.021
(c) Principles---- --------------- -------- -.................................................................... 10.023 2. Venue of Application
(i) Good arguable case.................................................................................... 10.024
(ii) Real risk of dissipating assets in the jurisdiction..................... ............. 10.025 (a) Power of the arbitral tribunal
(d) Third parties holding the assetsof the respondent......................................... 10.030 The primary venue to apply for interim measure is the arbitral tribunal. UNCI 1KAL 10.003
(e) Ancillary disclosure order.. 10.031 Model Law art 171 vests wide and unfettered general power in the hands of the arbitral
tribunal in granting interim relief:
5. Anton Piller Orders (Search Orders)................................................................ ....10.032
(•) Purpose------------------ 10.032 35. Article 17 of UN C IT KAL Model Law (Power of arbitral tribunal to
(b) Principles_____________________________________________ 10.033 order interim measures)
(c) Execution------- -- ----------------------------------------- 10.034 (1) Article 17 of the UNCITRAL Model Law, the text of which is set out
(d) Discharge-------------------— 10.037 below, has effect—
^ Security for Costs_______ _____________________________ _____________ 10.039 “Article 17. Power ofarbitral tribunal to order interim measures
(a) Power of the arbitral tribunal to require claimant to give
(1) Unless otherwise agreed by the parties, tbe arbitral tribunal may, at
security for costs--------------------------------------------------- 10.039
the request of a party, grant interim measures.
(b) Purpose ------ 10.041
(c) General principles in granting security for costs......................... 10.043 (2) An interim measure is any temporary measure, whether in tbe form
of an award or in another form, by which, any time prior to tbe
(i) Merits of the claimant's cjsc •••• • ■••••••••••••••••••••••• •••*••••••••••••••••••• •••••••• 10*046
issuance of the award by which the dispute is finally decided, tbe
(ii) Financial resources of the claimant.......... ............................................. 10.048
arbitral tribunal orders a party to:
(iii) Claimant residing aboard................. .............. ..... .................................... 10.051
 198 INTERIM MEASURES INTERLOCUTORY INJUNCTION 199
196 INTERIM MEASURES VENUE OF APPLICATION 197

a peradventure, that the charterers would suffer serious and irreparable damage if UNCITRAL Model Law art. 17 emphasises that one of the main purposes of ordering 10.012
(a) Maintain or restore the status quo pending determination of Instead, Arbitration Ordinance s.61 comes into play. As a general rule, any order
the order were not made.”9 interim measures is to ensure that status quo can be maintained. What amounts to
the dispute; w direction made by the arbitral tribunal would have the same effect as an order or
status quo has been subjected to much debate. In Safe Kids in Daily Supervision Lxd r
direction of the court.5 Arbitration Ordinance s.61(5) specifically stipulates that this
(b) Take action that would prevent, or refrain from taking action 10.009 His Lordship then summarised the position succinctly as follows: McNeill,'* the High Court of New Zealand held that status quo is not a finite concept
includes an interim measure ordered by the arbitral tribunal.
that is likely to cause, current or imminent harm or prejudice but is inherently flexible. It is for the arbitral tribunal to assess generally the overall
to the arbitral process itself; "The matter can perhaps best be put this way; where a party to an international circumstances of the case and to come to the conclusion as to how the discretion of
(b) The court’s role in interim measures
commercial arbitration, the seat of which is in a place other than Hong Kong, seeks granting interim measures could be best exercised.
(c) Provide a means of preserving assets out of which a subsequent
Despite the fact that the arbitral tribunal does have jurisdiction in ordering interim 10.006 ‘an interim measure of protection’ from the court of Hong Kong without having
award may be satisfied; or
measures, on some occasions, interim measures would be more appropriate to first obtained the approval of the arbitrators to his application, the Hong Kong court (b) Principles enunciated in American Cyanamid
(d) Preserve evidence that may be relevant and material to the be ordered by the court so that such order could be enforced more thoroughly and should refuse the application unless satisfied that the justice of the case necessitates
Tbe key principles for the arbitral tribunal to grant an interlocutory injunction are the same 10.013
resolution of the dispute." effectively. Arbitration Ordinance s.45 allows the Court of First Instance of the High the grant of the relief in order to prevent what may be serious and irreparable
is those before a court,15 which is set down in the celebrated speech of Lord Diplock in
Court, to order interim measures. These interim measures may even exceed those that damage to the position of the applicant in the arbitration. If, as I think is here tbe
(2) An interim measure referred to in article 17 of the UNCITRAL American Cyanamid Co v Ethicon Ltd.*• This could be usefully summarised as follows:
may be properly ordered by the arbitral tribunal.4 That said, the court may decline case, the applicant is unable to discharge this (admittedly, very heavy) burden, tbe
Model Law, give effect to by subsection (1), is to be construed as
ordering interim measures on the basis that the interim measure sought was, at the time Hong Kong court should refuse him relief.”10 (His11 Lordship’s own emphasis.)
including an injunction but not including an order under section 56. (1) The grant of an interlocutory injunction is a remedy that is both temporary and
of the application, the subject of the arbitral proceedings and that the arbitral tribunal
discretionary;
(3) If on arbitral tribunal has granted an interim measure, the tribunal would be a better venue to make those interim orders.5 10.010 Bokhary JA" supplemented with:
may, on the application of any party, make an award to the same (2) The evidence available to the arbitral tribunal at the hearing of the application
Under Arbitration Ordinance s.45(2), the court has the power to grant interim measure 10.007
effect as the interim measure. “The courts must be careful not to usurp the function of arbitrators through for an interlocutory injunction is incomplete. It is given on affidavit or
for arbitral proceedings commenced outside Hong Kong, which is a power conferred
excessive zeal in attempting to assist them. There can be situations in which there affirmation and has not been tested by oral cross-examination;
10.004 on the court under High Court Ordinance (Cap.4) s.21M. The test as to whether to
In considering whether to make those orders, UNCITRAL Model Law art. 17A2 requires is a real danger that a party would, unless stopped by the courts here, do something
grant the interim measures is the same as if the court is considering whether to grant (3) It is not a part of the arbitral tribunal’s function at this stage of the arbitral
the applicant to satisfy the arbitral tribunal that: which would render nugatory an application which the opposite party could,
an interim relief to proceedings commenced within Hong Kong.# In Compania Sud proceeding to try to resolve conflicts of evidence on affidavit or affirmation
timcously and with reasonable prospects of success, make to overseas arbitrators
36. Article 17A of UNCITRAL Model Law (Conditions for granting interim Americana de Vapores SA v Hin-Po International Logistics Ltd,1 the Court of Final as to facts on which the claims of either party may ultimately depend or to
or the courts of the country in which they arc sitting. In such a situation — and
measures) Appeal considered whether to grant an injunction in aid of foreign proceedings under decide difficult questions of laws which call for detailed argument and mature
when (as in the present case) service is possible — it may be that the courts here
High Court Ordinance s.21M. The court considered the following: considerations. These arc matters to be dealt with at the oral hearing,
Article 17A of the UNCITRAL Model Law, the text of which is set out below, can properly make a prohibitory order to preserve the position pending such an
application overseas. Making such an order might be truly to assist the arbitrators (4) When an application for an interlocutory injunction to restrain a respondent
has effect— (1) Whether the judgment given in the primary jurisdiction is one that Hong Kong without in any way usurping their function.”12 * * from doing acts alleged to be in violation of the claimant's legal right is made
“Article 17A. Conditions for granting interim measures courts would enforce; upon contested facts, the decision whether or not to grant an interlocutory
(1) The party requesting an interim measure under article 17(2)(a), (b) and (2) If so, whether the plaintiff had a good arguable case before the foreign court injunction has to be taken at a time when ex hypothesi the existence of the right
(as opposed to under Hong Kong law) and whether there was a real risk that or the violation of it, or both, is uncertain and will remain uncertain until final
(c) shall satisfy the arbitral tribunal that: 3. Interlocutory Injunction
the defendant would dissipate his assets if the injunction was not granted; and judgment is given in the action;
(a) Harm not adequately reparable by an award of damages is likely
(3) Whether it is just and convenient for the injunction to be granted. (a) Purpose (3) It was to mitigate the risk of prejudice to the claimant during the period before
to result if the measure is not ordered, and such harm substantially
that uncertainty could be resolved that the practice arose of granting him relief
outweighs the harm that is likely to result to the party against whom 10.011 An injunction is an order (either by the court or the arbitral tribunal) restraining the
Whilst the court acknowledges that it has such jurisdiction, the court has proven to be 10.008 by way of interlocutory injunction;
the measure is directed if the measure is granted; and commission or the continuance of some wrongful act. On occasion, an injunction tar/
extremely reluctant to intervene in the course of arbitral proceedings. In the leading also be issued on the basis of restraining wrongful acts which arc threatened but not (6) The granting of interlocutory injunction is subject to the claimant's undertaking
(b) There is a reasonable possibility that the requesting party will •uthority of Owners of the Ship or Vessel Lady Muriel v Transorient Shipping Ltd * yet commenced (known as quia timet injunction). In court, an injunction is made by to pay damages to the respondent for any loss sustained by reason of the
succeed on the merits of the claim. The determination on this Godfrey JA said that: summons, with evidence tendered in the form of affidavit. A draft order should also be injunction if it should be held at the proceeding that the claimant had not been
possibility shall not affect the discretion of the arbitral tribunal in
appended with the summons. Skeleton arguments in support of the application should entitled to restrain the respondent from doing what he was threatening to do;
making any subsequent determination. “I am of the opinion that before the Hong Kong court would be justified in making also be submitted.15 Whilst there arc no strict rules and regulations for applied*00
such an order in aid of a foreign arbitration, it would have to be satisfied, beyond (7) The object of the interlocutory injunction is to protect the claimant against
(2) With regard to a request for an interim measure under article 1 7(2)(d)t tbe before an arbitral tribunal, those practices in court arc to be encouraged.
requirements in paragraphs (1 )(a) and (b) of this article shall apply only injury from violation of his rights for which he could not be adequately
compensated in damages recoverable in the action if the uncertainty were
to the extent the arbitral tribunal considers appropriate.”.
• /w. (it)
10.005 UNCITRAL Model Law arts.!7H and 171 touch upon the recognition, enforcement | ibid - /W.|13).
| Art.tr.tion Odmuic* * 45(3). | W>I211NZLR?14.
11 At Ihe learned Bokhary NPJ then wii
and grounds for refusing to enforce interim measure ordered by the arbitral tribunal. , Ttfh Garden Asia Lid v Tuneec International Co Dd(HCMP 2421/2013, (2015) HKEC 2412k
u Omttn of the Ship or Vessel Lady' Muriel v Dxsnsorlenl Shipping Ltd (1995) 2 HKC 320. (16).
Nonetheless, those provisions have not been incorporated in the Arbitration Ordinance. Top Gains Minerals Macao Commercial Offshore Ltd v TL Resources Pie Lid (2016] 3 HKC 44. CSSC Huangpu u See in detaili Practice Direction 11.1 Ex Pone. Interim and Interlocutory Application! Tor Relief (Including In;«»c*'4 l,97S) AC 396. «ppU«d in Herat Kon* in HM A-G In andfor Untied Kingdom r Sooth China Atonm* Pam Ud (19*1)
, ^enchong Shipbuilding Co Lid v Dry Bulk Services Lld(HCMP 1626/2016. (2016] HKEC 2739) Relief). I WORMS.
, (2016) 19 HKCFAR 516
1 EbctcdcM m Arfetrsoofl Ordinance i 36 1*993)2 HKC 320
 202 INTERIM MEASURES
MAREVA INJUNCTION (FREEZING ORDER) 2*J
m CSTTJUM MEASURES INTERLOCUTORY INJUNCTION 201
(6) If the extent of the uncompensatable disadvantage to each party would not application should also be submitted.*' Whilst there are no strict rules and regulations
resolved in his favour at the hearing; but the claimant’s need for such protection of his case than is required in other applications.1* In those circumstances, the arbitral differ widely, it may not be improper to take into account in tipping the balance for application before an arbitral tribunal, those practices in court, again, should be
must be weighed against the corresponding need of the respondent to be tribunal should expect the claimant to show that he is “at least likely to succeed at the relative strength of each party’s case as revealed by the affidavit evidence encouraged.
protected against injury resulting from having him prevented from exercising trial”,30 or “at least very likely to succeed at trial”,21 has “overwhelming balance on the adduced on the hearing of the application. This, however, should be done only
his own legal rights for which he could not be adequately compensated under merits”22 or “has good prospects of success on the merits".2* where it is apparent upon the facts disclosed by evidence as to which there is (b) Ex parte application and full and frank disclosure
the claimant’s undertaking in damages if the uncertainty were resolved in the no credible dispute that the strength of one party’s case is disproportionate to
In order for a Mareva injunction to be efficacious, this has to be done in a secret manner 10.02;
respondent's favour at the trial; (\\) Adequacy of damages that of the other party.
in which the other party should not be notified in advance. Thus, the application for
It would only be suitable for the court or arbitral tribunal to grant injunction if damages 10. (7) In addition to the factors already mentioned, there may be other special factor* t Mareva injunction is always done on an ex parte basis, and the other party would
(8) The arbitral tribunal must weigh one need against another and determine where
would not be an adequate remedy. Browne LJ expanded upon Lord Diplock’s criteria to be taken into consideration in the particular circumstances of individual cases not be notified for the hearing. The claimant is under an obligation to make full and
“the balance of convenience" lies;
fo American Cyanamid Co v Ethicon Ltd) in Fellowes & Son v Fisher.24 hank disclosure to the court or the arbitral tribunal with supporting affidavit far the
(9) There is no rule of law or practice to the effect that the arbitral tribunal is not ipplication for a Mareva injunction.*2 In making the application, the claimant is
entitled to take any account of the balance of convenience unless it has first (1) The governing principle is that the arbitral tribunal should first consider whether, (Hi) Balance of convenience
expected to proceed “with the highest good faith”.** The claimant must make proper
been satisfied that upon the evidence adduced by both the parties on the hearing if the claimant succeeds at the proceeding, he would be adequately compensated 10.018 Lord Goff in R v Secretary ofStatefor Transport, ex p Factorfame Ltd (No 2)* held that inquiries before submitting the application.*4 The claimant should give particulars of his
of the application the applicant had satisfied the court that on the balance of by damages for any loss caused by the refusal to grant an interlocutory injunction. if there is doubt as to the adequacy ofeither or both of the respective remedies in damages, claims against the respondent, stating the grounds of his claims and the amount thereof
probabilities the acts the other party sought to be enjoined would, if committed, If damages would be an adequate remedy and the respondent would be in a then the arbitral tribunal should proceed to consider the balance of convenience, having and, in addition, should fairly state the points made against him by the respondent”
violate the applicant’s legal rights. The purpose sought to be achieved by giving financial position to pay them, no interlocutory injunction should normally be in mind all the circumstances of the case. It is only after the arbitral tribunal has come
to the court discretion to grant interlocutory injunctions would be stultified if granted, however strong the claimant's claim appeared to be at that stage.25 to the conclusion that damages awarded after the expected arbitral proceeding would The duty of full and frank disclosure is an ongoing and heavy one. The claimant is under 10.021
the discretion were clogged by such a technical rule; be an inadequate remedy that the arbitral tribunal is enjoined to look at the balance of the obligation to inform the court or the arbitral tribunal as soon as he becomes aware
(2) If, on the other hand, damages would not be an adequate remedy, the arbitral convenience. In essence, the arbitral tribunal would look at the risk of doing injustice to that the court or the tribunal has been misinformed or given incomplete information at
(10) However, the arbitral tribunal must be satisfied that the claim is not frivolous or tribunal should then consider whether, if the injunction were granted, (he time of the ex parte application.” Whenever found to have failed in making a full
the parties.27 If the risk were evenly balanced, the arbitral tribunal should be unwilling
vexatious, in other words, that there is a serious question to be tried; and the respondent would be adequately compensated under the claimant’s and frank disclosure, the ex pane injunction should be discharged without consideration
to grant an interlocutory injunction and preserve the status quo.a
(11) Unless the material available to the arbitral tribunal at the hearing of the undertaking as to damages. If damages in the measure recoverable under such of the merits.’7
application for an interlocutory injunction fails to disclose that the claimant has an undertaking would be an adequate remedy and the claimant would be in a
any real prospect of succeeding in his claim for a permanent injunction at the trial, financial position to pay them, there would be no reason upon this ground to 4. Mareva Injunction (Freezing Order) (c) Principles
the arbitral tribunal should go on to consider whether the balance of convenience refuse an interlocutory injunction.
The principles governing the grant of a Mareva injunction are largely identical to the io. or
lies in favour of granting or refusing the interlocutory relief that is sought (3) It is where there is doubt as to the adequacy of the respective remedies in (a) Purpose principles enunciated in American Cyanamid Co v Ethicon Ltd.n In addition, the court
damages that the question of balance of convenience arises. It would be unwise 10.019 The purpose of the Mareva injunction is to restrain the disposal of property over which or the arbitral tribunal (as the case may be) should be satisfied that:
10.014 The main significance of American Cyanamid Co v Ethicon Ltd is (1) whether there to attempt even to list all the various matters which may need to be taken the claimant has a proprietary right/interest. The Mareva injunction not only stops the
is a serious question to be tried; (2) whether “damages” is a remedy sufficient for the into consideration in deciding where the balance lies, let alone to suggest the respondent from dissipating or disposing of those assets but also goes further to stop (1) The claimant has a good arguable case on a substantive claim over which the
claimant; and (3) whether the balance of convenience lies in favour of the claimant relative weight to be attached to them. These will vary from case to case. a claimant from dealing with those properties. This helps to solve the hazards that arbitral tribunal has jurisdiction;
These will be discussed in turn.
(4) Where other factors appear to be evenly balanced, the arbitral tribunal should a claimant might possibly face where the respondent has no property to satisfy tbe (2) There are assets within the jurisdiction;
preserve the status quo. award eventually handed down by the arbitral tribunal. The respondent, by virtue of the
(1) Serious question to be tried
Mareva injunction, would not be able to dissipate the amount in so far that the award (3) The balance of convenience is in favour of granting the injunction;
10.015 The court has frequently used “a real prospect of success" or “not frivolous or vexatious" (5) The extent to which the disadvantages to each party would be incapable of could be satisfied.29 (4) There is a real risk of dissipation of assets, or removal of assets from the
interchangeably with “serious question to be tried”.17 Nonetheless, the arbitral tribunal being compensated in damages in the event of his succeeding at the proceeding
should only investigate to a limited extent, the merits of the case. Where the arbitral is always a significant factor in assessing where the balance of convenience lies. 10.020 The mode of application for Mareva injunction before the court is more or less simi!®- jurisdiction, which would render the claimant’s award of no effect; and
tribunal is satisfied that the respondent has no arguable defence to the claimant’s claim, to that of an ordinary injunction before the court, save that an application for Maro'o (5) The claimant must comply with a strict duty of full and frank disclosure.
it is unnecessary for the arbitral tribunal to consider the “balance of convenience injunction would almost invariably be applied on an ex parte basis. The applica*'00
before exercising its discretion to grant an interlocutory injunction.11 Zheng Ut Lit v Praspetfield Venturis Ltd (No I) [2003] 2 HKC 33. Simtlnk International Holding! Lid v Wong Shu is made by summons, with evidence tendered in the form of affidavit A draft order
[2010] 3 HKLRD 653, LcR Ho! Ping v Persons Occupying Portions ofNathan Road near to twtd between Argyll should also be appended with the summons.*0 Skeleton arguments in support of the
10.016 In cases where a granting of interlocutory injunction would mean finally disposing brett d Drardas Street (HCMP 2104/2014.13 Novtmbo 2014). Tech Garden Asia Ltd v Tuneec International Co Ltd
of the arbitral action in favour of the successful party to the application, the arbitral , (HCMP 2421/2013. [2013] HKEC 24*2), [21). [33}-{3«) u detail PricOce Direction 112 Manns hjmOiom tod Anton Plfler Oldest
ShenJ^n Universal Enterprises Industry v Wei Btm Trading Co Ltd [1919] 1 HKLR 470. Ntciklnd Holdings Ltd * liar
bm>ink International Holdings Ltd e Wong Shu Wing [2010] 5 HKLRD 633. Sim Kon Fah v JBPB & Co [2011] 4
tribunal should approach the matter on a broad principle to avoid injustice. The claim®3* HKLRD 45. " [I991JI AC 603. r« Nhrg (CACV 43V2000. (2001J HKEC 337). 71ong King Sing v Sam Boon Peng Tee [2011) 3 HKLRD *31
NJH Ud v Woods (I979J I WLR 1294. 1306. Music Advance Ltd v Incorporated Owners of Ar&h Centre P***1 Schmttim v Fanlkes (1 *93] WN 64 (Obtry J)
in those circumstances would face a higher evidential burden in providing the merits Fo*t-Unk Express Ltd r Falcon Express Ud(HCA 2040/2005. [2006] HKEC *).
(2010) 2 HKLRD 1041 (Mi J. is (be lemad CJ (ban wag). W Mellat v Nikpour [19*3] FSR *7
Coyne v Glottal Natural Resources Pie [1914] 1 AH ER 225
9 Thompson v Pari (1944) KB 401 *** ChemdHs Shipping Carp v Untmarine SA [1979] QB 645 (Dtmaag MR)
Loyal Rich Trading Ltd v Green Energy Thtehng LtdfDCCJ 4331/2016. [2017] HKEC 453).
" Derby A Co Ud v Weldon (Nos 3 end 4) [1990] Cb 65. 76 (Lord Donildura MR). Atlas Maritime Co SA r A** Commercial Bank of the Near East PU v A. B. C tmd D [19*9] 2 Lloyd* Rep 319
" Umhrrcan Ltd • Robson Books Ltd [\9T)) FSR 466 (Magmy V-C) Sc* slu, Jau Hwo Sirwan y E Excel Ltd 0** [1976] QB 122.137.
2493/2001. (2001] HKEC 1072) Maritime Ltd (The Cora! Rose) (No 1) [1991] 4 All ER 769 (ttcboll* U. u Lord Hcbolh then wn) > Mai Ud v Elcombe [19*1] 1 WLR 1330. 1331 (Balcomba DJ
Nooctkdeu, in Top One International (China) Property Group Co Ltd v Top One Property Group Lid [2011] 1 HKLRD
* UmchmrrCorp v Cenoolty [1970] Ck 420. Official Custodumfor Chorttlu v Mackey [1913] Q> 16*. Mo Ttadi't L* " Se« Appendix 7 for a draft order of Mareva Injunction. H*75] AC 396. tot alto pan 10.013.
[42], To J observed tint Lord Diplod, did not go to fm At lo uy tint i refusal oi to interlocutory injunction must
• Odr Sal CWr Ton* [2000] 2 HKC 612 **«a*n]y follow tn aO cases vkm% damages ire an adequate remedy for (he defendant
 206 INTERIM MEASURES
ANTON FILLER ORDERS (SEARCH ORDERS) VT
2*4 INTERIM MEASURES MAREVA INJUNCTION (FREEZING ORDER) 205
(4) In a proper case, the court may direct an issue to be tried cither before or after be summarised that the court or the arbitral tribunal would be taking into account the
(I) Good arguable case conduct, as opposed to the underlying motives. There is no onus for an applicant to the main action as to the ownership of the assets. following factors:
10.024 In applications for Mareva injunctions, the threshold should be more than raising "i show a nefarious intent on the part of the respondent.49
serious question to be tried" The arbitral tribunal or the court should be satisfied that (d) Third parties holding the assets of the respondent (1) The claimant should demonstrate a strong prima fade case. It is not sufficient
IIis always difficult for a party to actually demonstrate that there is a real risk of 10.027
the claimant had shown “a good arguable case” in the sense that the claimant’s case for the claimant to show merely a “serious question to be tried”.
asset dissipation. There have been previous attempts to justify a real risk of dissipation 10.030 The claimant would be under the duty to give third party notice of the injunction made
should be more than barely capable of a serious argument.’* Nonetheless, this does not of assets by alleging that the respondents have an "unacccptnbly low standard of (2) The claimant should demonstrate that a risk of destruction or removal of
by the court or the arbitral tribunal so as to notify them of their right to seek to vary
mean that the claimant has to be put so far as to say "he is likely to win” or that he has commercial morality” and thereby the act now done by the respondent should be evidence would be more than merely possible.®
the order.*7 A third party, upon receiving the Order by the court or the arbitral tribunal
a “much better case" than the respondent.40 sceptically scrutinised by the court of the arbitral tribunal. The history of acting in n would be bound by the terms of the injunction. He must then do what he reasonably (3) The harm likely to be caused by the execution of the order to the respondent and
way of "low standard of commercial morality” can also be used to infer and conclude can to preserve the assets. In the case of a court order, he would otherwise be guilty of
(ii) Real risk of dissipating assets In the Jurisdiction his business affairs must not be excessive or out of proportion to the legitimate
that there is a sufficient risk so as to justify the grant of a Mareva injunction.*0 In the contempt of court.** object of the order.
10.025 The court or the arbitral tribunal must bo satisfied that the refusal of an injunction recent authority Crete Maritime Corp v Emirates Shipping Line DMCIsST,*' the court
would involve a real risk that the award in the claimant’s favour would, because of the held that the “low standard of commercial morality” embraces a wide spectrum of acts (c) Execution
(e) Ancillary disclosure order
respondent’s removal or otherwise dealing with the assets, remnin unsatisfied.41 The ringing from clear cases of fraud to sharp commercial practices which do not, per sc, Given the draconian nature of the order, the order has to be executed with utmost are. 11034
court or the arbitral tribunal is not looking for malicious intent, but the claimant should give rise to an inference of a real risk of dissipation. Unless there is clear evidence, it 10.031 There might be situations where the applicant does not actually know where the assets
Arespondent against whom an Anton Piller order has been made should be informed of
give some grounds so that the court or the arbitral tribunal would be persuaded that the would not be right to infer that the respondent’s conduct was at (or very close to) the are located. Under those circumstances, the applicant may ask the court or the arbitral
(1) his rights and (2) the evidence on which the ex parte order was made, so that be can
respondent has assets in the locations to be covered by the injunction, and that there is a fraudulent or dishonest end of the spectrum.” tribunal to order the respondent to disclose where these substantial assets are located.
consider whether he should consent or immediately apply for discharge, variation or
real risk that those would be dissipated.4’ The claimant has the onus4’ to raise objective This could be done by requesting the respondent to make affirmations within a specified
In the first instance, the court or the arbitral tribunal usually freezes the respondent’s 10.028 limitation of the order.64 In the same vein, the defendant should be given an opportunity
facts and solid evidence44 from which it may be inferred that the respondent is likely to period of time.
issets up to a sum level with the claimant’s prima facie justifiable claim.” On to contact his solicitor. If permission to enter is refused no force should be used®
move assets abroad or dissipnte them. Mere allegations or unsupported assertions would
occasions, the respondent’s assets may consist of a bank account which contains money The person executing an Anton Piller order is required to observe strictly the exact 10.035
not carry weight. A mere fear of removal or that the respondent is not forthcoming is
which arc clearly the respondent’s own as well as money to which the claimant lays a 5. Anton Piller Orders (Search Orders)59 toms of the order. In practice, the order is required to be served by a supervising
not good ground for application.4’ Such dissipation could mean a dissipation within the
proprietary claim. In these circumstances, the court or the arbitral tribunal may restrain solicitor under the standard form. It is suggested that the solicitor should be one who is
jurisdiction or removal from the jurisdiction altogether.
the respondent from removing or dealing with any of the monies in that account.*4 If (a) Purpose well acquainted with the operation of the order, since a solicitor who falls short of tbe
10.026 The claimant must be able to show that the respondent’s disposal of assets would be for the respondents’ property was in a bank account, the court or the arbitral tribunal may requirement may be held to be in contempt of court even if his conduct is neghgenL*
the purpose of defeating the claimant’s claim or is otherwise improper.46 The claimant grant a Mareva injunction against assets held by the third party.” 10.032 An Anton Piller order requires the respondent to permit certain persons to enter his
In light of the serious consequences, in Columbia Picture Industries Inc v Robinson
should show that the respondent’s act was not for normal and proper commercial premises to search for documents or other articles of moveable property and to take
On occasion, the respondent might dispute the ownership of assets that was subject to 10.029 Scott J gave a most useful five-point summary in relation to the proper approach for the
purposes, and that his act could be said to be unjustified.47 If the respondent can show them away and retain them for the time being. Such application is made invariably
the injunction. In Standard Chartered Securities Ltd v Lai Arthur* the court applied without notice and on an ex parte basis. The application is made by summons, with personnel executing the order:
that all that he can do is disposing of assets in the ordinary course of business, tlus
the following test: evidence tendered in the form of affidavit. A draft order should also be appended
would be insufficient to show that there is a risk of dissipation.4* Nonetheless, there is (1) Such order must be so drawn as to extend no further than the minimum extort
no requirement for an applicant for Mareva relief to show that the respondent intended with the summons. Skeleton arguments in support of the application should also be
(1) If the assets appear to belong to a third party, they should not be included in submitted.60 Whilst there are no strict rules and regulations for application before an necessary to achieve the purpose for which they are granted namely, tbe
to deal with his assets with the purpose of ensuring that any judgment or award would preservation of documents or articles which might otherwise be destroyed
the scope of the injunction without evidence that they belong to the defendant; arbitral tribunal, those practices in court should be encouraged.
not be met. The court or arbitral tribunal should be concerned with the effect of the or concealed. For example, an order cannot be justified if it allows tbe
(2) The mere assertion of the defendant that a third party owns the assets need not plaintiffs' solicitors to take and retain all relevant documentary’ material tod
be accepted without inquiry. The same principle applies to a claim by a third (b) Principles
correspondence. Once the plaintiffs’ solicitors have satisfied themselves oq
party to intervene to vary the injunction to exclude the assets; 10.033 The principles governing the granting of Anton Piller order essentially stem from the what material exists and have had an opportunity to take copies thereof, tbe
* NtnemsaUanHmeCorpvThsraSclUffahrtsGmbHA Co KG (The Hledenochsen) (1913) 1 WLR 1412. »dop»e«l i» HoN (3) The court must do its best to do what is just and convenient between all principles enunciated in American CyanamidCo vEthiconLtdThe court acknowledges material ought to be returned to its owner. The material need to be retained no
Koag ta Gntpo Pacific* htcoiponmla v Worldwide Mann* Product Ud (CACV 217/2013. (2016) HKEC 213). Tanfit that the Anton Piller order itself is a “powerful weapon” against fraud and dishonesty,
concerned; and more than a relatively short period of time for that purpose.
Rmmbow huematumal Inc r Shenzhen Wolvetin* 1M I* (HCA 3023/2016, (2017) HKEC 169). (39) and therefore should be used with care.61 From different lines of authorities, it could
* KazakhttmKagtcyPIceArip (2014) EWCA Civ 311.(25] (2) Second, a detailed record of the material taken should always be required to be
* The S’edertachsen (1913) 1 WLR 1412. Top Gains Minerals Macao Commercial Offshore UdeTL Resources P<* **
(20)0) 3 HKC44. Great Wall Past Asia Iniemanonal hnustmeni Co Ltd v Cervtra Holdings Ltd (HCCT 13/2016. [201«l " Groat Wall Pern Asia International Investment Co Ud e Centra Holdings Ltd (HCCT 13/2016, (2016) HKEC 1236), made before the material is removed from the respondent's premises. So fir as
HKEC 1236) •pplied in CSSC Huangpu Wenchong Shipbuilding CoLtdvDrv Bulk Senlces Ltd (HCMP 1626/2016, (2016) HKEC possible, disputes as to what material was taken ought to be avoided.
“ Thud CKnins Shipping Corp y Ummartne £4 (1979) QB 643. 2739)
“ AJimc* Fmcmce Ltd v P*ig Mul Loretta (1916) HKLR 323 * CSSCHucmgpu Wenchong Shipbuilding Co Ltd v Drr Bulk Semces Ltd (HCMP 1626/2016, (2016) HKEC 2739) * Ginmas* Peat Am anon (Belgium) NV v Hispcwrio Uraas A erras SA (1992) 1 Lloyd's Rtp 190.
- Laemihanf huemonenal Lints Co Ltd vArtis (2004) 2 AD ER (Comm) 797. * P017) 3 HKLRD 343 m ZUdrAZ[ 1912) QB 351. Booker McConnell Pic v Plascow (1915) RPC 423,411 (DiDoo LJ). Four Seat Industrial Co Ltd r Shorn Long MAwenu
- LG haemartonal Carp vj A JChemtroding Co Ud(HCA 2537/2001. (2009) HKEC 2). Hsin Chant Construction ^ Atf.(21H24) ** S*e Appendix I for a drift order of Anton Filler Oder „ **[1993) 2 HKC 706
Ltd r Henb-’e Lid (2005) 3 HKC 27 k Tit court tlould not geocndly freeze til uteti m the binds of the respondent' 1 LtdvA-Z (1912] QB 551 M See us detuli Practice Direction 112 Marrva Injunctions and Anton Filler Oden . 4*C(I9II)QB 956.
• Waadsid* Hospital Consulting Pr\ Ud v Stockton Nominees PnL/tf(Sup»*ni* Court of Victoria. II September 1^1) * ^Uf Constable ofKent v K(1913) QB 34 (Dcauag MR).
M (1975) AC 396 , 4«oh Piller KG r Mtunrfocturtng Processes L* (1976) Cl» 53.
- Mobil Cano Hegm Led e PeocJecs de Venezuela SA (2001) 2 All ER (Comm) 1034. Grand*** Industries ColV thsdounm Group Iniemanonal Inc v Azuti Ltd (2006) W7LR 239, (26) and (30). Aksst Holdings Ud v Ho Bing On u Lock Iniemanonal Pie v Bermek (1919) 1 WLR 1261. sppbed ta Hoog Kong in Tamco Electrical and Electronic* fl0* . Installations Ud r Integrated Computer Svsleuu A Cvbemeflcs Ltd [ 1919) I FSR 371
Lamx K*i (HCA 1617/2011. (2012) HKEC 1247). Greet Wall Pat Asia International Investment Co Ltd r Cent* Christopher (HCMP 171*. 1720 ad 1722/2009, (2009) HKEC 1315). Hut Chi Ming v Koon Wing Yee (2010) 4 HKC Kent) Ud v Stephen Ng Onm Fat (1994) 1 HKLR 171 (Godfrey J). |l»l7JCkJ».
HoJ+ngs Ltd (HCCT 13/2016. (2016) HKEC 1236). % M. (26)-(33) (Fok J. ts Fok PJ then w)
• Basrmm Cheuncedlsd v He\r» Chemical Co Ltd (No 2) P012J 3 HKLRD 307 H»3) 1 HKC 375. spplying SCF Fineutce Co Ltd v Main (1915) 1 WLR 176
 210 INTERIM MEASURES
SECURITY FOR COSTS 211
20* INTERIM MEASURES SECURITY FOR COSTS 209
(5) Despite section 35(2), sections 39 to 42 apply, if appropriate, to an order (c) General principles in granting security for costs
(3) Third, no material should be taken from the respondent’s premises by the 6. Security for Costs under subsection (lXd) «* if a reference to an interim measure in those
sections were an order under that subsection. Granting of security of costs, as can be seen from the use of the word umayr, is a matter 10.043
executing solicitors unless it is clearly covered by the terms of the order.
of discretion of the arbitral tribunal. In other words, the Arbitration Ordinance has
(a) Power of the arbitral tribunal to require claimant to give security for costs (6) Property is a relevant property for the purposes of subsection (1 Xd) if—
(4) Fourth, it is inappropriate that seized material, the ownership of which is in conferred a wide discretion on the arbitral tribunal. Arbitration Ordinance t.56<2)-56(4)
dispute, such os allegedly pirate tapes, should be retained by the plaintiffs’ Arbitration Ordinance s.56(l)(n) vests the arbitral tribunal with a power to require a 10. provides some guidance as to how the arbitral tribunal should exercise such discretion.
(a) the property is owned by or is in the possession of a party to the
solicitors pending the trial. Ihose responsible for the administration of justice claimant to give security for costs of the arbitration. This section provides the following )tt they cannot be treated as hard and fast rules or a straitjacket the arbitral tribunal
arbitral proceedings; and
might reasonably be expected to provide a neutral officer of the court charged guidance to the arbitral tribunal when asked to make such an order: must apply rigidly.14 Ibc arbitral tribunal has to conduct a fine balancing exercise so
with the custody of the material. (b) the property is the subject of the arbitral proceedings, or any question is not to be too oppressive to the claimant and, at the same time, to provide adequate
56. General powers exercisable by arbitral tribunal relating to the property has arisen in the arbitral proceedings. security to the respondent.7*
(5) Finally, the nature of Anion Filler orders requires that the affidavits in support
of applications for them ought to err on the side of excessive disclosure. In the (1) Unless otherwise agreed by the parties, when conducting arbitral (7) Unless otherwise agreed by the parties, an arbitral tribunal may, when In conducting the balancing exercise, the arbitral tribunal should not order security for 10.044
case of material fulling into the grey area of possible relevance, the judge, not proceedings, an arbitral tribunal may make an order— conducting nrbitral proceedings, decide whether and to what extent costs merely because the arbitral proceeding originates from a foreign claimant but
the plaintiff s' solicitors, should be the judge of relevance. it should itself take the initiative in ascertaining the facts and the law should only do so if it thinks it is just to make such order in light of the circumstances
(a) requiring a claimant to give security for tho costs of the arbitration;
relevant to those arbitral proceedings. of the case.7* In Wing Hing Provision, Wine & Spirits Trading Co Ltd v Hanjin Shipping
10.036 Where information is obtained under an Anton Filler order for the purpose of pursuing (b) directing the discovery ofdocuments or the delivery of interrogatories; Co Lid,71 Godfrey JA listed the followings for the court to consider when ordering a
(8) Unless otherwise ngreed by the parties, an arbitral tribunal may—
third parties, there is no implied undertaking that the information will be used solely for security for costs, which, after it is submitted, are also useful criteria which an arbitral
(c) directing evidence to be given by nffidnvit; or
tho purpose of the existing action. If the order does not contain such a restriction then (a) administer oaths to, or take the affirmations of, witnesses and parties; tnbunal should consider:
the court will normally, upon subsequent application, permit the use of the informatioa (d) in relation to any relevant property—
(b) examine witnesses and parties on oath or affirmation; or
for pursuing third parties and even to pursue criminal remedies.** (1) The tribunal has a complete discretion whether to order security, and accordingly
(i) directing the inspection, photographing, preservation, custody,
(c) direct the attendance before the arbitral tribunal of witnesses in order it will act in the light of all the relevant circumstances.
detention or sale of the relevant property by the arbitral tribunal,
(d) Discharge to give evidence or to produce documents or other evidence.
a parly to the arbitral proceedings or an expert; or (2) The possibility or probability that the claimant company will be deterred from
10.037 An Anion Filler order must be discharged without investigating its merits, if a materiil (9) A person is not required to produce in arbitral proceedings any document pursuing its claim by an order for security is not without more a sufficient
(ii) directing snmples to be taken from, observations to be mode of,
matter is omitted, on the ground of lack of full and frank disclosure.** A party dissatisfied or other evidence that Uic person could not be required to produce in civil reason for not ordering security.
or experiments to be conducted on the relevant property.
with an order made ex parte must apply under Rules of the High Court (Cap.4A, Sub. proceedings before a court.
(3) The arbitral tribunal must carry out a balancing exercise. On the one hand, it
Leg.) 0.32 r.6 to have it set aside by the court mnking the order. In fact, in Columbia (2) An arbitral tribunal must not make an order under subsection (lXa) only
10.040 It should be noted thnt unlike other interim remedies, the order for security for costs is must weigh the injustice to the plaintiff if prevented from pursuing a proper
Picture Industries Inc v Robinson,** it has been recognised that the liberty to apply to on the ground that the claimant is—
one that is expressly vested in the hands of the arbitral tribunal, and the court does not claim by an order for security. Against that, it must weigh the injustice to the
have it discharged is often of little, if any, value to the respondent: have a power to do the same.
(a) a natural person who is ordinarily resident outside Hong Kong; defendant if no security is ordered and the defendant finds himself unable to
recover costs from the plaintiff in due course.
“...In relation to any Anton Filler order, the liberty to apply to have it discharged (b) a body corporate— (b) Purpose
is of little, if any, value to the respondent. He does not know the order has been (4) In considering all the circumstances, the arbitral will have to regard to the
(i) incorporated imdcr the law of a place outside Hong Kong; or 10.041 Security for costs is a protection offered to a respondent to recover costs arising from the
made until it hns been served upon him. At the same time as the order is served, the merits in detail unless it can clearly be demonstrated that there is a high degree
respondent comes under an immediate obligation to consent to the entry onto and (ii) the central management and control of which is exercised arbitral proceeding if he is able to successfully resist a claim initiated by the claimant of probability of success or failure.
search of his premises and the removal of material from his premises specified by outside Hong Kong; or Ihc rationale behind is to avoid a respondent being dragged into an unmeritorious
arbitral proceeding by a claimant and suffer loss in resisting such claim. As this is a (5) The arbitral tribunal may order any amount up to the full amount claimed by
the order. If he does not consent, he is at risk of committal to prison for contempt
(c) an association— measure to protect the respondent, it should be noted that security for costs cannot be way of security, provided that it is more than simply a nominal sum; it is not
of court. This is so even if the reason for his refusal to consent is his intention to
required from a respondent who is exercising his right to defend himself against an bound to order a substantial amount.
apply to hove the order discharged.’’ (i) formed under the law of a place outside Hong Kong; or
attack, even if the respondent is a resident out of the jurisdiction.” (6) Before refusing to order security on the ground that it would unfairly stifle a
(ii) the central management and control of which is exercised
10.038 Hence, it is recommended that any application for discharge should be made as soon 10.042 When an arbitral tribunal orders security for costs to be given, it shall fix the amount and valid claim, the arbitral tribunal must be satisfied that, in all the circumstances,
outside Hong Kong.
as practicable, so thnt the application would not be rendered meaningless. In the event direct the inode in which, and the time within which, such security shall be given. There it is probable that the claim would be stifled. There may be cases where this
that the application fails, the defendant may be liable for contempt of court and if the (3) An arbitral tribunal— would also be an order that the arbitral proceeding shall be stayed until such security
order has been breached in the interval (eg, by destroying records), the consequences is given. Ibc arbitral proceeding could even be dismissed if the order for security (ot
(a) must, when making an order under subsection (lXa). specify the
will be extremely grave.” costs is not satisfied.” Vy analogy. Lamia v Le Satan Onenl (Hong Kong) Ltd(1996) 2 UKLR 37. Andersen v Hntmrg Krnwtg IW [1997]
period within which the order has to be complied with; and
HKLRD 1360. Re Grtallr Beijing Region Krpmswavt Ltd (2000) 2 HKLRD 776. Sm alto 4n»m SRA * Wonstmtd
, <**nen Ltd (1971) 1 WLR 144J. Cot> Navigation Ca r Moktl Stopping Co (The Alpha) (1991) 2 LJoytf'* Rtf 52
(b) may extend that period or an extended period.
, el TWnwa Rnhhe v Hong Kong Chinese Insurance Co Ltd (1993) I HXC 617.
” Naamloa:e I trtnootschap Bt leggings Compagnie (Jrtmus v Bank of England (1941) 1 All ER 465 tarnla >• Le Salon Orient (Hong Kong) Ltd (1996) 2 HKLR 37. Re Greater Beijing Region Bxprmssnqta Ltd (2000)
(4) An arbitral tribunal may make an award dismissing a claim or stay a ” Sienhase Inieinanonal Group (China) Ltd v llncor Gnrnp of Comptmw (hnmtmenl) Ltd (FAMV 21/2004. |N°,I „ J HKLRD 776
• Sam Cmp * Atmet (1911) FSR 391. Rohens « Kmrwoar /a# (1911) FSR 52 7.
claim if it has made an order under subsection (1X«) but the order has not HKEC2M) 11991) 4 HKC 461,464A-F.
• mjr*AaJ'rS.a«fMAimiW(;i«u£W|l»ll)FSR2l9
• |i*it)as«.?tR-o been complied with within the period specified under subsection (3Xa) or
• rE4R«T^atW»lt»MH»(Xw/^tirf(l9*5) 1 WLR721. extended under subsection (3Xb).
 214 INTERIM MEASURES
212 INTERIM MEASURES SECURITY FOR COSTS 213
(2) All the circumstances relating to the manner in which the company carries Q Chapter 11
can properly be inferred without direct evidence. The arbitral tribunal should dun not, that funds are available from any source to provide or support any order for its business should be taken into account, though the weight to be applied 0
consider not only whether the claimant company can provide security out of ibe security.**4 Nonetheless, it would not be possible for a financially able but unwilling each factor will obviously differ from case to case
Us own resources to continue the litigation but also whether it can raise the claimant to argue that he is stifled by an order for security for costs.” THE AWARD, COSTS AND INTEREST
(3) In applying the test to a non-trading company it may be more important than
amount needed from its directors, shareholders or other backers or interested D should be noted that the insolvency or poverty of a claimant is no ground for requiring 10.050 would otherwise be the case to have regard to the nature of the company'i
parties. ft is for the claimant to satisfy the arbitral tribunal that it would be him to give security for costs.** The fact that a company is in liquidation is nonetheless corporate activity.91
prevented by an order for security from continuing the litigation.7* primafacie evidence that it is unable to pay the costs, unless evidence to the contrary is
pven." The application for security must, nonetheless, still be supported by an affidavit 10.054 Thus, if, after all things considered, all factors relevant to the application are finely 1. Introduction....................................................................... 11.001
10.045 It is the respondent's onus to satisfy the arbitral tribunal that the claimant would not
in which credible evidence can be shown that Ihe claimant company would be unable to balanced, the arbitral tribunal will find that the applicant for security for costs has failed 1 Types of Award............................. ............. .................... ............................................... 11-003
(and not only may not) be able to meet an order for costs. The arbitral tribunal would
pay the costs of the successful respondent.90 If the claimant’s company is able to show to satisfy the legal burden of proof and dismiss the application for security for costs.*
consider the financial situation of the claimant at the time when the application was (*) Partial/interim award............................ ............ .....................................................11-004
that be will have sufficient funds to keep at hand to meet the likely amount of any order Yet, once the respondent has produced primafacie evidence that a claimant’s operation
made.w The respondent should point to the arbitral tribunal surrounding circumstances (b) Agreed award.......................................................... ................................................. 11.005
for costs, the arbitral tribunal should not order security for costs even though it is in and management is outside Hong Kong, the evidential burden shifts to the claimant to
which shows a genuine and reasonable belief that the claimant would be unable to p*y liquidation.91 rebut such evidence.” 3. Form of an Award .............................................. .....................................................11.007
costs of the respondent
10.055 It should be noted that despite residing abroad, a claimant would not be required to (*) In writing................................................... —----- ------------------------------------- 11.003
(iU) Claimant residing aboard
(I) Merits of the claimant's case give security if he has substantial property within the local jurisdiction.9* The arbitral (b) Signature of the arbitrators.................................... ............................................... 11.009
Arbitration Ordinance s.56(2) provides that an arbitral tribunal must not make an order 10.051 tribunal should nonetheless consider whether those assets are sufficiently fixed and of (c) Date of award............................................„..... ......................................................11.013
10.046 As noted hereinabove, an order for security for costs is to offer protection to a
for security for costs only on the ground that the claimant is a resident outside of Hong a permanent character, so as to render a proper security to the respondent In Smart
respondent Thus, when an arbitral tribunal considers whether to grant such an order, (d) Place of the award............................................................. 11.014
Kong. This provision avoids deterring foreign parties from arbitrating in Hong Kong. Trike MNF Pie Ltd v Chiu Sui ChunMaster Michael Wong found that a plaintiff's
the likelihood of the plaintiff succeeding in the arbitral proceeding would be a major (e) Tune limit of rendering an award....................................................................... 11.016
Yet, this does not mean the arbitral tribunal cannot take into such fact as one ofthe many interest as lender and mortgagee in mortgaged properties will not satisfy the burden of
matter for consideration. In the case where the claimant’s case is genuine and strong,
factors when considering an application for security for costs. showing that there are substantial assets in the jurisdiction as an enforcement can only 4. Substantial Requirement of an Award............................... 11.018
the arbitral would likely refuse an application for security for costs.*1
The whole purpose of ordering security for costs is that the claimant, by the fact that 10.052 occur in the event that a borrower defaults in repaying the loan. In Lin Man Yuan v Kin (*) In accordance with law.................................................. 11.018
10.047 On the other hand, if the claimant’! case is not strong, then the arbitral tribunal would Ming Holdings International Ltd,'00 Deputy Judge Leung found that a cash deposit in
be resides overseas, has a real possibility of being unable to satisfy subsequent cost (b) With reasons......................................................... 11.020
likely grant an order for security of costs.11 In doing so, the arbitral tribunal may alw Hong Kong bank would not suffice as assets of a fixed and permanent nature, due to the
order if he eventually failed in the course of action. It would therefore be up to the (c) Completion............................. 11.024
take into account the defence that the respondent is tendering to consider whether ease in operating the account as and when the account holder desires.
respondent to satisfy the arbitral tribunal that the claimant is “ordinarily resident” out (d) Certainty.................................................. 11.034
there is any real arguable defence. Nonetheless, the arbitral tribunal should not, whilst
of the jurisdiction. This is a question of fact and degree.92
considering this application, embark upon a detailed consideration and assessment of 5. Costs 11.035
evidence” or a “preliminary run” of the case.*4 la arbitration, the claimant involved would frequently be a company. The residency of 10.053
(a) General principles...................................................................... 11.035
* company depends on the location of its central management and control. In Charier
(b) Fees and expenses of the arbitral tribunal................. ....................................... 11.044
(ii) Financial resources of the claimant W«v Holdings (BVI) Ltd v Corona Investments Lid,n Keith J summarised three
principal considerations94 that an arbitral tribunal should consider when considering the (c) Common cost orders.................................................................................. 1104S
10048 The arbitral tribunal would have to take into account financial resources available to the
claimant. The arbitral tribunal should frown upon an application for security of costs as residency of a company: (i) Costs to the succeeding party to be paid forthwith----- ------------------ 11.049
a tactic to suppress the other party or stifle a genuine claim by the claimant.” (ii) Costs to the succeeding party in any event.................... 11.050
(1) A mere assertion as to where a company’s central management and control are (iii) Costs to the succeeding party in the cause........................... 11.051
10.049 The claimant, when resisting an application for security of costs, should be candid to
located is unsatisfactory. Evidence is required.
the arbitral tribunal as to his financial resources and show that it is at least more likely. (iv) Costs in the cause................................................. 11.052
(v) Costs reserved..................................................................... 11.053
* Long Ho! Hong r Chm Tit Lydia (HCMP 3179/2013. (2016) HKEC 1731) (vi) No order as to costs............................................................................ 11.054
n imdtnSir UndtavPork,mm & CoUdv TripUm L411973) QB 609. 626-627, And,nr* v Hamg Kumg
HKUDIM0 " ChUtacan Education Corp » Chm Tu Ngon (HCA 1062/2012. [2015] HKEC 2162) (d) The effect of sealed offer to costs.......................................................... ............ 11.055
• B>md Farrar Brnboum LLP uSomutl Rumbaum Diamond Ud (No 2) (2001] I HKLRD600.SNE Ertgln,*r1ngC*L^ * Cow,ll y Tailor ii 115) 31 Cb D 34. Shod,, y Dtnnon (1116) 16 QBD 541 (jAdntiB in possible or probsWy bankruptcy).
w Ooo Km Machinery CeUdQkCA 2025/2012. (201JJ liKEC 1577). ft, UnUofi Group (No 2) (1993) BCLC 532 Dartmouth Harbour CommUrlotttrt y Mayor of Dartmouth (1116) 55 LJQB 413 (l corporation being insolvent is no
(e) Taxation and assessment of costs........................................................... 11.059
- Stomo, Indnioud Ltd r Cmnmdry Co Ud(HCA 20)1/2012. (2014) HKEC191) __ pound for requiring security). Ng Tat Or! vMaz Short Ud (1996) 4 HKC 2M (plaintiff an undischarged bankrupt). (f) Basis for assessment of costs............................................... 11.062
* Wtmf Km+k Met Semens ¥ gpfnemte he (1997) 7 HKC 67, R* Cjrwalir Beijing Region Fiptwinemi U4 ■ honhamyion Cool. Iron A Waggon Co vMidland Waggon Co (Mil) 7 Cb D 500.
2 KKULD 776, Wtog hat CmumclHm Co lid ¥ bmrfu Holding! tm,motional Ud OKA 1)0/200), (2005) HKEC *** * Donggum Horn, Plastic Product, Co Lid r Chm Dal Chung (HCA 219/1999. (2001) HKEC 1251) (i) Party-and-party basis................................................................ 11.063
** Se« alto Wimtrr Imttlmml Inc v SoulhtmMari Lid(DCCJ 4761/2001. (2001) HKEC 1196).
U" 1.0,1 Chm Kang Hoang , P,i,rUiMo (HCA 2110005, (2006) HKIC 1151) Uiromonev Ud v Chm. Lai. Fmg A Co (1990) 2 HKLR 261, R, Grand Pacific Hoi,I Ud (2004) I HKLRD 1015. * Hid Yin Stuig v 7ioi Ping K*rm (2012) 2 HKLRD 1015. (ii) Common fund basis.................................................................. .................... 11.064
« nano '.atari Prvptrtln lid r Monton HoldingI ltd fHCA 1 )9| )/| 997, |2002J HKEC 449). A, Silver T"h gldVF** , H*PPy Jackin Toiol Fnlfilmmi Sana UdQKCN 621/2006. (2007) HKEC 1564) " Smart Tnk, MNF Pie Ud v Chiu Sul Chun (HCA 14 7/2013. (2015) HKEC 556).
iJdtiSCCW 111/2004. (2005) HKEC444) Lrmt, v Commluiairti ofInland Reymtu, (1921) AC 217. Commiulmtn ofInlaid Revenue vLytagfil (1921) AC 234 " Redondo v Chaylor (1179)4 QBD 453.457. Hamburga- vPoMting (1112) 47 LT 249. Clark, v Barter (1190) 6TLR 254 (iii) Indemnity basis............................................................................. 11.065
■ Wm Stan Cmww/Im Co Lid r FUuofO Finant, Co Ud (HCA 2051/2004, 12007) HKEC 24)1). Wo Tmg * Saa alio R v Bomrt Ijmdm Borough Council, ,ip Shah (1913) 2 AC 309, R, Grtairr Brtjlng Region Etpreuuavs Ud Rnjfem r Redfm, (1191) P M.R, Apothnart, Coi Trod*Mark, (1191) 1 Cb l. Socket v Busier A Co(1**7)4TLR (g) Adverse cost order for failure to mediate................................ ......................... 11.067
latmonomal [MY,topm*u iJdmcnN 101/2015, (2015J HKEC \W).L*tll, Fay Coin, r Ch„r1o Lid\i990] I HKC % tf000) 2 HKLJtD 776. " (HCA 147/2013, (2015) HKEC 556*
461 Monm Top MmogmmH Ltd y Charm Gm,ral Holding, Ud (DCCJ 16001/2000. (2001) HKEC 11)1). <r**- 1*99*1 * HKLRD 469 Sc* also Jod, Harbour Ud v Ellon,, Profit, Ud (2005) 2 HKLRD 13*. R, Chart,r Mnc "* (HCA 216/2001. (2013) HKEC 1901).
SmartRnpern,, tJd*Mm,m Holding, LutQKA 1)911/1997, J2002J HKEC 449) Dntlopmml Ud (HCCW 45/2006. (2007) HKEC 1057), AA Chm (Ana Pacific) Coruullml, Ud v Khoo EE Liam
- ‘tanhm, int,motional (,rmtp (f Irina) lid ¥ Untot Group of C om,xmlt, f/mitimrnl) Ud (2004) I HKLRD 731 „ (HCA 4)54/2003. 2 June 2011), Siaimim InitmationalUd v Uu Boo,him (HCA 162/2010, (2010) HKEC 1671)
" Clam Kor Chi Foul r Super Ion, lnv*,mi,m Ud | 1994J 2 HKC 679 As observed by Lindsay J in R, Uni, Ohm,ran Each Wait Ud (1995) 1 WLR 560
 21* Tint AWARD, MUM ANII INTf.ltWri

(a) I'arlial/intrrirn award 67. Article 31 of UNCIT RAL Model Isrw (Fores aad coatnU •fewer*
6. Interest ......................... fifiiifimiiiffiiixiuififiifiiOMii eoeeeiiennnsi • tii 11.07) For alt manner ojImpost, whether II he for ox, for ait, for sheep, for raiment, 11.004 The arbitral tribunal may decide to dispute only some of the issues in the arbitration (I) Article 31 of the UNCITRAL Model Lew, (be text of wtedi ts set amt
(a) Oencral principle* or for any manner of lost ihlng, which another challengllh to he hit, the whilst leaving other part* of the dispute to be determined in subsequent award*
tiiniiiiiiiiitiitiiiiiiitfiiiiiiiiiiiiiititittiniiiiiitiiiiimmiiiiti 11.07) below, has effect—
cause of both parties shall come before theJudges; and whom theJudges shall These award* arc sometimes called "partial award" or “interim award". These award*
(b) Ihe applicable rale 11.076
condemn, he shall pay double unto his neighbour (Exodus 22: V) sometime* deal with the jurisdiction of the arbitral tribunal, interim measures or with “Article 31. Form and contents of award
7 ( mreel urn of the Award....................... 11079 any preliminary matter* that the arbitral tribunal consider to be conveniently dealt with (1) The award shall be made in writing and shall be signed by Ibe
(a) The concept of fundus officio and exception* lo il 11.079 separately from the main issue In dispute, arbitrator or arbitrators. In arbitral proceedings with more than
(b) Correction of the award......... ................. .................. II .01) 1. Introduction one arbitrator, the signature of the majority of all members of
(b) Agreed award the arbitral tribunal shall suffice, provided that (he reason for any
An award i« the final determination by the arbitral tribunal on a particular iaauc or a claim 11.001 omitted signature is stated.
11.005 If parties decide to settle amongst themselves prior to the handing down of the final
in the arbitration Upon the iaiuance of the final award, the arbitral tribunal become*
functus officio and the arbitral proceeding come* lo an end.' Moreover, an award create*
award, the parties may opt to agree on a settlement and request the arbitral tribunal to (2) ...
issue an agreed award. This award technically is made by the parties themselves and is
a res Judicata und an italic ettoppcl unle«* and until there ia a *ucce*»ful challenge of (3) The award shall state its date and the place of arbitration as
issued by consent. Under UNCITRAL Model Law art.30;*
the award,1 Despite the importance of an award, the UNCITRAL Model Law and the determined in accordance with article 20(1). Tbe award shall be
Arbitration Ordinance (Cap.609) do not givo any «tatutory or final definition of what deemed to have been made at that place.
66, Article 30 of UNCITRAL Model Law (Settlement)
mount* to an award,1
(4) After the award is made, a copy signed by tbe arbitrators in
(1) Article 30 of the UNCITRAL Model Law, the text of which is set out
An award doc* not only deal with the merit* of a cate but alao ancillary matter* that 11.002 accordance with paragraph (I) of this article shall be delivered to
below, has effect—
are eiiential to mark the completion of the whole arbitral proceeding*. In thi* regard, each party".
(he coflt* of the arbitration, both legal co»t* and the tribunal'* co*t«, have an Important "Article 30 Settlement
role to play. 'Ihi* chapter flrat review* the formalitle* and tubttanlial requirement* of an (a) In writing
(1) If, during arbitral proceedings, the parlies settle the dispute, Ibe
■ward. It then turn* lo conilder the power of the arbitral tribunal In ordering co«ts and arbitral tribunal shall terminate the proceedings and, if requested UNCITRAL Model Law art.31(1) stipulates that an award must be in writing. The haw
inferett at the end of the arbitral hearing. Finally, it con*ider* the remedie* open to an by the parties and not objected to by the arbitral tribunal, record specification expressly ruled out the possibility of a parol award (ie, an oral delivery of
arbitral tribunal after the handing down of the award, the settlement in the form of an arbitral award on agreed terms. Ihe award), which was allowed in ancient England.10
(2) An award on agreed terms shall be made in accordance with the
(b) Signature of tbe arbitrators
2. Tvpes op Award provisions of article 31 and shall state that it is an award. Such afl
award has the same status and effect as any other award on tbe Where the matter is determined by a single arbitrator, the decision of the tingle arbitrator I14*
Ai mentioned hereinabove, there wa* no apcciflc definition a* to what amount* to 11.003 merits of the case." would be the award of the arbitral tribunal. The single arbitrator should ihr». pursuant
*n award. Safe to be *aid i* that the court would not merely look at the label of the to UNCITRAL Model Law art.31(1), sign the award.
(2) If, in case olher than that referred to in article 30 of the UNCITRAL Model
document to decide on whether it amount* to an award,4 Rather, what the court focuse*
Law, given effect to by subsection (1), the parties to an arbitration agreement Where the arbitral tribunal is constituted of more than one arbitrator, the decision of I1-01C
on i* the *ub*tance of the document.’ Typically, a procedural order, a direction or an settle their dispute and enter into an agreement in writing containing the arbitral tribunal would be rendered by the majority of the members of tbe arbitral
Interlocutory award may not be considered a* an award * Despite *uch a distinction, a
terms of settlement (settlement agreement), llie settlement agreement i*. tribunal." UNCITRAL Model Law art.31(1) also stipulates that the award is to be
procedural order or a direction would be enforceable In the same manner as an order or rigned by the majority of arbitrators. In those circumstances, a dissenting arbitrator
for the purposes of its enforcement, to be treated as an arbitral award.
direction of the court with the leave of the Court of First Instance.’
*ould not need to sign the award.11
11.006 Despite Ihe fact that an agreed award is one which is rendered by consent, it enjoys the
same status and effect as any other award issued by the arbitral tribunal after hearing fliere have been different schools of thoughts as to whether a dissenting arbitrator 11411
submissions and evidence by the parlies. An agreed award is enforceable in the same •bould give his opinion. On the one hand, this is of interest to justice as the parties would
way as if the award is made by tribunal on merits. koow the reason(s) as to why the arbitrator disagreed with his fellow colleagues. On the
UNCflUAL Modd I twad >2(1), In AiWtoilioa Ordinmco I 61. ^cr hand, this might involve a risk in tempting the unsuccessful party to set aside or
' it/uaiotlal Timlin lid v I ouli thnfui Trading lid (2002) 2 Uoyd'i Rap 6)1, ton County Countll v Bromlot
enforcement of the award. The court has repeatedly said that when considering
hrytUng l td (2007) l)U 2)1. Shill Bgtjti Win Mmr.ala (imhtt v Dana Uni Kgn* Ud (2010) 2 All HR (Coma) 442
Uo olio Nnuoll on Aiblirtinoti (tiwoot A M««v*ll 24 Hi tA . 201)) pari 6 002,
3. Form of an Award Aether to give a dissenting opinion at the end of the award, the dissenting arbitrator
1 hi mm MU* Notional Iranian Junior Co (Tin hadt tunnudo) (1992) I Uoyd’i Hap 1 69, Caiglll Sri. v P Kadliwyoiiloi ^°uld consider carefully whether there is a good reason for doing so.11
*4 (1002) I Uoyd'i Rap I, in Mnhaol Wllion it fttnnon Ltd *> Batman (2000) I Uoyd'i R^> J62, <ha couii 11.007 UNCITRAL Model Law art.31* prescribed that all arbitral tribunal should render tbe
kdd dm dm might l<« mm of d>« fiucni to ho trim into umuimmoa
Ituoipotaiod Ormon o) 7ai Tat Building v hung You Building I id (200)) | ItKC 5)0, 53), Mlrhatl Wllion A I'wlniii
arbitral award in the following form: *•«. for eumpia. Corfa r MotcloftoUt (\V>\) 2 Dyar 211. 73 ER 41). Bawling r Wood (HU) Inn 34. 94 ER *0).
LtdvBmmon (2000) I Uoyd'i Rap 162 , Kowpion rMlllor(]S62) J5WR )5)
Thrto 111llni Wa/or ComaUllio v Blmlo A F'atinon (IW0) 52 Ill.R 42, I'ublhli CotnmimlcaBoni v Tmo Noith , UMCTTRAL Modal law hi .29. aotraodiad la Aihtlntitm Oiduunca • 65
( Communication! Inc 2061 )d 725 (7ih Cll 2000) ' Wl In A/Woioon Ouhnonco i M , (artU Iniotnailtmal SA Antigua v Soclodod Iboriea do Molturotlon SA (1991) I Uoyd'i Rap 419
Aftatiitloo IJuknoiu.4161 9 retrenched to A/httrsdoo OrdtAaoco » 67 F » MUd (2009) 2 All ER (Cow.) 519. (6). B rA (ArbUnalon Choion Law) (2010) 2 Uoyd'i Rap ill. (30)
 222 THE AW ARD, COSTS AND INTEREST
SUBSTANTIAL REQUIREMENT OF AN AWARD 223
22* THE AWARD, COSTS AND INTEREST SUBSTANTIAL REQUIREMENT OF AN AWARD 221
II.022 In Zermalt Holdings SA v Hu-Life Upholstery Repairs Ltd,23 Bingham JJ4 emphasised (c) Completion
11.012 When signing the award, there is no requirement that each arbitrator must sign the his delayed in rendering an award. In dismissing the challenge, Flaux J” expressly that it would not be appropriate for the court to assess the quality of the reasoning of the
award at the presence of the others.14 There is also no requirement that the award must indicated that delay in publishing an award per se is not something objectionable as, arbitral tribunal when a party attempts to set aside the award. His Lordship famously The award should be a complete decision in deciding all the matters referred to the 1U2*
be signed at the seat of the arbitration. Any award would be treated as having been without more, the delay will not have caused either party serious injustice. Nonetheless, held that: arbitral tribunal. An arbitral tribunal is not entitled to reserve a matter to himself and not
made at the seat of the arbitration even if it was signed elsewhere.’1 the court indicated that if delay is caused because of pressure of work, there w ould be make any ruling thereof.10 The ruling must also be a final ruling instead of a preliminary
do excuse for that. The remedy for that would be to, as Flaux J put it, “take on fewer
or tentative view.11
“the courts strive to uphold arbitration awards. They do not approach them with
(c) Date of award appointments to ensure that awards can be produced within a reasonable time of the a meticulous legal eye endeavouring to pick holes, inconsistencies and faults in In Petrochemical Industries Co (KSC) v Dow Chemical Co,a the English High Court 11-02!
conclusion of the hearing”. awards and with the objective of upsetting or frustrating the process of arbitration. marked a distinction between “issues”, on the one hand, and on the other hand, what
11.013 UNCITRAL Model Law art.31(3) stipulates that the award must be dated. The reason
Far from it. The approach is to read an arbitration award in a reasonable and *re variously referred to as “arguments” advanced or “points" made by parties to an
why the date of the award is important is twofold. First, the date of the award would
commercial way, expecting, as is usually the case, that there will be no substantial abitration or “lines of reasoning” or “steps” in an argument.11 Such distinction is borne
be of essence in determining whether the contractual requirement for the time limit in 4. Substantial Requirement of an Award fault that can be found with it.” out of the concern to maintain a "high threshold” required for establishing a serious
rendering the arbitral award has been satisfied by the arbitral tribunal. Second, the date
irregularity in an application to set aside an arbitral award.14
of the award triggers the countdown when an award should he set aside. (a) In accordance with law 11.023 In UMS Holding Ltd v Great Station Properties SA,23 the court was faced with a
Without propounding an all-embracing definition of “issue", Andrew Smith J recognised 11.024
The UNCITRAL Model Law, entrenched in the Arbitration Ordinance, is to be decided 11.018 challenge where Sir David Steel and Sir Gordon Langley, both former judges of the
(d) Place of the award the impossibility of defining the term.15 Instead, the learned judge rejected the following
in accordance with the rules and laws that are chosen by the parties insofar as it is English Commercial and Admiralty Court, sat, inter alia, on the arbitral tribunal. In
formulations:16
11.014 LfNCITRAL Model Law art.31(3) stipulates that the award must state the seat of the applicable to the substance of the dispute.’* In cases where the parties do not have any challenging the award, the arbitration respondent argued that the court should use
arbitration. The scat of the arbitration will affect which division under Arbitration designation of the law, the arbitral tribunal should determine the law applicable by the a higher standard to scrutinise the award when the tribunal chosen by the parties
(1) An issue “should normally be obvious” if it is considered whether what has not
Ordinance Part 10 would apply for recognition and enforcement of awards. Part 10 rales of conflict of laws.” consisted of former Commercial Court judges and a distinguished lawyer. Teare J had
been dealt with by a tribunal is “capable of being formulated as an essential
covers the following types of awards: the following observation:
Under certain circumstances, the parties in dispute might agree to submit the dispute 11.019 issue of thc nature of what would be included in an agreed list of issues being
to the arbitral tribunal and decide strictly on the basis of fairness, reasonableness and prepared for the purpose of a case management conference". This is not helpful
(1) Convention awards. Awards made in states or territories which are party to the "[36] I accept that when reading and understanding an award it is appropriate
equity without strict adherence to legal and contractual rules. This has been defined as there is no standard or recognised criterion for their formulation.
New York Convention (other than China) would be governed by Division 2 of to have in mind the type of tribunal which wrote thc award. However,
Part 10. loosely under UNCITRAL Model Law art.28 as ex aequo et bono and amiable
the approach of the courts, reflecting the intention of Parliament ... is to (2) It is said that the lists of issues submitted by the parties cast light on the “issues".
compositeur. The arbitral tribunal, nevertheless, is not allowed to depart from legal support the resolution of disputes by arbitration and not to intervene in
(2) Mainland awards. Awards made in China (except Hong Kong, Macao and This is, however, undesirable as parties would be able to modify the application
«nd contractual rules and decide the dispute as such without the express authorisation arbitration except as provided in the [Arbitration Act 1996]. That is wby of the mandatory statutory provisions by their own formulation of issues.
Taiwan) would be governed by Division 3 of Part 10. of the parties.20
the courts strive, as Bingham J [in ZermaltM] put it... to uphold arbitration
(3) Macao awards. Awards made in Macao would be governed by Division 4 of awards. Section 1 of the Arbitration Act applies to all arbitration awards A tribunal does not fail to deal with issues even if it did not answer every question that 11.02*
Part 10. (b) With reasons and so, in my judgment, the approach described by Bingham J must apply qualified as an "issue”. It could deal with an issue by making clear that it did not arise
UNCITRAL Model Law art.31(2)1' expressly hold that an award handed down by the 11.020 to all arbitration awards, whoever thc arbitrators might be. I therefore in view of its decisions on the facts or its legal conclusions. A tribunal could also deal
(4) Arbitral awards that are not Convention awards. Mainland awards or Macao
•rbilral tribunal shall state the reasons upon which it is based unless the parties have consider that all arbitration awards should be read in a reasonable and *ith an issue by deciding a logically anterior point that the issue did not arise. It was not
awards. These awards would be governed by Division 1 of Part 10.
agreed that no reasons are to be given or the award is an agreed award rendered by commercial way, expecting that no substantial fault will be found with them. required to deal with each issue seriatim, but instead in a composite disposal of them_rT
**y of settlement. The parties, particularly the losing one, are entitled, as a matter of Consistently with this conclusion the approach of Bingham J. in Zermalt
11.015 The seat of the award is also important as it allows parlies to know to which jurisdiction
kiniess and justice, to know the reasons underlying the arbitral tribunal’s decision, has been applied to awards of ‘three professional lawyer arbitrators’ (see
they should go to when they intend to set aside the award.
“nless they agreed that reasons be dispensed with. ABB AG v HochtiefAirport GmbH27), to an award of a retired law lord and
4 Wv Holdings Ltd v JSC Ztstafoni G Hikoladzm Fenvaflov Plant [2004] 1 CLC 1168. Secretary ofState far Deforce e
two experienced international arbitrators (see Fidelity Management SA v turner Estate Solutions Ltd [2014] EWHC 244 (TCC), (79). Konkala Copper Mines Pic vUA M Mmtwg ZamMe Ltd
(e) Time limit of rendering an award A reasoned award is one in which the tribunal sets out the reasons for its decision. These 11.021
Myriad International Holdings BVn) and to an award of a retired law lord, 12014] 2 Uoyd'i Rep 649.
11.016 The Arbitration Ordinance does not stipulate any time limit to the arbitral tribunal for reasons are contained in a separate document to avoid leaking sensitive and confidential a retired US Judge and a leading international arbitrator (see Petrochemical Hanrlc* J Bushell A Cor Born [2013] EWHC 7 (CL). (14). [32]. Moots r Muston Events Ltd [2016] I All ER {Comm)
rendering an award. Nonetheless, it is an overriding duty that the arbitral tribunal should business information in the reasons. As long as that separate document attached to , »MI5]
Industries Co (KSC) v Dow Chemical Co”).” 12012] 2 Uoyd'i Rep 691, affirmed recently m UMS Holding Ltd v Great Station Properties SA (2018] 1 AH ER (Comml
•be award states that it forms part of the award, the award would be considered as a
act in a conscientious manner and not unduly drag on in writing up the award. However, *36, vAere the relevant pnnapiea ire presented in i more elaborated manner at [21] Orascom TMThwesrmeues £4ML e
it is common for parties to stipulate a specified time for the arbitral tribunal to render “reasoned award” u , ltd (2018) EWHC 985 (Coma) applied.
an award when engaging arbitrators. Whenever it is impossible to comply with such Hutswuem (Europe) Ltd v At Ametn Development A Trade Co [2000] CLC 1243. 1260-1261. BulfracM fCi-prm)
v Bonesn Shipping Co Ltd (The Pemphtlos) [2002] 2 Uoyd'a Rep 6*1. 686. Se« alao Primero Marvtme (Hdtm*)
time limit, the arbitral tribunal should seek parties’ agreement for an extension of time * Jiangsu Eastern Hta>y Industry Co Ltd [2014] I All ER (Comm) *13. (7), Secretary tf State far dte Dome
u [1985] 2 EGLR 14. , Memory v Raytheon Svstems Ltd [2014] EWHC 4375 (TCC).
11.017 In BV Scheepywerf Damen Gorinchem v The Marine Institutethe court had the A* FIlux U then wna, at (I) M A* Lord Bingham then waa lesotho Highlands Development Authority r Impregilo SpA [2006] 1 AC 221. 244. ABB AG e HoehnefAtrperr GmbH
opportunity to deal with a challenge of arbitral award on the basis that the arbitral tribunal UNCITRAL Model Lxw art 21(1), entrenched in Arbitration Ordinance i 64. » [2011] 1 AUER (Comm) *56 , 12006] 1 All ER (Comm) 529. [63],
^*4, art. 21(2) » 11983) 2 EGLR 14 „ Maurgement SA v Myriad International Holdings BV (2005) 2 All ER (Comm) 312. [10] applied
" [2006] I All ER (Comm) 529.(1] and [64] „ Petrochemical Industries Co (KSC) v Don Chemical Co (2012) 2 Uoyd'a Rep 691, (|7>-(1*)
^.•n 2RJ) ” (2005J 2 All ER (Comm) 312. (2) ud [4].
* European Gnat* <1 Shipping Ltd v Johnston [1913) QB 520, Bosk MeUot t« GAA Dnelopment asd Construction Co lA Ewreoched in Arbitration Ordinance a 31(2). Petrochemical Industries Co (KSC) v Dow Chemical Co [2012] 2 Uoyd'i Rep 691, [2 7J, Zerma/r HeJAngr SA
" [2012] 2 Lloyd's Rep 691. [2] and [27] Upholstery Repairs Ud [1985] 2 EGLR 14 applied.
[1911] 2 Lloyd"* Rep 44. Greats!up (India) Ltd v Octanogrcfia S.4 dt CV [2013] 1 All ER (Comm) 1244, Union Marine Classification Servlets
“ Hiscxu «• Outtnretie (199211 AC 562 LLC v Government of the Union of Comoros [2015] 2 Uoyd'a Rep 49, Cadogtei Maritime Inc v Turner Shipping Inc
“ (201)) 2 Uoyd'i Rep 351 (2013] 1 Uoyd'a Rep 630. [43).
 226 1IIC AWARD, COSTS AND IM ERECT
costs m
224 11lf AWARD' ( OSIN AND INIH(» HI SIIIISI AM IALRICQtlIRRMKNT OF AN AWARD 225
to matters of fact and explain succinctly why it has come to such decision.471-qually Id particular, unless otherwise agreed by the parties, an arbitral tribunal may also allow 11,036
Nonetheleai, if there ii doubl whether it particular point Is nn issue, it is the duty of the There were no particular f ormalities as to how the dispute should be "put to" the tribunal. 11.030 when summarising arguments and evidence of the parties, the arbitral tribunal is not costs incurred in the preparation of the arbitral proceedings prior to the commencement
erbiiral tribunal to seek clnriHciitiona from the pnrtics." So far as the matter is placed before the tribunal by wayi of, namely, pleading and/or required to deal with each and every issue in a minute fashion. The arbitral tribunal u of the arbitration.”
Hit of issues, such issue would be considered as to have been "put to" the tribunal.40 expected, rather, to deal with the issue that their reasoning hinges upon and deal with it
1I.02H In the recent ense l/MS Holding l.hl v Great Station Properties SA** Tciirc J laid down in n composite manner where possible.4* When determining the appropriate directions to be made, the arbitral tribunal may have llJt37
neatly the roaioni why it court would not go into minuto dissection of whether the The court merely considern whether a reason has been provided when deciding the 11.031 to regard all relevant circumstances.’2 In litigation, costs are a matter of discretion of the
nrbilrnl tribunal considered those evidential Issues: itsue. As long ns the nrhilrul tribunal docs give reasons, the tribunal would have hnd (d) Certainty court.” An arbitrator enjoys the same discretion, which he should exercise judicially,
“dealt with" tho issue already. The court is not in n position to make evaluation or tnd applies the same principles enforceable in the court*4
(1) first, the tribunal's duly In to decide tho essential Issues put to it lor decision usessmcnt as to the correctness and accurateness of the reasons given by tho arbitral 11.034 As an award would become an enforceable judgment subject to the leave of the court,
Thus, the general principle remains that costs should follow the event, meaning that a 11 JDS
and to givo its reasons for doing so, It docs not have to deal in its reasons with tribunal, but whether it 1ms actually “dealt with" tho matter.41 As vividly put by Flnux J it is essential that the award should be certain so that parties can act upon the rulingi
tuccessful party is entitled to recover its costs from the unsuccessful party. In Lewis v
each point mnde by a party In relation to those essential issues or refer to all In BV Scheepsworf Datum Gorinchetn v Marine Institute (Pie Celtic Explorer),41 of the arbitral tribunal. An award that is unclear or ambiguous would be subjected
Haverfordwest Rural District Council,” Lord Goddard CJ put it thus:
the relevant evidence, the court would not entertain a disappointed party saying it has been treated unfairly to challenge or would be resisted for enforcement.49 The award should be clear as to
because its criticism of some piece of evidence has not been accepted and fully dealt which party should pay to whom what amount of money (for eases involving granting
(2) Second, the assessment and evaluation ofiuch evidence is a matter exclusively "... there is a settled practice of the courts that, in the absence of special
within tho award. of damages or restitution) or which party is prohibited to do what (for cases involving
lor tho tribunal I ho court lias no role in this regard. circumstances, a successful litigant should receive his costs, and that it is necessary
injunctive relief).’0 The date on which interest would start to accrue should also be
A deficiency of reason or n deficiency of good and sound reasons is not to be equaled 11.032 to show some grounds for refusing an order which would give them to him The
(3) Third, where a tribunal in its reasons has not referred to a piece of evidence stated clearly.
with failing to deal with all issues in an arbitration.41 In Prlmera Maritime (Hellas) discretion to refuse that order must be judicially exercised. Those words ‘judicially
which one party says is crucial, tho tribunal may havo (1) considered it, but exercised’ are somewhat difficult to apply, but they mean that the arbitrator must
Ltd v Jiangsu Eastern Heavy Industry Co ltd,44 the court held that:
regarded it as not detcrininatlvo, (ii) considered it, hut assessed it as coming not act capriciously and must, if he exercises his discretion to refuse the usual
Irnrn an unreliable source, (iii) considered it, hut misunderstood it or 5. Costs
"(40J ... Once it is recognised that (the tribunal) has dealt with the issue, there is order, show a reason connected with the case which the court can sec is proper.**
(iv) overlooked It. There may be other possibilities. Where the court seek*
no scope for [challenging the award]... once it is recognised that the tribunal (a) General principles
to determine why tho tribunal hnd not referred to certain evidence it would That said, albeit the default principle is still “costs follow the event", the arbitrator is 11.039
has ‘dealt with' tho issue, the sub-section does not involve some qualitative
have to consider the entirety of tho evidence which wns before the tribunal 11.035 An arbitral tribunal is empowered to award costs of arbitral proceedings pursuant to entitled to, and in fact should, take into account a wide range of considerations and make
assessment of how the tribunal dealt with it. Provided the tribunal has dealt
and which wns relevant to the decision under challenge. Such evidence would Arbitration Ordinance s.74. UNCITRAL Arbitration Rules 1976 art.40(2) provides that idjustments whenever appropriate.54 For example, courts are increasingly inclined to
with it, it docs not matter whether it has done so well, badly or indifferently.
includo not only documentary evidence but also the trunscripts of factual and "costs” include only: take an issue-based approach, separating out individual issues for cost purposes.”
expert evidcnco. Such nn enquiry (in nddition to being lengthy, as it certainly (41) It is wrong in principle to look at the quality of the reasoning if the tribunal has Under Arbitration Ordinance s.74(7), the arbitral tribunal is obliged to only allow
would be in the present case) would he un Impermissible exercise for the court dealt with the issue.4’ Tills emerges clearly from the judgment of Thomas J (1) Fees of the arbitral tribunal; costs that are “reasonable having regard to all the circumstances". Relevant factors can
to undertake bccnusc it is the tribunal, not the court, that assesses the evidence (as he then was) in Hussmann (Europe) Ltd v Al Ameen Development A include the complexity of the case, any non-compliance with directions and the parties'
adduced by the parties. Further, for the court to decide that the tribunal had Dade Co...” (2) Tlic arbitrators’ reasonable travel and other expenses;
relative success in the arbitration on all the issues raised. It is submitted that the arbitral
overlooked certain evidence, the court would have to conclude that the only (3) Reasonable costs of expert advice and of other assistance required by the tribunal may refer to Rules of the High Court (Cap.4A, Sub Leg.) (RHC) 0.62 r 5< 1i.
inference to be drawn from the tribunal's failure to mention such evidence was That said, n reasoned award is not a recital or trnnscript of tho whole arbitral proceeding. 11.033 tribunal; which provides a useful guideline as to how cost order may vary depending on the way
that the tribunal had overlooked it. Milt the tribunal may have hnd a different Doing so would only piny down and muddle up the rcnl issues in dispute. As long parties conduct their case:
view of the importance, relcvnncc or reliability of the evidence from that of the m the issues in dispute are relevant when reaching the decision, the tribunal is not (4) Reasonable travel and other expenses of witnesses;
court and so the required inference cannot be drawn. wpected to record at length the evidence and/or submissions raised by the parties.44 (5) Legal and other costs incurred by the parties to the extent reasonable; and (a) the underlying objectives set out in 0.1A r. 1;
h giving reasons, the arbitral tribunal needs to give a clear and unequivocal ruling as
(4) Fourth, Arbitration Ordinance s.68 is considered with duo process. Section 68 is (6) Any fees and expenses of the appointing authority (as well as the fees and (b) any such offer of contribution as is mentioned in 0.16 r. 10, which is brought
not concerned with whether the tribunal hai made the "right" finding of fact, any expenses of the Permanent Court of Arbitration). to its attention in pursuance of a reserved right to do so;
more than it is concerned with whether the tribunal has mnde the "right" decision Cadogai Maritime Inc v T\mw Shipping Inc (2013) I Lloyd** Rap 630. f22) (Hamblw J).
in law, Tho suggestion that it is a serious Irregularity to fuil to deal with certain Prime,a Maritime (HflItu) Ltdv Jiangsu Eiuierv Hearty Indus ny Co Ltd (2014) 1 All ER (Comm) 113, |6|.Carlogan (c) any payment of money into court and the amount of such payment;
evidence ignores this principle, Ily choosing to resolve disputes by arbitration, Hartnme he v Dinar Shlp/Ang Inc (2013) 1 Lloyd'* Rep 630, (40), (43).
12013) 2 IJoyd'i Rap 331. (44) (d) any written offer made under 0.33 r.4A(2);
the parlies clothe the tribunal with jurisdiction to make a “wrong" finding of fad Motguleadlid v Etlde nchnologln (2004) 2 All ER (Comm) 727, (41 )-(44). Halcmw GroupLid v Blnckjrool Borvugh
Cnmcil 172 Con LR 224. R* Porter A Mill,'Arbitration (1964J 2 QB 467, Bremer Handehgeselhchqfl mbH v Wettzrrcker GmbH (No 3) |19tU
Thus, when considering whether a particular dispute could be properly classified ** 12014) I All ER (Comm) IIS. (40)-(41) Sea alio 7T.a Celtic Esplorer. 2 Lloyd'* Rep 130. (132)-(133) (Donaldson LJ). Compton Beauchamp Estates Ltd v Spence (2013) 2 P A CR 15. Bar
11.029 Human* (Eunspe) Ltd v Al Ameen Development A hade Co (2000) CLC 1243. (36) (TbomM J, •* Lord Tboin** Cl
an "Issue" of the proceeding, the court would adopt an ordinary nppronch, giving the Holtl and Re,ori Lid v Cm aller Construction Co Lid (2001) UKPC 34.
, k*0 w*i) " Petrochemical Industrie, (KSC) » Dow Chemical Co (2012) 2 Lloyd'* Rtp 691. (27). Aifctntioa Ordinxoce * 74<7Xb).
word "issue" nn ordinary and natural meaning. If satisfied that the matter in dispu,e Vot/d Trade Corp ijdvC Czanrlkow Sugar Ltd (2004) 2 All ER (Comm) 113. Prottch Projects Comlmctlon (Ply) Lid " See. for example. Zwlebel v Komg (2009) EWCA Civ 192 *.74(2), *ee *l*o Chhmey Construction CoLtdvPo Kwong Marble Factory Ltd (2005) 3 HKLRD 75*
constitutes nn "Issue" of the proceeding, the court should then turn to consider whether 'Al Khmnfi A Son, (2005) 2 Lloyd'* Rap 779. Aaron n.chok Schwebel v Schwebel (2011) 2 All ER (Comm) 104*. • Marguhe, Bra, Ltd v Dqfni, Thomaldes A Co (UK) Ltd (1951) 1 WLR 39*. Montrose Canned Food, Ltd v Eric Ktlh RHC 0.62 r 29.
Ptaucatolana d* Commcrclo SA r Incobmia Indutitlal a Commercial a Brazllelra SA (The Vem) (1995) I IJoyd'i (Merchant,) Ltd \ 1965) 1 Lloyd'* Rep 597, On con Waren-Htmdelgeiellt draft mbH v Iniergroan NV (1967) 2 Lloyd I *oon Lee Construction Co Lid v Hohrood ltd (HCCT 61/2010, (2011) HKBC 29*
the issue has been "put to" the tribunal. *H>2I3.1lobelia Shipowner SA » Shogang Shipping Co Lid (The Aquafanh) (2012) 2 All ER (Comm) 461. Petmshlps Rep 12. River Plate Products Netherlands BV v Estobllxsement Coo,grain (19*2) 1 Lloyd'* Rep 621. Bulk hading SA (1953) 1 WLR 1416. 1417.
ft* Ltd of Singapore v Perec hading and Investment Corp of Htmom (The Pan Range) (2001) 2 Lloyd'* Rep 341. v Moeller (2007) 1 Lloyd'* Rep 61, African Fertilizers and Chemicals NIG Ltd r BD Shtpsnavo GmbH A Co Rrederd Wong Kam Tong v hn String Court. Turn Long (JO) (No 3) (2012) 2 HKLRD 112*.
He»k Sharping l td v Cron NaMgotlon Ltd (2003) EWltC 1121 (Comm). Sea alio PT Transporliul Ga, Indonesia v KG (2011) 2 Lloyd'* Rep 531. KJ v KMLM (Vartanon Costs) (2014) HKJLR 227.
• r rO|20|7|l!W)IC illHCoam). hurbulk Ltd v Aide, Shlpfing Co (the Hmettp) |19I4) 2 Lloyd’* R«p«*Fftl'a ConocoPhllllpi (Grttslk) Ltd (2017) 1 AM ER (Comm) 634. VMS Holding Lid v Great Station Properties SA (2011) I
» (2011) I AIIER (( ««■) 136 ER (Comm) 156.
r
2J0 HIE AWARD. COSTS ANI) INT EREST
COSTS 211
228 THE AWARD, COSTS AND INTEREST COSTS 229
may apply by originating summons71 to challenge the amount of the tribunal’s fees and
(v) Costs reserved
As a matter of public policy, a provision of nn arbitration agreement to the effect 11.041 expenses.”
(e) any written offer which is expressed to be “without prejudice save as to costs" flic arbitral tribunal may reserve making any cost order for the interlocutory application 11.953
and which relates to any issue in the proceedings, but the Court may not take that the parties, or any of the parties, must pay their own costs in respect of arbitral 11.047 In the event that an arbitrator’s mandate terminates under UNCITRAL Model Law ind give an award at a later stage on costs.
the offer into account if, at the time it is made, the party making it could have proceedings arising under the agreement is void.81 Such provision, however, is not void art. 13, the Court may order that the arbitrator is not entitled to receive the whole or pan
protected his position as to costs by means of a sanctioned payment or a if it is part of an agreement to submit to arbitration a dispute that had arisen before of the fees or expenses.71 (vi) No order as to costs
sanctioned offer under 0.22; the agreement was made.M The legislative intention is to prevent the party of weaker
The arbitral tribunal may also make an order that each party bears their own costs m 11.054
bargaining power from being abused. (c) Common cost orders
(0 the conduct of all the parties; this interlocutory application.76
When considering how to assess and/or apportion costs of the arbitration, there is still 11.043
(1) whether it was reasonable for a party to raise, pursue or contest a 11.048 The cost orders of the hearing proper would be comparatively simple and
■ duty on the arbitral tribunal to offer both parties an opportunity to address before (d) The effect of sealed offer to costs
particular allegation or issue; straightforward. The cost orders that the arbitral tribunal has to order for interlocutory
making the decision 85 applications would nonetheless be more complicated. Whilst costs have already been Under the old Arbitration Ordinance (Cap.341),77 it was possible for parties in 11.055
(2) the manner in which a party has pursued or defended his case or a 11.042 incurred at the end of an interlocutory application, the final outcome of the whole ubitration to make “payment into court”, a mechanism that has now been removed.
That said, it would be appropriate to mention at this juncture that English authority'88
particular allegation or issue; arbitral proceeding is still pending. Thus, a party succeeding in an interlocutory Rather, parties can now resort to other forms of cost protection.
has expressly held that the approach taken by courts in accordance with the Civil
(3) whether a claimant who has succeeded in his claim, in whole or in part, Procedure Rules as to what could be awarded by w-ay of costs was of little direct proceeding might eventually succeed or fail in the hearing proper. The arbitral tribunal
Tbe first mechanism is a Calderbank offer, which is a letter containing a settlement 11-056
exaggerated his claim; and relevance in arbitration. The English Commercial Court noted that the Arbitration Act would thus have to exercise judgment as to how to make a fair and just order as to
offer made on a “without prejudice save as to costs” basis. The offeror expressly reserves
1996 has vested a much wider scope of procedural power in the hands of the arbitrator. costs at that juncture.
(4) conduct before, as well as during, the proceedings. tbe right to refer the letter to the tribunal on the question of costs in the event that the
This point was so far not mentioned or taken in Hong Kong. Whilst, undeniably, the offer is not accepted.78 The effect of such offer is explored in Tramountana Arm odora
(i) Costs to the succeeding party to be paidforthwith
(g) whether a party has succeeded on part of his case, even if he has not been Arbitration Ordinance is drafted deliberately wide so as to give all sorts of powers S4 v Atlantic Shipping Co SA :n
wholly successful; and to the arbitral tribunal, the arbitral tribunal could still lend support and pray in aid 11.049 By this cost order, the arbitral tribunal allows the successful party to get reimbursed his
to the authorities and principles of costs under the RHC/Rulcs of the District Court costs forthwith. This cost order gives an immediate financial pressure to the losing party "... If the Claimant in the end has achieved not more than he would have achieved
(h) any admissible offer to settle made by a party, which is drawn to the Court’s of the interlocutory application as he would have to pay up the costs of the succeeding
(Cap.336H, Sub.Leg.) (RDC) in light of the lack of any definitive authorities so far. by accepting the offer, the continuance of the arbitration after that date has been a
attention. party immediately. Save in cases where the application is most clear-cut, or either party waste of time and money. Prima facie the claimant should recover his costs up to
(b) Fees and expenses of the arbitral tribunal has been acting unreasonably in an intcrlocutoiy application, an order for forthwith the date of the offer, and should be ordered to pay the respondent’s costs after that
11.040 In particular, an arbitral tribunal should be more ready to depart from the general rule payment of the costs would not be appropriate.
11.044 date. If the claimant has achieved more by going on, the respondent should pay the
under the following circumstances: Parties to the arbitration arc jointly and severally liable to pay to the tribunal, reasonable
costs throughout.”
fees and expenses, if any, of the tribunal that are appropriate in the circumstances.87 (ii) Costs to the succeeding party in any event
(1) Where only nominal damages are awarded;51 These fees include, for example, fees, travel and accommodation costs of the arbitrator,
11.050 The arbitral tribunal may order the losing party to pay the succeeding party his costs Id summary, the core question to be asked is “whether the claimant has achieved more 11.057
the fees and expenses of any appointed experts, assessors and arbitral institution.68 In
(2) Where it was not worthwhile for the claimant to have pursued the action (eg, of the cun-ent interlocutory application no matter what the outcome of the action by rejecting the offer and going on with the arbitration than he would have achieved if
issessing the fees of an arbitrator, often a (1) time rate, (2) ad valorem or (3) a lump
after the defendant’s sealed offer) or in court’s language, sanctioned payment;* is.74 Unlike a “forthwith” order, the costs would not be payable until the end of the he had accepted the offer?”*0 Nonetheless, this is not a hard and fast rule as the weight
sum amount is adopted. proceeding. to be given to such an offer when assessing costs remains at the arbitral tribunal's
(3) Where a party has lied in the arbitration;"
Whilst the courts are reluctant to make generalisations on the appropriate scale of 11.04! discretion.11
(4) Where a party had been guilty of misleading the other party;81 and fees, it would be desirable for an arbitrator, in fixing his fees, to do so by referring to (ill) Costs to the succeeding party in the cause
The second mechanism is by way of "scaled offer”. This is where the defendant makes 11.058
major factors, including the period of time, whether days or hours, which he has in fact 11.051 The arbitral tribunal may order the succeeding party to be entitled to his costs if he
(5) Where anything is done “improperly or unnecessarily’’,0 namely: * formal offer to the plaintiff before or during the arbitral proceeding offering to settle
reasonably devoted to his work, and the scale of charges for his time so computed.69 eventually succeeded in the action. Nonetheless, if the succeeding party in this
for a specified sum, and advising that if the offer is not accepted, he intends to place the
(a) the omission to do any thing which would have been calculated to save interlocutory application eventually failed in the action, those costs would be borne by
An arbitral tribunal’s fees and expenses, though infrequent, could be a matter of dispute. 11.041 offer in the hands of the arbitrator. A sealed envelope is then handed to the arbitratar
costs; the succeeding party in this interlocutory application himself.
In order to guarantee payment, an arbitration tribunal holds a lien over an arbitral the defendant, requesting the arbitral tribunal not to open the envelope until the
(b) the doing of any thing calculated to occasion, or in a manner or at a time •ward, which allows the tribunal to retain the award until it is fully paid.70 Therefore, completion of the substantive part (liability and quantum) of the award. The sealed
(iv) Costs in the cause
calculated to occasion, unnecessary costs; and *here an arbitral tribunal refuses to deliver an award to the parties on this basis, a party offer is then taken into account on awarding costs. A potential drawback is that tbe
11.052 The arbitral tribunal may order that the costs of this interlocutory application to be
(c) any unnecessary delay in the proceedings. •rbitrator’s decision on liability might be unduly influenced and prejudiced, as he can
dependent on the result of the action. The succeeding party in the action would be
“tfer from the envelope that an offer to settle had been made.
entitled to the cost of the interlocutory application.75
Axtatraooo Ordinance f .74(1).
/W,t74<9)
Oldham v QBE Jnsurxarce (Europe) Ud (2011) 1 All ER (Comm) 1064. Gbarrg B!o *M\ih d Sheriff [ 1913) 3 All EA 730 8* Hodgkimon (1195) 2 Ch 190
" RHCO.73 rr.l and 6
*Flfm htrrmtumt! (Far Fail) Ltd v Hnrietr Packard Hong Kong Ud (CACV SI/1993. (1993J HKEC 363). Alim* •ppbed. Thu \v>! repealed by tbe Arbitration Ordinance.
Arbitration Ordinance *.77(2).
ExpnnUdrCTA Holdtngt Ud [19*4) 1 WLR 394. Euor Oi (field* Senncej Ud v Soncot Rrg Management Pvt Ud (2017) Bus LR 227. Calderbank v Calderbank [1976) Fam 93.
n Ibid, til.
* Lam CU Keweg r Wang Wad Kai [2010] 5 KKC 5*2. Art*tntoon Ordinance s 7S< 1). (1971) 2 AD ER 170.175
u Like Soon Co Ud v 7iai Kid Kai [19SS] l HKC6I9,
* Tfomamoana Armodaro SA vAilmaic Shipping Co SA (1971) 2 AD ER *70.173. tod% t.77(3)(b) and 77(6). Ibid., 177.
" Ibid
- Hang Kang Racing Pigeon AtioHahon ltd* Lam Koon Nam (HCA 11376/1999, [2002J HKEC 1791). Government of Ceylon v Cfumdns (1963) 2 QB 327 Chhmty ContnvcNon Co UdvPo Knong Marble Factory Ud (2003) 3 HKLRD 751.
** RHC«4RDC062t7 Altunin on Ordinance *77(1).
 234 THE AWARD. COSTS AND INTEREST COSTS 2J5
211 1 IffK AWAMD, rom AND Dfraitrr COSTS 233

common fund basis. A case in which the successful party has demonstrate! fee successful party acted unreasonably in refusing to agree to ADfL fas the course of
(a) Taxation ami assessment of coala (0 Basis for assessment of costs that the proceedings were initiated or prosecuted by the unsuccessful party in a assessment, a list of non-exhaustrve factors is considered:
The basis for assessment of costs refers to the approach the taxing master or the arbitral 11.062 manner which constitutes that party’s proceedings an abuse of the process of the
11.049 Taxation refers to the proccaa through which the precise quantum of coat payable la court might well be a candidate for an award of taxation of costs on an indemnity
tribunal (as the case may be) should adopt when considering what items of costs a (1) money awarded by the tribunal in the arbitral proceedings;
determined Taxation proceeding ia only required if pari lea fail to reach an agreement basis. A taxation of the successful party’s costs on an indemnify basis could
on the amount to he paid The overriding principle ia the indemnity principle”, which ciMtweeeiving party may recover from the costs-paying party. The common bases (2) the merits of the case;
to be adopted are the "Party-and-Party basis”, the "Common fund basis” and the properly be ordered, in my opinion, where the proceedings were scandalous
entaila that receiving partiea cannot recover a aum in exceaa of their liability to their
or vexatious, or had been initiated or prosecuted maliciously, or for an ulterior (3) the extent to which other settlement methods have been attempted ,
own solicitors.” If tha claiming parly ia not liable to aolicilora for their coata, then he •indemnity basis”.
motive, or in an oppressive manner. Any proceedings instituted or prosecuted
would not be In a poaition to claim to be indemnified by the other party. In Lam Lot (4) whether the costs of the ADR would be disproportionately high,
(I) Party-and-party basis in such circumstances as to constitute an affront to the court could properly be
Wah Susanna v Pacific Century Insurance Ca Ltd," Yuen JA aummariaed the atepa that
the subject of a direction for the taxation of the successful party’s costs on the (5) whether any delay in setting up and attending the ADR would have been
an arbitral tribunal ahould follow when conaidering what coata a succeeding party ia The thrust of this approach is to all such costs as were necessary or proper for the 11.063
indemnity basis. But were the third party proceedings here of that character? In prejudicial; and
entitled to recover: sttainment of justice or for enforcing or defending the rights of the party whose costs my opinion, they were not.”
ire being taxed. Hence, the costs-paying party will reimburse the costs-receiving (6) whether the ADR had a reasonable prospect of success.
(1) The firat question to be aaked ia: did the winning party employ the solicitor! party for the necessary expenses which the cost-receiving party had incurred in 11.066 This basis is only applied exceptionally when a party’s behaviour has been
in the action? In answering this question, it matters not that the solicitors prosecuting or defending the action. Any charges merely for conducting litigation Having surveyed the position in England and Wales, the Hong Kong court’s attitude llJT7fe
particularly unreasonable. The taxing master or the arbitral tribunal is entitled to
were chosen or appointed for the winning party by a third party on his behalf, more conveniently must, however, be paid by the party incurring them,*4 and the will be discussed. In Golden Eagle International (Group) Lid v GR Investment Holdings
have regard to the events prior to the commencement of the proceedings, rather
so long as they acted for him with his knowledge and assent. costa-paying party would not be liable to the same. By far, this would be the most Ltd? without being conclusive on the question, Lam J143 was reluctant to examine the
than merely confine itself to the way the litigation was contested for a more holistic
common basis to be adopted in taxation. merits of the case in great detail for the purpose of cost sanction, for these reasons:
(2) If the answer is "Yes”, it is presumed that the winning party had a primefade assessment.”
obligation to remunerate the solicitors, because that would be the ordinary (1) there is no cost sanction if the parties cannot reach settlement after making a
(II) Common fund basis (g) Adverse cost order for failure to mediate
basis on which a professional person is employed to represent a party. reasonable effort in mediation;
An order for costs on the common fund basis requires some special or unusual feature 11.064
(3) ft is for the losing party to rebut that presumption. The presumption is not 11.067 After the Civil Justice Reform, the judiciary has borne in mind the underlying
in the case,” As a more generous approach than the "party-and-party” basis, it allows a (2) under Practice Direction 31 Mediation, the parties can avoid cost sanction
rebutted simply by evidence that a third party had alio undertaken to pay objectives under RHC and RDC 0.1A r. 1, an important feature of which is to facilitate
reasonable amount of respect for all costs reasonably incurred. Cost is often awarded on after they have participated in mediation up to the agreed minimum level of
the aolicilora’ coats. However, the presumption would be rebutted if there if the settlement of disputes.”
• common fund basis to a successful infant plaintiff where the matter is compromised participation;
evidence of an agreement made by the solicitors with the winning party, or or settled, so that the court can be reasonably sure of the adequacy of the settlement 11.068 The English courts have long embraced the practice of imposing cost sanctions
with the third party, that under no circumstances would the winning party be (3) the costs involved in such participation in Hong Kong would usually not be
to the infant.41 It has also been used by the court to penalise a party for unreasonably against parties who have unreasonably refused to submit the matter to ADR, in
liable to them for the coats of the litigation incurred on his behalf. high enough to encourage such nuisance claim; and
refusing to mediate.” particular, mediation. In Dunnett v Railtrack Pic? Brookes U held that if a party
turns down out of hand the possibility of alternative dispute resolution when (4) in Hong Kong, the costs of mediation can be included as part of the legal costs
11.064) Normally, the process of taxation ia commenced by the costa-receiving party submitting (Hi) Indemnity basis suggested by the court as part of the effective management of the case, there may and recoverable by the successful party if the mediation was unfruitful.
a bill of coats to the arbitral tribunal, drafted by a specialist law coats draftsman, setting be uncomfortable consequences in costs. The court in exercising its discretion
On this basis, all costs are to be allowed except those unreasonably Incurred or of 11.065
out a detailed itemised breakdown of the coats. The coats-paying party will then hie a
enreasonahle amount; the receiving party being given the benefit of any doubt” as to costs” is bound to take into account all the circumstances of the case. Any Lam J also added the caveat that there were differences between the position in man
“bat of objections” in response. Where the parties have agreed that the coals of arbitral settlement offers made by the successful party may be disregarded in the assessment Hong Kong under Practice Direction 31 and that in England. In Hong Kong, a party
Typically, around 90 per cent of the costs can be recovered by the winning party. As to
proceedings are to he taxed by the court, the award will be taxed on the “party and of costs where it refused to contemplate alternative dispute resolution before the could not rely on his own unreasonable belief to justify his refusal to mediate. The
the circumstances under which such order is made, the position is best summarised by
party” basis** in accordance with RIIC 0.62 r.2JK2)” Upon taxation by the court, the costs started to flow. forden is on the unwilling party to provide a reasonable explanation for his refusal
Godfrey J in Overseas Trust Dank Ltd v Coopers A Lybrand:**
arbitral tribunal must make an additional award of costs reflecting the result of such to mediate. The ratio in Golden Eagle International (Group) Ltd v GR Investment
taxation.** 11.069 The English courts are nonetheless mindful of the potentially draconian nature of this
"To justify a taxation on the indemnity basis, the successful party has to show, Holdings Ltd was more recently applied in Wu Tim Kwong Kindwind v Manhood
approach. Dyson LJ in Halsey v Milton Keynes General NHS Trust*m offers a more
11.061 A decision of the court on taxation is not subject to appeal.*7 However, under the old either that the case is one of a type already recognised in the practice of the Development Ltd,m where it was held that the lack of settlement offer and the
cautious and comprehensive review of the principles, recognising that to “oblige
Arbitration Ordinance, any party to any taxation proceedings who was dissatisfied with court as warranting a taxation on that basis (such as, for example, the contempt “^cooperative attitude of the other party are not a reasonable explanation for refusing
truly unwilling parties to refer their disputes to mediation would be to impose an
the taxing matter's decision is allowed to apply to the taxing master to review hi* cases to which I have already referred) or that there is some feature in the case to mediate.
unacceptable obstruction on their right of access to the court.”100 It has to be proved that j
decision M The position under the new rule is ambiguous — it seems to suggest that s even more special or unusual than one which would justify a taxation on the Although awarding cost sanctions for unreasonable refusals to mediate has >Tt to II.*72
review by the taxing master is still possible whilst a further review to the judge is not- ! ** a frequent occurrence in Hong Kong courts, practitioners should pay heed to its
” Hung Mait Decoration Co US r Kan loan Tha Horn* Owners Aisodonon (HCA 3409/2001. (2003) HKEC *72).
Ue Lit r Protprrfeld Ventures (HCA 4572/2002. [2003] HKEC 551). Town Plcuwnng Booni e Socien for Prune**" 4 development and actively explore the possibility of resorting to ADR.
* Sm,rhwBull*r( U74-7J) LAI9 E* 473. •he Harbour US (Ho 2) (200*) 7 HKCFAR 114. Scherer e Counftrrg Instruments US (19S6J 1 WLR 615.
■ GtmrSn r CtfntAvry ||9I0) I KH 445 * Preston r Prenon [1912] Fob 17. WharfPropente* US e Eric Cumtne Associates Architects Engineers Surveyors (HCA ~ RHCwdRDCO.lArl(c).
• pOOIJJMXOfM I3431/1913. [1911) HKEC 1231) " [2002) I WLR 2434
" Im par* 11 Ml ■* Tat Cham Ytmf »■///(t«9) 2 HKLRD 549. ” Uodcr the CrvG Proccdare Rule* P«rt 44 of Ea«Jaad W«le* * [2010) 3 HKLAD 273
- aahw—7*i) * OoUtm tape International (Grump) US r GM hreesmen* Holdings US (2010) 3 HKLRD 273 - (2004) 1 WLR 3002. * AiLaVPSaMt
* Ovenea, That Bsmt US • Cooper* 4 L*rw*\\99\)\mLB. in. EMI Maconb US elmCamerrm Wallace US {\m\ - HHS, 3007 "* 12015) 4 HKC 59S.
m na »ivs, C*59
• A/S»»num OiSiamta (Ctp Ml)i Jfll, m« «Im iHC O 42 r 3), “ (1991)I HKLR 177.113.
 2 1H I IIE AWARD, C OS IS AND INI ERECT CORRECTION Of THE AWARD 239
136 T1IE AWARD, C OSTS AND INTKKKSI CORRECTION OK I IIE AWARD 237

Article 33. Correction and interpretation of award; additional award the thought process itself ... ITic fact that the enor was an elementary error ts
6. Interest Insofar ns post-award interest is concerned, Arbitration Ordinance s 80 provides that 11.077
juch interest is payable from (I) the date of the award or order on costs or (2) the date (1) Within thirty days of receipt of the award, unless another period of lime hai not sufficient to make it accidental.”
(a) General principles on which costs ordered are directed to he paid forthwith. Here, unlike s.79, n tribunal or been agreed upon by the parties:
i court is bound to apply the judgment rate,10® meaning the rate of interest is determined Thus, the scope under which an arbitral tribunal could make a correction is essentially 11.00*
11.073 Interest is the compensation for deferred consumption of scarce resources. Successful (a) A party, with notice to the other party, may request the arbitral tribunal limited one. If the urbitral tribunal, on reflection, considered they have erred
by the Chief Justice under High Court Ordinance (Cap.4) 8.49(1 Kb) on Interest on
claimants would he undercompensated if interest is not nwarded ns he had lost the to correct in the award any errors in computation, any clerical or in assessment of evidence and/or legal arguments, they are not entitled to justify a
judgments. The judgment rate applicable is that determined and in force ns nt the date
use of his money from the time ho ought to have received it until the time it is actually typographical errors or any emirs of similar nature; correction by slotting such amendment under the "accidental slip rule”.1,7
of the award .110
paid.104 It is thus inaccurate to deem an award of interest penal in nature. (b) If so agreed by the parlies, a party with notice to the other party, m«y
The periods covered by Arbitration Ordinance s.80 (interest payable front the date 11.078 Hie “accidental slip rule’’ was expressly upheld and adopted in Hong Kong in China 1L09*
11.074 At common law, in the nbsence of any agreement or statutory provisions for request the nrbitral tribunal to give an interpretation of a specific point Property Development (Holdings) Ltd v Mamiecly Ltd,11* where the court granted (he
of an award) and s.79 (interest pnyable for any period ending not later thnn the dntc
the payment of interest, a court or an arbitral tribunal has no power to award or part of the award. plaintifTs application to set aside part of the additional award. The court reiterated that
of pnyment) are worth noting. Since s.80 npplies “except when the nwnrd otherwise
interest, simple or compound, by way of damages for the Into pnyment of a debt provides’’,1" it operates ns the default provision. the “accidental slip rule” should not be used for the arbitral tribunal to expand on the
(2) Hie nrbitral tribunal may correct any erTor of the type referred in paragraph
(save for a limited cquiluhic jurisdiction).10* Arbitration Ordinance s.79(l) thus reasons. This was confirmed by the Court of Appeal.11*
(IXa) of this orticle on its own initiative within thirty days of receipt of the
provides that un arbitral tribunul vested with the power may award simple or award,
compound interest on: 7. Correction of hie Award (3) Unless otherwise agreed by the parties, a party, with notice to the other
(1) money nwarded by the tribunal in the arbitral proceedings; party, may request, within thirty days of receipt of the award, the arbitral
(a) The concept of/Unctus officio and exceptions to It
tribunal to make an additional award as to claims presented in the arbitral
(2) money claimed in, and outstanding ut the commencement of, the arbitral proceedings but omitted form the award. If the arbitral tribunal considers the
The duty of the arbitral tribunal comes to an end when the award is handed down. This 11.079
proceedings but paid before the awurd is made; or request to be justified, it shall make the additional award within sixty days.
is often referred to as functus officio. This also means that at that point, the jurisdiction
(3) costs awarded or ordcrod by the tribunal in the arbitral proceedings. of the nrbitral tribunal in dealing with the proceeding officially ceases. This implies
(4) The arbitral tribunal may extend, if necessary, the period of time within
that the nrbitral tribunal would not be entitled to reopen the arbitral proceeding, receive
which it shall make a correction, intcrpreta5tion or an additional award under
11.075 Arbitration Ordinance s.79(l) makes clear that the tribunal’s power extends to the new evidence or hear additional arguments.111 Although it is often for arbitral tribunal
paragraph (1) or (3) of this article.
award of compound interest. This is intended to reflect commercial reality for a more to issue partial award on a preliminary matter (namely, interim remedies or on as
accurate estimation of a parly's loss, us the case may be. jurisdictional point) or merits (with costs saved for a later award), this does not mean (5) The provisions of article 31 shall apply to a correction or interpretation of the
the arbitral tribunal was not functus on the point that he has already decided in the award or to an additional award.
(b) The applicable rote partial award. The principle offunctus officio applies as much to a partial award as to
i final award."1 11.082 It should be noted that unlike the general position that the arbitral tribunal is free to
11.076 Although the arbitral tribunal enjoys a certain degree of discretion when it comes to render an award without any time constraint, the UNCITRAL Model Law stipulates
determining the applicable rate, the courts have deemed arbitrary variations amongst Nonetheless, as the arbitral tribunal’s creation and its jurisdiction arc creatures of 11.080
certain time frame that the arbitral tribunal should comply with when issuing additional
similar cases undesirable. In Komala Dcccof A Co SA v Perusohaan Pertambangan parties’ consent, parties may agree to confer the tribunal power with regard to correcting
awards to correct or clarify a point.
Minyak Dan Gas Bumi Negara (Pertamina),'0* one per cent above the minimum an award or making an additional award. Further, the UNC1TRAL Model Law and the
lending rate has been accepted ns the proper figure for interest, in accordance with the Arbitral Tribunal also confer certain power to the nrbitral tribunal to make an additional
(b) Correction of the award
usual practice of the England Commercial Court. Con JA was minded to adopt it as a award, clarify, remove ambiguity or correct an award.
general guidance on the question so that reasonable consistency may be promoted. The 11.083 The tribunal has a power to correct an award if a clerical or typographical mistake w*s
UNC1TRAL Model Law art.33"4 allows the tribunal to make correction and 11.081
court should look at the rate at which a plaintiff with the general attributes of the actual due to an accidental slip or omission. In Food Corp of India v Marastro Contpania
Interpretation of the award under limited circumstances:
successful party could borrow money unless there was something exceptional that Naviera SA of Panama (The Trade Fortitude),"* Lloyd IJ explained what could be
,91,
would justify a modification of that approach,107 such as when substantial unfairness classified as an “accidental slip’
would be caused to either party.1®0
“In one sense, of course, all errors are accidental. You do not make a mistake on
** Aibitritiao Onhnaoc* 110(2)
purpose. But here the words take their colour from their context. I do not suggest
* Bocco Giuseppe A Flgll v Tiodax Export SA (1914) l WLR 742
m AB Kemp Ltd v Tollaid [)9i6] 2 Lloyd'i Rep 611, Owners of the MV Miron v Trodai Esporl SA (The Miron) (197011 Aibibiboa Ordinance 110(1).
that (the correction of mistakesj is limited to clerical mistakes. But, in general, the
QBS27 * Elektnm SA v Hv*»kA Universal SA (2007) 2 AD ER (Comm) J65. (76). Monin Danes v Treasure A Son Lid (2011J 2 error must, in the words of Rowlatt J in Sutherland & Co v Hannevig Brothers
• PrtvJmt of hrdle v La Plnluda Compano HaMgoaon £4 (1913) AC KM. London, Chatham mrd Do'** AD ER (Comm) 569
CarSotth Eastern Raihray Co (1193) AC 429 “ Fidelitas Stripping Co Ltd y VfO Exponchleb (1966) 1 QB 630. Weulmrd Helicopters Lid v AlHeJoilan (2004) 2
Ltd"6 be an error affecting the expression of the tribunal’s thought, not an error m
- (1914) HKLA 219 Uoyd'i Rep 523 See ilio Emirates Trading Agency LLC v Socledade de Fomenio Industrial Private Ltd (2016] 1 All MhihoI Shipping Corp v Bayshorw Shipping Co Ltd (The Montan) (1913) I WLR 623. Sxetherimxd A Cm r ,
•• EyirtnghbJHDPoeificU4vCh'tig Poh(CACV 51V2001. (2002) KKEC 211). ER (Comm) 317, Brothers Ltd (1921) 1 KB 336, Al-Hadho Trading Co * Ttadigraln SA (2002) 2 Uoyd'i Rap 312.
"• Sheono* Utmm»Hunan he vMaclaine Watson & Co Lk! (No 2) [1990) 3 All ER 723. 733. Entrenched u AfhitraOoa Ordinance I 69 Classification Services LLC v Government of the Oman of Comoros (2013) 2 Uoyd’i Rap 49
"* (1917] I WLR 134 (RCCT 33/2010. (2015] KKEC 323)(Dcptfy lodge Sudoo Lamp)
IM (1921) 1 KB 336. 341 Chtno Proptrtx Development (holdings) Ltd v Mandech- Lid (CACV 92-93/2013.(2016] KKEC 1131}
 Chatty* 12

RECOURSE AGAINST AN AWARD

1. Framework under thi UNCTTRAL Model Law

L F-imrwark mis ix UNCTTRAL Waled Law-------------------------------------- 12001 mn

(a) Sdi^ c^narad________________________________________ 12004
(Vj Eefaasg lo esforac ac nrl--------------------------------------------------------- 12-006
(4 Appearing id tx Coat of Fin* lutaee------------------------------------------- 120W
12M2
2 General Procr’ici ■ Ezfareas? and or Refssasg to Enforce ao Award-------- 12012
2 Grants for Sccej Asads Bad Kefaaf lo Eaforce an A»rd-------------------12-017
fa) hopnedy of parry cd avabdfi) of agVatiJtioa agreengg---------------- 12-017
cfng&tioafaaban|!!!^L___ jjfliyr*___________ 12_021

(i) GeneraJ prinopiet____________________________________________ 12-021

(a) Serions and egregious is aftne for sabfficvio present___________ 12023
(■) C—iai between aaafaificy id presea* and prejudice_____________ 12026
04) Arbitral tribaaal natpg decnaoa on cma votiboe_______________ 12021
fc) Outside or beyock the scope of tie *t*!r*hao agreement_____________ 12033 (a) Setting aside aa award
(d) krepfarioa ac Ike coapmlfiop of foe arbitral tribusal or USCITRAL Model Law art34‘ provides a mechanism for ponies to sec aside aa arbitral PH
6erteaoapwfidire---------------------------------------------------------------- 12037
(e) Award doc hmdat, sec aside or anpeaded---------------------------------------- 12042
(f; NoD-art-firab&ffy_________________________________________________ 12044 81. Article 34 of UNCTTRAL Model Law (Application for setting aside aa
(fj Contrary to pobfac pofacy_________________________________________ 12046 exdasve recoarse apiart arbitral award)

4 Eafarcag ac Arbitral Award...................................................................... ....... 12056 (1) Article 34 of tbe UNCTTRAL Modd Law. the tart of winch a set owe
(a) Sew York Coovesako awards_____________________________________ 12057 below, has effect subject to section 13(5)—
(b) Mad—1 award*_________________________________________________ 12061 mArticle 34. Appfoccticn for setting aside as exclusive
fe) Macao awards----------------------------------------------------------------------------- 12063 recoease against arbitral c*rard
(d) Odber awards_____________________________________________________ 12064 (1) Recourse to a court against an arbitral award may be made
bdmmity Costs opoo Unsacceasfhl Challenge-------------------------------------- 12068 only by an application for setting aside in accordance wuh
paragraphs (2) and (3) of this article.

(2) An arbitral award may be set aside by die court specified in

article 6 only if

(a) the party making the application furnishes proof that:

(!) a party to the arbitration agreement referred lo in atiefc 7

 246 RECOURSE At; ALNST AN AW ARD
FRAMEW ORK UNDER THE UNCTTRAL MODEL LAW UT
>•» UCOCSSS \GAINST IN XVWRD FRAMEWORK UNDER THE UNCTTRAL MODEL LAW 245
(e) that the composition of the arbitral authority or the arbitral procedure b other words, it is submitted that there remains a grey area for (be potential appheatioa
was not in accordance with— of the English case law- on grounds of serious irregularity and substantial injustice a tbe
vabd index the Uw to which the parties haw suhicctcd it (3) Subject to subsection (2\cV the Court does not have jurisdiction to set
faahtvg acv tnAcanon thereon. under the law of this State, or aside or remit an arbitral award on the ground of errors of fact or law on (i) the agreement of the parties; or context of non-Convcntion, non-Mainland and non-Macao awards, winch are governed
the face of the award. by Arbitration Ordinance s 86(1V
(tfl the partv making the application was not given prv^xr (ii) (if there was no agreement) the law of the country where tbe
notice of the apfouicncnt of an arbitrator or of the arbitral (4) The leave of the Court is required for any appeal from a decision of the arbitration took place; or (c) Appealing to the Coart of First Instance
proceedings or was otherwise unable to present his case, or Court under article 34 of the UNCITRAL Model Law, given effect to by
(0 that tbe award— Under the old Arbitration Ordinance (Cap.341), domestic arbitration coaid be appealed 12JW
subsection (IV
(hi) the award deals with a dispute not contemplated by or on aider the ground of “serious irregularity*’ or “on question of law" These are swrilar
(i) has not yet become binding on the parties; or
falling within die terms of the submission to arbitration, provisions that still apply in the English Arbitration Act 1996.5 These provisions are no
Article 34 provides a limited, refined and narrow regime for a party to set aside an award. 12.00?
or contains decisions on matters beyond die scope of die (ii) has been set aside or suspended by a competent authority of the longer available under the main body of the current Arbitration Ordinance^
Essentially, grounds under art.34 are exhaustive. This proposition both encourages and
submission to arbitration, provided that, if the decisions country in which, or under tbe law of which, it was made
echoes with the all along thematic doctrine that different jurisdictions should adopt a Nonetheless, these provisions can now still be found in Arbitration Ordinance Sr* 7. 12*19
on matters submitted to arbitration can be separated frta
po-arbitration stance. Arbitration Ordinance s.Sl governs the procedure and grounds (2) Enforcement of an award referred to in section 85 may also be refused
those not so submitted, only dial part of die award which
for setting aside an award. However, it applies only to those awards rendered by if— 4. Challenging arbitral award on ground of serious irregularity
contains decisions on matters not submitted to arbiHabra
tibunals seated in Hong Kong. The grounds therein are exhaustive. They mirror the (a) the award is in respect of a matter which is not capable of settlement
max be set aside, or (1) A party to arbitral proceedings may apply to the Coart rh^nerywg an
enforcement refusal grounds contained m UNCTTRAL Model Law art.36(lV which by arbitration under tbe law of Hong Kong;
(hr) die composition of die arbitral tribunal or die arbitral were taken from art.V of the Convention on the Recognition and Enforcement of award in the arbitral proceedings on tbe ground of serioos irregularity
procedure was not a accordance with the agreement Foreign Arbitral Awards (New York Convention! (b) it would be contrary' to public policy to enforce tbe award; or affecting the tribunal, the arbitral proceedings or die award.
of the parties, unless such agreement was in conflict (c) for any other reason the court considers it just to do so. (2) Serious irregularity means an irregularity of ooe or more of tbe foOowng
with a provision of this Law from which die parties (b> Refusing to enforce an award kinds which the Court considers has caused or will cause substantial
cannot derogate, or. faQir^; such agreement, was net a (3) If an award referred to in section 85 contains, apart from decisions on
injustice to the applicant—
Arbitration Ordinance s.86 provides the framework under which the enforcement of 12.00* matters submitted to arbitration (arbitral decisions), decisions on matters
accordance wnh this Law; cr
atonal awards may be refused not submitted to arbitration (unrelated decisions), the award may be (a) failure by the arbitral tribunal to comply with section 46;
die ceart finds that enforced only in so far as it relates to the arbitral decisions that can be
Sk Refusal of enforcement of arbitral awards (b) the arbitral tribunal exceeding its powers (otherwise than by
(!) the saibyect-mantr of die dispute is ncc capable «f separated from the unrelated decisions.
exceeding its jurisdiction);
(1) Enforcement of an award referred to in section SS may be refused if the
wOcmcat by ariatrackm under the law of dus Soar, or (4) If an application for setting aside or suspending an award referred to
person agamst whom it is invoked proves— (c) failure by die arbitral tribunal to conduct the arbitral proceedings m
t il the award *s xn conibes with die public pobey of tics Saat
in section 85 has been made to a competent authority as mentioned in
accordance with tbe procedure agreed by tbe parties;
subsection (1X0, tbe court before which enforcement of the award is
(3) A» application far sesnng aside max ncc be made after flrve (a) dial a party to die arbitration agreement was under some incapacity sought— (d) failure by the arbitral tribunal to deal with all tbe issues that were pat
grafts have elapsed dam die date cm which die pan makmc (under the law applicable to that party); to it;
diK agpbcamcBi had rsesved the award ck. if a redness hai bees
(a) may, if it thinks fiL adjourn tbe proceedings for the enforcement of
(b) dial die arbttratiou agreement was no* valid— die award; and (e) any arbitral or other institution or person vested by tbe parties with
made under article frees die date on which dial roques haft
powers in relation to tbe arbitral proceedings or tbe award exceeding
been disposed erf S die artocral tribunal (!) under die law to which the parties subjected it; or (b) may . on the application of the party seeking to enforce tbe award, order
its powers;
the person against whom tbe enforcement is invoked to give security .
(4) The court, when asied tr sss aside as award, may. where (n) (if there was no indication of die law to which die arbitration (f) failure by the arbitral tribunal to give, under section 69. m
affWfaime and so rscmesac h a party, suspend die sasagp apcement was subjected) under the law of die country where (5) A decision or order of tbe court under subsection (4) is not subject to appeaL
interpretation of the award die effect of which is uncertain or
aode proceedings far a period erf true deasrmmed h lff die award was made. ambiguous.
twtisr a pvc die arbtml tribunal an ogccrmngy to resume the 12.007 Section 86 is the general provision regarding refusal to enforce an award. Tbe specific
arfural p-oceedag or tr take each ccher acm.-rr as n the arbira grounds under s<86(l) are almost identical to s.89(2) grounds concerning refusing (g) the award being obtained by fraud, or tbe award or the way in which
Tribunal's n-munc waS eihrmnate die pounds for seeing aside (!) was nor given proper notice of die appointment of die arbitrator enforcement of Convention awards. Thus, tbe precedents applicable to Convention it was procured being contrary to public policy-.
or of die rtbitral prcceedingv. cr awards under s $9(2) are also applicable to Don-Convention, non-Mainland and non-
PJ Suhsscnat (1) hoes net a5=c3— (h ) failure to comply with tbe requirements as to the form of tbe award, or
Macao awards under s 86
tad d* power jrf the Court aa ace aside at ulutal award nndff (5) was otherwise unable to present die person's case. (i) any irregularity in tbe conduct of tbe arbitral proceedmgv or a the
12.008 However. s 86( 1) does not indicate dearly that tbe grounds for refusing enforcemo* award which is admitted by tbe arbitral tribunal or by aoy artmal
(d) sabyecs to soibstraaD (3 V dial die rward— contained in s 86 are exhaustiv e. In contrast. s.9(l) states that die enforcement of * or other institution or person vested by tbe parties web powas a
\4 dier^dctr AaTtrnpparbrrrfawardiniag {graoii-6 ctfSchadofe- Convention award “may not be refused except in the cases mentioned in this section-’0
(!) A-ak with 1 d/ffrgwrtry tKX rrgrtggripknyft by OT DOC faTTmr within relation to tbe arbitral proceedings or tbe award.
(J aphhcabic t cr die terms of die sahaissxc to aibnabcc. or
cl dm TCtr m anpea agmfl an arbc-nl award an a caesn at of 3** OP accttare damsxcs aa meres beyond die scope of the
under grant 5 rtf schaduir 2 lif wppnraibv\ sdrmssxc to m\iaa:m:
 25a RECOURSE AGAINST AN AWARD 0>TRAL PRINCIPLES D» EXPOfaCBSC AMSOR RETT TO
czsrkM. mviiHxi p** r<7f*nv, ANivoa to rMoen an aw ard xfa

Oi (3) Subject to the observance of the safeguards that are necessary in the jxfccc
14) If the award fa roamed to the arbitral tribunal, ta whole or in part, for
interest, the parties to a dispute should be free to agree oc bow foefa depute Eagbsh authority Start * Republic of KazakhsUmr'2
recoeaaideratkm, (he tribunal mmt rr>-*r » frefai award m reaped of the
should be resolved.
l*i ram* 3at sanri fa «S«t arfcfarfa anfcmi. m tele «r in fin, far (1) “Recognition oc enforcement of a New York Cuusrtoirt award ska* ad be
rtr/ai«j(n6w (4) Enforcement of arbitral awards should be "almost a master of admsnstrxne
fa) wfahfa 3 month* of (be date of the order for renriwoo; or refused except m (be following cases ... if il would be cartemj fa ptec
procedure" and the courts should be "as mechanistic as possible" (Jtr
Ob) id aUt Ik award, ■ akk « a fan; or fb) within a Wager or aborter period (hat (be Court may (bred PetroChma Intemotiond (Hong Kortgj Corp Lid). policy to recognise or enforce the award": section 103(1) rtd (3)AAfadrt
Act 1996
Id) dcdarz Ik award ImbtdM (fleet, ■ «Me or to fart 17) The Cowl matt not exercise its power to act made an award, in whole (3) The courts are prepared to enforce awards except where complawts
or is part, anJet* it fa tariffed (hat it would be inappropriate to remit (he (2) TTJbe public policy exception in section 103(3) “ nirfiard fa toe fmhiic
14) if ie award » r«M«d W fae rtmi Srib—id. M «Me or to part, far of substance can be made good. The party opposing enforcement has to
madera in question to the arbitral tribunal Cor reconsideration. policy of England (as the country in which enforcement fa soagfa) fa
nummAenunm. foe Irt—I nan nuke a frnfc award to reject of fa show a real risk of prejudice and that its rights are shown to have beta
maintaining the fan and orderly administration of justice Mmxul A Bond.
If) The leave erf the Court or (he Court of Appeal fa required for any further violated in a material way {Grand Poctfic Holdings Ud v Pacific Chn*
pp 91-92.", IPCO (Nigeria) Ud v Htgerimi Sattend Peerdemm Carp **
appeal from an order of (be Court under subaedion (5). Holdings Ud (Ho J)7)-
la) wafaai 2 atortfe <4 foe date of &c 'jrder for rsromvaa, or (3) When addressing the question whether an award has been otttned by fraud
17) Leave to further appeal must not be granted unlew— (6) In dealing with applications to set aside an arbitral award, or to refuse
Ik) ante a Wafer or darter period that foe Court nay direct or foe award or foe way in which it was procured is contrary to pubfac pokey
enforcement of an award, whether on the ground of not having been given
fa) the question fa one of general importance; or foe Court will normally- look to see whether "some form of reprehensible or
15) 7k Court anal «i octuk a* yr*et to vet aade an award or to declare notice of the arbitral proceedings, inability to present one's case, or dial the
unconscionable conduct has contributed in a substantial way to die ifetomg of
aa award to Ik of oo effect, mb whole or m part, aafaao it fa satisfied fat fb) the question fa one which, for tome other special reason, should be composition of the tribunal or the arbitral procedure was not in accordance
foe award": see Doable K Od Products 1996UdeHaste OdOYJ, ' and see Gcxer
4 would k Mtappropnaie to rant Ik matters ia question to fa rUtni considered by (be Court of Appeal with the parties’ agreement, the court is concerned with the structural integrity
Assess Ud v Hak Nafiogaz UkramyH ("That means which we would be
i faun fa for ra/oiidmfaa. of the arbitration proceedings. In this regard, the conduct complained of “must
(10) Sections 6 and 7 of Urn Schedule also apply to an appeal or farther appeal comfortable in describing as fraud, conduct dishonestly rtmrird to nrislrmf*\
be serious, even egregious", before the court would find that there was m
14) Ike leave of fa Coort or the Court of Appeal fa required for any appeal under (his section.
error sufficiently serious so as to have undermined due process {Grard Pacific (4) It may be sufficient to show that a party “had deliberately and dishonestly
from a daemon, order or doectioa of the Cowl order thfa Kctioa. Holdings Ud v Pacific China Holdings Ud (Ho If). failed to disclose [material] in foe arbitration and made submissions or calked
These means of challenging an award are, nonetheless, no longer the integral part of the 12.01]
17) kctiM 7 of thfa Schedule afoo apphet to aa application or appeal uader evidence which deliberately and dishonestly continued that concealment
•ew Arbitration Ordinance. Parties, nonetheless, may opt-in these mechanisms if they (7) In considering whether or not to refuse the enforcement of the award, the
fat section and misled foe tribunal" and that the material would have had "si important
w with in the arbitration agreement4 court does not look into the merits or at the underlying transaction {Xiamen
influence on or would probably have affected the result of the arbitrabon":
9. Appeal afadafa award oa question of law Xingjingdi Group Ud v Eton Properties UcP).
Chantiers de 1’Allantique SA v Gaztransport A Technigaz S.4S.rT
11) fubjcct to section 4 of thfa Schedule, a party to arbitral proceedings any (8) Failure to make prompt objection to the Tribunal or the supervisory court may
2. Central Principles in Enforcing and/or Refusing to constitute estoppel or want of bonafide {Hebei Import A Export Corp v Polylek (5) “[Considerations of public policy, if relied upon to resist enforcement of an
appeal to the Coart on a queertoo of law aruing out of an award made fa award, should be approached with extreme caution": IPCO (Nigeria) Ltd v
toe artfarfa proceedings
Enforce an Award Engineering Co Ud19).
Nigerian National Petroleum Corp.'*
12) An agreemeto to dttpeufa with (to reasons for an arbitral tribunal's award before turning to specific grounds of objections that a party may use in setting aside 12.0 L (9) Even if sufficient grounds are made out either to refuse enforcement or to set
aside an arbitral award, the court has a residual discretion and may nevertheless (6) “[T]here can be no realistic doubt that s. 103 of the [Arbitration] Act embodies
fa to be treated aa an a*;cement to exclude the Court’* jurisdiction undo fa sward, one should always bear in mind the general principles that the court has a pre-disposition to favour enforcement of New York Convention Awards,
fate section repeatedly enunciated in various authorities. enforce the award despite the proven existence of a valid ground (Hebei
reflecting the underlying purpose of foe New York Convention itself" IPCO
Import & Export Corp v Polyiek Engineering Co Ud").
13) The Cowl mutt decide the qoeetion of law which fa the subject of the fJ*e must bear in mind that the mechanism of leave to enforce an award for refusal in 12,011 (Nigeria) Ud v Nigerian National Petroleum Corp. **
appeal on the batia of (he findings of fact in the award fc*»g so) fa different from an appeal on procedural and/or substantial issue. (10) The Court of Final Appeal clearly recognised in Hebei Import A Export Cmp r
Polylek Engineering Co Ud2 that parties to the arbitration have a duty of good (7) For the English Court to permit a party to pursue to a trial of the issues
14) The Owrt mutt nrd cootider any of the criteria aet out in aectioo 614) fa KB v S,1 Mimmie Chan J succinctly summarised the position that (he Hong Kong 12.01* an allegation that a New York Convention award was obtained by fraud,
faith, or to act bonafide.
fefal) or III) of fail Schedule when h decidee the queation of law unde* M«rts took towards the enforcement of arbitration awards into 10 rules: normally two conditions will require to be fulfilled: Westocre bnasfmmm
eubaectioo Q), Inc v Jugoimport-SPDR Holding Co Ud.20
15) On betting an appeal under this aection, the Court may by order- (1) The primary aim of the court is to facilitate the arbitral process and to assist
with the enforcement of arbitral awards. P0I7) 2 Lfayd'i lUp 201. *m tin Sinocts* Cm l* r R&KG Timt** dW L* (2011) I AJIEJLfCrtMl
fa) confirm the award;
(2) Under the Arbitration Ordinance, (he court should interfere in the arbitration of • (2011) 4 HXLAD 604
.
| 574
Ptt>5) 2 Lloyd's R«p 326. [13) (Groa J).
f b) vary the award; ’ (2012] 4 HKLAD I % PSIO) I Lloyd'i Rep 141, [J3J (Bl«r
the dispute only as expressly provided for in the Ordinance.
• tbut . 1*001) I Uojrf'« Rap 479. (41) (Tontmaoa JJ.
fc> remit the award to (he arbitral tribunal, in whole or in p*U ft* • [2009) 4 HKLXD J53. , P01I)EWHCMU(CoB«BXl5*J«dpU](FUwJ).
reconsideration In (he light of (he Court'* decision; or " (1999) 2 HKCTAX 111 (2003) 2 Uoyd'i Rep J26, [13)
] AfUtMM• vv " tM. I36A-B I *4,1111.
fd) aet aalde (he award, In whole or in part !»!*) 210X135,(1) ° fbld 1201 fad 137B 1*000] QB 211. 309F (WMJ« U) (dumb*g m *» rmit)
 254 RECOURSE AGAINST AN AWARD GROUNDS FOR SETTING ASIDE AND REFUSING TO ENFORCE AN AWARD 255
2S2 MCWKSI AGAINST AN AWARD GROUNDS FOR SETTING ASIDE AND REFUSING TO ENFORCE AN AWARD 253
(2) To justify setting aside an arbitral award on this ground, the court has to be However, one must distinguish carefully the tribunal's case management power from 12JYL*
(I) Tbe firs: condition is Thu the evidence to establish the fraud was not knng the negotiation and conclusion of the contract, which contained the arbitration satisfied that a party has been denied due process. genuine violation of due process. The fine line between the two is addressed m P » S?
available to the parry alleging the fraud at tbe time of tbe bearing before the igreeznent. In interpreting the Canadian law incorporating tbe UNCI IKAL Model Law,
(3) For this purpose, the conduct complained of must be serious or even egregious. The Court would not interfere with what it considered to be a case management 12-02!
arbitrators": Westacrc Investments Inc v Jvgoimpcrt-SPDR Holding Co Ltd* he court did not object that the incapacity’ defence could apply. It, however, ultimately
(4) It is not possible to set out exhaustively all possible situations of denial of due decision which was fully within the discretion of the tribunal, recognizing that the
rejected it on the facts that there was no evidence of oppression, high pressure tactics
(9) The second condition is that “there is a prim a facie case of fraud which kibunal was entitled to impose terms and timetable for expert evidence to be filed
or misrepresentation.9 However, any allegation of fraud or forgery to prove invalidity process. Whether there has been a denial of due process must depend on tbe
is sufficient to overcome tbe extreme caution of tbe court when invited to nd for submissions to be made to avoid unnecessary delay and expenses Similarly,
requires a heavy burden of proof due to its serious nature.3 court’s evaluation of the relevant facts and circumstances of each individual case
set aside an award on tbe grounds of public policy”: IPCO (Nigeria) Ltd r i change in procedure not to receive evidence in the form of witness testimony was
Nigeria* National Petroleum Carp? h Daliah Retd Estate and Tourism Holding Co v Ministry of Religious Affairs of the 12.019 (5) One particular instance in which a party can justifiably complain that he was held to be falling squarely within the remit of case management in China Sola- Power
Government of Pakistan? die UK Supreme Court refused enforcement of an award on unable to present his case and thus denied due process is where the tribunal (Holdings) Ltd v ULVAC Inc? Deputy Judge Robert Pang SC said that it would take
(10) And “where perjury is the fraud alleged, ie, where the very issue before the carried out its own investigation or inquiry on primary facts, or decided a case
he ground that one party (the Government of Pakistan) to the award was not validly- ■highly unusual circumstances for a case management decision to form a valid ground
arbitrators was whether the witness or witnesses ware lying, the evidence based on a wholly new point of law or fact without giving the parties a fair
bound by tbe arbitration agreement- Under French law principles, there was no common far challenge”*
must be so strong that it would reasonably be expected to be decisive at a opportunity to consider and respond to such point
mention on the part of the parties, so as to make the Government a party to the agreement.
bearing, and if unanswered must have that result": Westocre Investment (Ui) Causation between inability to present and prejudice
This case stands for the proposition that invalidity of the arbitration agreement concerns (6) Tbe court has a discretion not to set aside an arbitral award even if a violation
Inc r Jvgoumport-SPDR Holding Co Ltd?
abo an allegation that a person or entity was never a party to the arbitration agreement, Tbe court's discretion here is subject to a further caveat. Even if there was a violation 12-021
of art34(2XaXi!) of the UNCITRAL Model Law has been established, bet
■stead of the mere validity or existence of tbe arbitration agreement. It was further held of due process and a sufficiently serious error could be shown, if it had no effect on the
12-016 The possnon can be best summarised as this In an application for setting aside or refusag this discretion should only be exercised where the court is satisfied that the
6at common law courts are vested with the power to conduct a review to a full extent outcome could not have been any different Put in another way, the party outcome of the arbitration, the Court would not exercise its discretion to set aside the
to enforce m award under the UNC1TRAL Model Law, the court would only be concerned
on the facts and law since the matter pertains to the arbitration tribunal’s assumption of seeking to set aside the arbitral award does not have to show that the outcome •ward for a non-material error. The burden is on tbe applicant to show that he had or
wah the structural integrity ofthe arbitration proceedings.24 Tbe focus is one of due process,
jorisdictioc under a potentially invalid arbitration agreement. would have been different had there been no violation of that article; it suffices night have been prejudiced by the error.40 Courts have applied high standards regarding
doc the correctness of the arbitral tribunal’s decision. Tbe court would guard against any
for that party to show that the outcome could or might have been different he burden of proof that notice was improperly given. For example, an Australian court
disguised or sadenloor attacks on the factual decision and assessment of evidence made by The death of a party, nonetheless, would not render him incapable of being a party 12.020
rejected a party’s insistence that it had never received notice of the arbitration when the
the arbitral tribunal.9 The remedy is not an appeal as to the substantive merits. to arbitration. An arbitration agreement is not discharged by the death of a party and (7) Ultimately, in considering whether a party was ‘’unable to present his case”, carrier’s records showed that someone signed for the papers even when the addressee
■ay be enforced by or against the personal representatives of that party.* Yet, on the the question is one of fairness in the arbitral process. himself was ov erseas at the time of delivery.41
dissolution of a company, the arbitration agreement becomes a nullity.11
3. Grounds for Sitting Aside and Refusing 12.022 That said, in order to succeed under this ground, it is not necessary for a party to Care must also be taken to distinguish between an appeal on tbe substantive merits and 12.02*
to Enforce an Award (b) Lack of notice and due process violations and infringement show any form of dishonesty or reprehensible conduct by the arbitral tribunal or of an assessment of the fairness of the arbitral process. Such was the point made in Tronic
of right to a fair hearing the other side. btemotional Pte Ud v Topco Scientific Co Ud? where the plaintiff argued he was
(a) Incapacity of party and invalidity of arbitration agreement prejudiced as his application to inspect the originals of tbe documents, equipment and
(I) General principles (li) Serious and egregious in nature for Inability to present toaterial relied upon by the defendant was rejected. This argument failed as the parties
12-317 This ground is defined under UNCTTRAL Model Law art34(lXa)0) as where “a p«ty bad the opportunity to make submissions in relation to the inspection
h Pang Wai Hak v Hua Yunjian? Recorder Anderson Chow SC” provided a useful 12.021 12.023 The inability to present one’s case must be serious and egregious in nature. In Sun Tian
to the arbitration agreement referred to in article 7 was under some incapacity; or the tommary after an extensive review of relev ant authorities :14 Gang v Hong Kong A China Gas (Jilin) Ltd? the applicant applied to set aside tbe
said agreement is not valid under die law to which the parties have subjected itor, (hr) Arbitral tribunal making decision on own volition
(1) In determining whether to set aside an arbitral award on the ground that a party award alleging that he was under detention in China when the notice of arbitration was
fading any indication thereon, under die law of this State." The burden of proof falls
served on his address. As the applicant was not possible to attend the arbitral proceeding, Recorder Anderson Chow SC41 in Pang Wai Hak v Hua Yuryiart44 held that the “unable 123123
on the party opposing recognition and enforcement. In Dardana Ltd v Yukos Oil Co? was unable to present his case under art.34(2XaXii) of the UNCI I KAL Model
nor to instruct any authorised agent on his behalf, the error and conduct had deprived b> present his case” ground is not limited to situations where a party is prevented from
it was held that once the party seeking to enforce the award has provided prime foot Law, the court is not concerned with tbe substantive merits of the dispute,
him of the fair opportunity to consider the evidence and to present his case. The court presenting legal arguments or deal with evidence on an issue going to the substantiv e
evidence of the existence of the arbitration agreement, die burden shifts to the part) or die correctness or otherwise of the award. This is because the court is not
considered that the allegation is sufficiently serious and egregious for the court to find Bents of a case but may extend to a situation where a party is prev ented from presenting
exposing enforcement to prove any of the grounds for refusal bearing an appeal from tbe decision of the arbitral tribunal.
that the ground in UNCITRAL Model Law art34(2XaXii) is established. In allowing bis case oo a procedural issue which is taken by the arbitral tribunal against him of the
12.013 Insofar as the incapacity of individuals is concerned, in tbe Pmadim case of Gran BL the application, Mimmie Chan J said that:* fribunal’s own volition.
fotemtxicnal Inc v DLT Holdings Inc, a party opposed recognition and enfoccemert * DLT utc (»oii 199 nu a rm 133. [20061 2 AS EX
on grounds that rt <bd not have the opportunity to obtain independent legal advice ■ pnouptu “To depriv e a party against whom claims are made of any fair or real opportunity
a EzpuiCoLtdrrtmHotfBCCT 19-2001. [2001] HKEC 1671V to know the case and evidence given against him, and to correct or contradict the
nan statements made which affect him. when he is unable to do so or prevented by
(HOCT 39/2014. [2015] KKEC17071
• [3»l«] I IWImV nSliCfcHU-Cadt ld i r tiorrij [1927] AC 252 circumstances bey ond his control from doing so. would be shocking to the court * * 03CMR 1191/2013. [2015] HKEC 23791
POITJ 4 HKLRD 113. j " **.[»i
conscience and our fundamental conceptions of justice."
Aiteltew CrtoWPoafie HolArngt Ltd w Pmafic Oomo mfdWgt Ltd (So 1) [2012] 4 HKLRD 1
L* r Pmc*K Chmm Hmidmg, Ltd (So t) [2012] 4 HXUtD 1. Sod tract At toCermoag w6atttt Bnowck Bootug A frPvtrtit Corp * ‘ * UT tmdmttnd Borhod (Utdtrmm) r 0— [2004] NSWSC «20
o ud rxxrr aratu pci 4] hoc C5i 1 Co Ltd poll] 1 HKLRD 707. Botfioc* (Cyptw) Ltd * Btmttm Sopptmg Co Ltd (Vu Ptm^Jca) [2002) * [2017] 4 HXC 411
i*d atecr sr»io. ptts] hkic sm 2 Ltoytf-i Rep 611. Grmtd Pocfk Hoidmg, Ud * Poo** O+m HoUngt Ud (So 1) [2012)4 HKLRD 1. Hooe***? ■ [2016] 3 HKLRD 221
mdmnrr » p006] I AC 221. PH Corpr Prodmat Co Ltd w CmpB Ho-g Ctug Ud [1995] 1 WLR 404. WorAtoxmgh tooomrmun Ud w S Pobtroa* A Sent - IStd, [59] 12012] 4 HKLRD 113
PtC«l I A* EX K13. [3S] al (47). Jra [20J7] I A1 EX m) U! (TfoUb^xJ Ltd [200J] 2 EGLR 149.136 LJX Lootho Htfkkud,Dnofofmmo At+ortry r Iwprrg-lo Sp.4 [2006)
poaqiAint >•19 1 AC 221. 236-233 (Lord Suy%\. ABB AG • HcdoufAirport GmbH 1 AS ER(Cooa) 529
 258 RECOURSE AGAINST AN AWARD GROUNDS FOR SETTING ASIDE AND REFUSING TO ENFORCE AN AWARD
256 RECOURSE AGAINST AN AWARD GROUNDS FOR SETTING ASIDE AND REFUSING TO ENFORCE AN AWARD 257
which provides that a court “may” refuse recognition and enforcement. It is worth (e) Award not binding, set aside or suspended
12.029 In Zermalt Holdings SA v Nu-Ufe Upholstery Repairs Ltd**' Bingham J*4 described (c) Outside or beyond the scope of the arbitration agreement mentioning that there arc potential overlap and interaction with the “contrary to public
the proper procedure that on arbitrator should follow when met with a point that he policy” ground (addressed later in Section 3(g)). An award is “binding” when it is “no longer open to an appeal on the meritsFurther 12DC
This ground is a mirror image of New York Convention art.V(lXc). It concerns awards 12.033 support for the proposition is provided in Diag Human SE v Czech Republic,m which
considers to be relevant and important but not addressed by the parties: that "deals with a dispute not contemplated by or not falling within the terms of the 12.038 The rcstrictivcncss is best demonstrated in cases that have enforced awards even when provides that if an award is subject to "ordinary” recourse, it will not be binding.
submission to arbitration, or contains decisions on matters beyond the scope of the the composition of the tribunal deviated from the parties’ agreement. For instance, the Despite the various formulations, these approaches to assessing the binding nature of
“If an arbitrator is impressed by a point that has never been raised by either side, jubmission to arbitration”. In short, it is a complaint that the arbitral tribunal has acted former Hong Kong Supreme Court enforced an award rendered in China, despite its in award are not necessarily mutually exclusive. For instance, in Societe Nationale
then it is his duty to put it to them so that they have an opportunity to comment. ultra vires (ie, in excess of jurisdiction). members being selected from a different list of arbitrators from what was provided in d'Operations Pitrolikres de la Cote d’Ivoire Holding v Keen Uayd Resources Ltd.
If he feels that the proper approach is one that has not been explored or advanced
In assessing the scope of the arbitration agreement, the court has constantly adopted a 12.034 the agreement.60 where the place of the arbitration was Paris, and after declaring that an award should
in evidence or submission, then again it is his duty to give the parties a chance to
comment ... It is not right that his decision should be based on specific matters contextualised approach. In Grant Thornton International Ltd v JBPB A Co,u it was be considered as binding “if it is no longer open to an appeal on the merits”, the court
12.039 The article is silent as to the types of procedural irregularities that should lead to
which the parties have never had the chance to deal with. Nor is it right that a party held that the scope of the submission to arbitration was to be informed and defined by referred to both the arbitration rules and the provisions of the French arbitration law to
a refusal to recognise and enforce. A possible approach is to ascertain whether the
should first Icam of adverse points in a decision against him. That is contrary both the respective cases put to arbitration by the parties as a whole. One could look to the determine whether the award could be subject to an appeal on the merits. In other cases,
alleged irregularity substantially prejudiced one of the parties. In China Agribusiness
to the substance of justice and to its appearance.” request for arbitration and any statements of defence. national courts refrained from applying the requirements of the law of the seal when
Development Corp v Balli Trading,6' the court enforced an award where the tribunal
these requirements would have led to a result contrary to the purpose of the New York
A common argument for establishing the excess of authority ground is that the tribunal 12.035 applied a revised set of procedural rules that had superseded those provided for in
12.030 Nonetheless, it does not mean that an arbitrator has to deal with each and every single Convention, for instance, a requirement that the award should be granted a national
has failed to give a reasoned award pursuant to the requirement under UNCITRAL the parties’ agreement, holding that the party opposing enforcement had not suffered
fact, point and argument put forward by the parties before it could be said to have given exequatur to become binding.
Model Law art.31(2). Such was the argument run by Counsel for the plaintiff in Arima sufficient prejudice to justify a refusal. Where the arbitration was held at a different
an opportunity to the parties to respond. Popplewell J in Reliance Industries Ltd v place than that was agreed, and a party had refused to participate, the different location The fact that an action to set aside the award still lies in the jurisdiction of the seat does 124>C
Photo\’oltaic A Optical Corp v Flextronics Computing Sales and Marketing (L) Ltd."
Union of Indid*1 held that there is always a distinction between “lacing an opportunity" did not impact upon the fairness of the proceedings, as the wording of the arbitration not make the award non-binding.70
However, Barma JA rejected that contention on the basis that whilst considering the
to deal with an issue nnd "failure to recognise or take” the opportunity to deal with it. agreement had not made it abundantly clear that the parties regarded the venue as
sufficiency or adequacy of a short reason given, the court is entitled to have regard
It would be sufficient if the arbitral tribunal gave the parties the opportunity to make critically important.61 The court in American International Group Inc v X Co° was (0 Non-arbltrabllity
to the circumstances of the arbitration, and in particular the manner in which the
representations, which were "in play” or "in the arena” of the proceedings. The essence reluctant to investigate into the substantive merits of the dispute under New York law,
matter was dealt with by the parties to the proceedings. The parties can be expected to Regrettably, unlike other jurisdictions, the Arbitration Ordinance is silent oa its 12.04*
is whether the proceedings and, eventually the award, contains, using Tomlinson JV where the procedure adopted by the tribunal was allegedly contrary to New York law.
know how they approached the issue and the nature of such arguments they have put definition and does not include a list of non-arbitrable matters. There has also been little
figurative expression, all the “essential building blocks” when reaching the conclusion.** Since the tribunal had made a genuine effort to apply the relevant New York case law,
forward in relation to it. The learned judge further denied that a more onerous duty Hong Kong case law in this regard. This ground is mirrored by New York Convention
the court refused to set the award aside. Similarly, the substantive merits of a tribunal’s
12.031 Similar situation occurred in Brurwvick Bowling A Billiards Corp v Shanghai Zhonglu to give reason propounded in Flannery v Halifax Estate Agencies Ltd” is applicable, «rt.V(2Xa), which enables the courts of a Contracting State to refuse recognition and
decision to depart from pre-existing agreed procedure to avoid unnecessary delay and
Industrial Co Ltd I .am J” held that whilst arbitrators must have the autonomy in drawing because Flannery is distinguishable from the present case as Flannery involves more enforcement of an award if they find that the subject matter of the difference which led to
expense caused by a party changing its case should not be questioned.64
inferences as they deem fit and were entitled to depart from the positions advanced by the sophisticated analysis by expert witnesses. the award is not capable of settlement by arbitration under the law of the country where
parties, on primary factual disputes, arbitrators had to act on evidence and give reasonable 12.040 Courts have considered that where a party failed to object to the incgular arbitral recognition and enforcement are sought The Singapore Court of Appeal in Larsen Oil
Parties have also successfully challenged enforcement of awards on the ground that an 12.036
opportunity to the parties to put forward their respective cases on such evidence.” proceeding, it will be barred from invoking this defence. In a Singapore case, the and Gas Pte Ltd v Petropod Ltd71 has held that the disputes arising from the operation
award was based on an underlying contract which was not within the subject matter of
court held that were a party chose deliberately not to participate in an arbitration, of the statutory provisions of the insolvency regime per se as non-arbitrable. Similarly,
12.032 Although it was held that the fuilure to canvass the issue of contractual validity under PRC the arbitration agreement. Although an arbitration agreement may extend to contracts
it had waived its rights to criticise the way in which the arbitration proceeding had in Exeter City Association Football Club Ud v Football Conference Ud,n the English
law with the parties and to give them an opportunity too was a valid ground of complaint which are not explicitly included within its scope, such extension is not automatic,
been conducted.65 Similar conclusions have been reached in England as it would be High Court held that there are certain statutory rights that are “inalienable and cannot
under arl.34(2XaXii). the Court exercised its residual discretion under art.34 to uphold the but instead hinges upon the intention of the parties.” In rejecting a challenge under
"impossible to submit that any failure to comply with the agreement of the parties as to be diminished or removed by contract or otherwise". This includes an action under
award, as it was satisfied that the tribunal would not have reached a different conclusion New York Convention art.V(lXc) on the basis that the award addressed parties who
venue had any prejudicial effect as far as (the party] is concerned.66” English Companies Act 1985 s.459 that the company’s affairs were being conducted in
but for the matter complained of. This was one of those cases where a tribunal gave several wrre not bound by the arbitration agreement, the English court explains that the tribunal
reasons for an award, and the result would be the same in light of the other reasons given.' did not make any award in their favour or any determination with respect to the rights 12.041 The standard of proof for establishing arbitrator bias has been repeatedly emphasised » manner prejudicial to the shareholder’s interest.
of those parties.” The court in Logy Enterprises Ltd v Haikou City Bonded Area Wansen Products Trading Practically speaking, it is likely that there will be significant overlap between the “non- 12.045
Co67 found that the party opposing enforcement had failed to prove its allegation that •rbitrable" ground and the “public policy” since they deal with matters of similar
•’ (I9IJ)2E0LA 14.1 J. confirmed to Grtndmd Shrpptng Pie Ijd v Htimda! Mtnhmu Mart,,, Co L/</ (2011) EWHC I2M
(d) Irregularities in the composition of the arbitral tribunal or the tribunal’s deliberations had been affected by the alleged bias of one member.
• Al Lftfd lllAltal WB| the arbitration procedure
• (2018) ! Lloyd's Kfp 56 2. ating OAO Nonhim Shipping Co v Remoteadorn Je Marin SL (The Remmat) |?00*) -
Uoyd'i * cp 50} (Glottfli I. •• Glo«t«r LJ ibcu vat). Lotosho Hlghlomlt Development Authority v Impregho SpA (2006) This ground is mirrored by New York Convention art. V( 1 Xd). Courts have applied it in 12.037 • SocUH Hartonah dOpdranens Pfrrohkres de la Cdte d hatre Holding r Keen Uayd Resources Ltd (HCCT 55-"2001
I AC 221. htetMh Ud v Aiden Shipping Co (The \)metru) (1914) 2 Uoyd'i Pep 66. 76 (Ackocv U. ai Lofd Ad** •restrictive manner, adopting a non-formalistic approach.”This is consistent with the (2002) HKEC 77)(BmratI).
thm mi), z.rmo), Holding, SA r Nu-Lfe Upholstery Repairs Lid 11915) 2 EGLA 14.15 (Bingham J. u - IM * (2014) 2 Uoyd'i Rep 213
tfe« •*%%]. ABB AG v HoehntfAirport GmbH 11006] I All ER (Como) 529
general discretion of courts to refuse challenges under New York Convention art. V( 1), •' 11991J 2 Uoyd'i Rep 76 ' IPCO (Nigeria) Ltd v Nigerian National Petroleum Corp (2005) 2 Uoyd'i Rep 326 (dul fee ippbcaftan of mx V(J)
- Attn AG V Hochtlif Airport GmbH (2006) I All EX /Comm) 529 *’ Tbngyium (USA) International Trading Group » Um-Clam Ud (QBD (Comm). 19 January 2001 \ (•) II Dot triggered ■utoniticaUy by ■ challenge bong brought before ■ cowl in the country of on pa). Camemamei
" Seepern II 0II-II034 •* (HCCT 60/2015. (2016J HKEC 1996). Traisfen Technique Ud * Federal Government of Nigeria (2009) EWHC 2191 (Comm) (that art.V(l*e>
• [2011)1 HKLRD 707 (HCCT 130012. (201 J) HKEC 477) “ Pacific China Holdings Ud v Grind Pocific Holdings Ud (2011) 4 HKLRD 1II only epphet where the awnd T>»i been ter mde or nupended' end noting dm Ike fact that (here u an epphenaon »
" Al Lam V-P (hen m« (CACV 194/2012. (2014) HKEC 961) •' Re Arbitration Between Hainan Machinery Import and Etport Corp end Donald A McAnhy Pit Ud [1996J1 SLX J4 •a and* an award doei not mean that the award hai been Mt ende")
u Bnmnick Bowling A Bilhonls Corp v Shanghai Zhonglu Industrial Co Ud[2011)1 HKLRD 707. (26) [2000) I WLA 377 “ Tongyuan (USA) Iniemotional Trading Group » Unt-Clam Ud (QBD (Comm). 19 Jnmary 2001). ” (2011) 3 SLR 4)4.
• BnmswUk Bowhng A Billiards Corp v Shanghai Zhonglu Industrial Co Ud [2011) I HKLRD 707. [J»H4I). *** ** Tori Alrxondinonmg A Rtfngtranon Inc v Lam Kwat Hierg (1995) 2 HKLR 256 •' (1997J2HKC4II ' (2004) I WLA 2910
nUUo lmosrmem Ltd *• lOoth*, East Asia tId] 1993) 2 IfKLR 39. FoivPG Well/alr L/</[l9ll)2 Uoyd'i 5tf Deutsche Schachibau-und De/bolngesellschqfi mbH v R'as al Khatmah National Oil Co [1917) 3 WLR 1023
Bu!fratht fl '\pnts) IjJ r Bonnot Shipping Co ltd (2002) 2 Lloyd'i Re? 6* 1 China Nceihal 0,1 Joint Street Corp Shenzhen Branch v Gee Tat Holdings Co Ud (1995) 2 HKLR 215.
 262 REC OURSE AGAINST AN AWARD ENFORCING AN ARBITRAL AWARD R]
260 RECOURSE AGAINST AN AWARD GROUNDS FOR SETTING ASIDE AND REFUSING TO ENFORCE AN AWARD 261
that this was to some extent true in the civil law context, it does not sit well with the (b) Mainland awards
concern In Larsen Oil and Gas Pte Lid v Petropod Ltd,” it was accepted that there ii Although the defence of public policy allows courts to consider the merits of the 12.04' reference to “reprehensible and unconscionable conduct”. The court considered that
a presumption of arbitrability that the words of an arbitration clause are wide enough iward, the scope of such review is not without limits. The defence docs not furnish an "dishonesty” means something more than recklessness in this context.92 "Mainland awards" are “arbitral awards made in the Mainland by a recognised 124*1
to embrace a dispute, unless it is shown that legislature is intended to preclude the opportunity to the party opposing enforcement to reargue the merits or to allege that the Mainland arbitral authority in accordance with the Arbitration Law of the People's
use of arbitration for the particular type of dispute (os evidenced by the statute’s text case was wrongly decided.41 12.055 In approaching a complaint for fraudulently obtaining an award, the court will bear Republic of China.97" This type of awards deserves separate treatment since they are
or legislative history), or that there is an inherent conflict between arbitration and the in mind the said higher standard of proof on an allegation of fraud. In Chantien de neither foreign awards that fall within the scope of the New York Convention nor
Where the procedure followed in the arbitration suffered from serious irregularities, 12.05* L ’Atlantique SA v Gaztransport & Technigaz SAS,n the court reiterated that this does domestic Hong Kong awards.*4
public policy considerations involved in that particular type of dispute.74
enforcement may be refused. It is common for courts to review awards for fraud, not mean that the standard i9 somewhat different from the conventional standard of
bribery or some other significant due process irregularity.44 If a Mainland award is not fully satisfied by way of enforcement proceedings taken 124*2
(g) Contrary to public policy on the “balance of probabilities", rather, it means that the explanation is more likely
in Mainland, or in any other place other than Hong Kong, the remaining part of
The Court of Final Appeal in Hebei Import A Export Corp v Polytek Engineering Co 12.05 to be human error than dishonesty. In any event, an applicant has to show that the true
12.046 The term “public policy" docs not lend itself to a precise definition. In Hebei Import A it can be enforced.99 This mirrors art.2 of the Arrangement Concerning Mutual
Llf' was frank and candid in acknowledging potential duplication and overlap of the position, or the absence of the fraudulent acts, would have probably have affected the
Export Corp v Polytek Engineering Co Ltd” the leading authority on this ground, Enforcement of Arbitral Awards between the Mainland and the Hong Kong, avoiding
outcome of the arbitration in a significant respect.94
pounds. The court observes that it hns become fashionable to raise specific grounds double recovery as a result of enforcement procedures in both Hong Kong and the
the Court of Final Appeal narrowly interpreted the meaning of "public policy" as the
tbit are directed to procedural irregularities, as public policy grounds. There is nothing Mainland.
fundamental conceptions of morality and justice" of the forum in which enforcement I
inherently objectionable with this approach.
was sought. An alternative formulation is that it encompasses cases where “the 4. Enforcing an Arbitral Award
enforcement of the award would be clearly injurious to the public good or, possibly, Nonetheless, a substantive complaint will not be entertained as a public policy complaint 12.05: (c) Macao awards
enforcement would be wholly offensive to the ordinary reasonable and fully informed tf the enforcement stage if it existed at the time of the arbitral proceedings and it could 12.056 The recognition and enforcement of arbitral award are governed by Arbitration Enforcement of Macao awards is regulated under Division 4 of Arbitration Ordinance 124*3
member of the public on whose behalf the powers of the state arc exercised”.74 hive been raised before the arbitral tribunal.44 A party that failed to raise a procedural Ordinance Part 10, which includes four divisions: Division 1 (Arbitral awards that are Part 10. A "Macao award" is an “arbitral award made in Macao in accordance with the
12.047 The ground is to be narrowly construed and must not be seen as a catch-all provision
irregularity with the tribunal whilst it could do so has waived its right to do the same at
the enforcement stage.47 For example, concerning allegations that the award was procured
I not Convention awards. Mainland awards or Macao awards); Division 2 (Convention irbitration law of Macao”.100 The provisions on the recognition and enforcement of
to be used whenever convenient. It is limited in scope and is to be sparingly applied.77 awards); Division 3 (Mainland awards); and Division 4 (Macao awards). Macao awards are substantively similar to those applying to Mainland awards.
In Xiamen Xingjingdl Group Ltd v Eton Properties Ltd,7* it was held that unless an
award was plainly and obviously oppressive to order a party to comply with it, it could
not be deemed contrary to public policy. The high threshold imposed sits well with
through fraud, the English courts have held that it is inappropriate to refuse recognition if
(he relevant evidence was available at the hearing or if the allegation has been raised and
his been rejected.44 Given the pro-arbitration stance in both F.ngland and Hong Kong, the
court would hy their best endeavour to make an award enforceable. Thus, if an award
a 12.057
(a) New York Convention awards
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(d) Other awards
An award under this category is enforceable in the same manner as a judgment of the 124*4

a
Hong Kong’s pro-enforcement culture. In A v R (Arbitration: Enforcement),7* Reyes J applies to Hong Kong since the People’s Republic of China is a party to it As defined in Court that has the same effect, but only with the leave of the court.10’ An application
contained an objectionable part it would be absurd if the remainder of the award would also
said that: Arbitration Ordinance s.2, "Convention awards" are awards made in states or territories for leave to enforce is made ex parte with a supporting affidavit100 and full and frank
fill altogether.49 Such a draconian approach would be incompatible with the underlying
which arc party to the New York Convention, other than China or any part of China. disclosure of all relevant information.101 A summons might be issued where the Coon
principles of the UNCITRAL Model Irw and the New York Convention. Ihereforc,
“If tho public policy ground is to be raised, there must be something more, that is, considers it appropriate hearing submission in an inter partes hearing.
icvcrance is possible so long as the award comprises distinct findings that could be severed. 12.058 It is enforceable in Hong Kong by action in the Court or in the same manner as an award
a substantial injustice arising out of the award which is so shocking to the Court's
to which the general provision of s.84 applies.97 This is a matter discretion, not as of right However, it is rare for courts to refuse 124*5
conscience as to render enforcement repugnant." The court has repeatedly held that in order for a party to succeed in setting aside or resisting 12.05.
; enforcement, which is only done under “unusual circumstances”.104 As the leading
enforcement on the basis that the award was obtained by fraud or in a manner contrary 12.059 A Convention award is enforceable if the state or territory in which the award was made
12.04R It has been well recognised that public policy refers to the public policy of the forum ftithority on this issue, it was held in Re PetroChina International (Hong Kong) Corp
to public policy, it would not be enough to show that one party inadvertently misled the is a party to the New York Convention at the date when the proceedings to enforce the
state40 However, increasingly various jurisdictions recognise that a violation of other, however, carelessly. The court looks for some form of dishonest, reprehensible or award began. It does not matter that the state was not a party on the date the arbitration
1 D<rMthat:
1
domestic law is unlikely to suffice for refusing enforcement on public policy grounds." unconscionable conduct that has contributed in a substantial way to obtaining the award.90 agreement was concluded or when the award was made.
Pie position of Hong Kong courts is nevertheless that a transnational definition of the “So far as Hong Kong as the enforcement jurisdiction is concerned, it should
In Celtic Bioenergy Ltd v Knowles Ltd*' the applicant submitted that a false statement 12.05* 12.060 To enforce a Convention award, the following evidence has to be produced:94 adopt as mechanistic an approach as possible, and should not second-guess the
concept of public policy unworkable, and the public policy to be considered remains
made recklessly would constitute a dishonest statement. Whilst the court accepted intention of the Arbitral Tribunal ... It is therefore dangerous and indeed wrong to
that of Hong Kong.41

* Qtnhuaigdoo Tongda Fnretpriie De\*lof*neni Co v Million Ba,ic Co Ltd [199)) 1 HKLR 173
« (1) the duly authenticated original award or a duly certified copy of it;
(2) the original arbitration agreement or a duly certified copy of it; and
go behind an arbitral award and get embroiled in the underlying dispute between

" (7011) 9 S1JX 414 i 9 Gottr Alien Ud v Nok Nqflogaz lAralntv (2001) I LJoyd'i Rep 479, WtUacr* Im-eilmenll Inc r Jugoimport-SPDR
* /M</.|44)(*<,akJA) " Ibid. > 2(1).
Holding Ud (2000) OD 211. Karttha Boda, Co LLC v Peiuiahnan Ptnombangan Mlirrab Dan Gat Eton! Ntgota (3) if the award or agreement is not in either or both of the official languages, * Ng Frarg Hcmg Ud e ABC [\9)l\ 1 HKLRD 153
" (1999) 2 HKCFAR III. follow*! id Goo Hetym r K*tnr>* Holding, Ud (2012) I HKLRD 617 ind GrxoUon No"""*
1 (Ptnamtna) (HCCT 21/2002. (2003) HKEC 311)
Bnoontt Co Ltd y Atmlco Metal, hit,-national Ltd (HCCT 9/2012. |20I2] HKEC 1616) (ta r*tp*rf of MwW*®4 ' (1999) 2 HKCFAR III. a translation of it in either official language certified by an official or sworn * AiUttatou OiihuDCa a 9).
awafdl) " Sohtco SACI y Noroktcnelik Aluminium Plant (1991) 2 Lloyd’l Rep 337 translator or by a diplomatic or consular agent. * n*d,*n\y
* lHunch* Sthachtbaoieid Tle/bohijeiellitha/1 mbit v Shtll hut man anal Ptnoltum Co Ud ( 1990) I AC 29 J. * Ibtd.tU
9 Gao Hatvan v Keeney* Holding, Ud (2012) 1 HKLRD 627
" AvK (Aibiliaeton ktt/orxemtnt, |2009) J HKLRD 319 9 Wutacre JitYurmonu hie v Jngotmpoti-SDPR Holding Co Ud (2000) QB 211. Afliimtlah Germany GmbH v Fttxo Steel m Role* of the High Coort (Cap 4 A, Sob Leg.) O 73110, Zheflcmg Province Garmme Import meet Export Co * Stammam A
Co (Hong Kong) Trading Zx/(HCM? 144/1992. (1992 HXLY J«>
* (2001) 4 IfKIRD 972
" |2009) 3 HKLRD 319. (23)
" IFCO (Nigeria) tJd y Nigeria} National Petroleum Corp (2003) 2 Lloyd'i R*p 326. Goo Han an v Kernel* HoM*P
/A/(I999) I All ER(C«ni»)3IS.OwntHm</» Tautmentetdt PalorltationSA y llilmanon Ud[\W)\ 2 All ER(Comxn)
146
I * JJAgrv IndHitru, (P) Ud y Tnuno International Ud [\99i] I HKLR 19.
a " Ibid.. |I03)-(I04)
" (20IIJEWHC 3313 (Comm) (Fleur I)
* Frcomm Ud r AhmedAbdulla* Bamoodah (The St Raphael) (1913) I Lloyd* Rep 403. Cuner-e
Harkutwrdaa A Co (1992) 2 Lloyda Rep IM.
CoBTyJ

** Celtic Btoenerjy Ud y Knonle, Ud [2011) I All ER (Comm) 601 " Standard Ctn! Enffnerrlng Co r A'/omnOeoeral [1916) HKLR 1143. Mrddlrmio A GomU r Horritpao/ Corp PVT?)
ltd (2012) I ICKLRD 627 i * trouble K Oil Product, 1996 Ud v Neiie Oil OYJ[V)\Q\ I Ltoyd'i Rep 141. (33). Cxfitt Chartering yCatv,net Shipping
" Aibibmoo Ordinance • 17(1) 1 WLR 1643
•' Far (h« typt o»ih taken In Auitjalji ki faint Fum/te SA v BaleQt Col* Induttn Pvt Ud (No 2) (2012) 201 FCR

A
Co Ltd (2001) I All ER (Comm) 39*. |I2). Prafilafl Italia SH v pain* Webber Inc (2001) 1 All ER (Comm) 1065. - Ibid. ill.
" Hebei Itpon 4 Bxpotr Corp v Poheek Engineering Co Ud( 1999) 2 HKCFAR III. t/Braiiag tbt approach lak« ** 91 (2011) 4 HKLRD 604
tlekrrtm SA y Hvendi Vntvtnal SA (2007) 2 All ER (Comm) 363. |36)-(37]
Suprnn* Court of India in Bemuogar Poner Co Ud v Gnu ml Un me Co AIR 1994 SC *60 | " (2011) | AUER (Comm) 601
J
 264 RECOURSE AGAINST AN AWARD INDEMNITY COSTS UPON UNSUCCESSFUL CHALLENGE 265

the parties or an arbitral tribunal's reasoning for its decision. Put another way, Similarly, in Karaha Bodas Co LLC v Perusahaan Pertambangan Minyak Don Gas 12.069
this case illustrates the importance of adhering to the mechanistic approach at the SvmiNegara"1 an indemnity cost order is made against the appellant in an appeal to
recognition stage.'0*” >uy a cost order nisi, considering the fact that the appellant had continually taken steps
K> delay and obstruct without real merit the enforcement of an arbitral award made
12.066 The limited circumstances under which leave had been refused include the following: tgainst it.
This is in line with the arbitration-friendly policy of Hong Kong. Parlies to an 12.070
(1) Real grounds exist for doubting the validity of the award;1"
irbitration agreement should expect the court to recognise and enforce the agreement.
(2) The award is in a form that is incapable of enforcement as a judgment1* (eg, the If they took the risk of instituting court proceedings in breach of the agreement, they
award does not specify’ a stun to be paid); and should expect to pay costs on a higher scale if they failed. Such attempts do not
accord with the underlying objectives of Civil Justice Reform, as the parties and their
(3) The award requires payment in a foreign currency.1*
lawyers are obliged to assist the court in the cost-effective and efficient resolution of
a dispute."4
12.06” When a party failed to obtain lea\a, one should also bear in mind the availability of a
cause of action at common law. where enforcement is permissible upon satisfaction of
the following, albeit with a considerably higher burden of proof upon the applicant:"* APPENDICES
(1) The agreement contains the submission to arbitration;
(2) The dispute arose within the terms of the arbitration agreement;
(3) The tribunal was duly appointed in accordance with the arbitration clause;
(4) The award was made; and
(5) The amount awarded has not been paid or the award has not otherwise been
performed.

5. Indemnity Costs upon Unsuccessful Challenge

12.068 Where a party unsuccessfully challenges or resists enforcement of an arbitral award

or an arbitration agreement, costs will be awarded on an indemnity basis.1" In A v R
tArbtrrarion Enfcrxrmon),"- Reyes J emphasised that parties who agree to arbitrate
should not hi\ e to face unmeritonous challenges to their awards. If a losing party’ pays
costs on the comrntional party-and-party basis only, the winning party is “effectively
subsidising die losing party's abortive attempt to frustrate enforcement of a valid
award”.

Cmm* ue r VMM/ AW cfPJsacm [If'?] Q3 9

J C# K.T) l* [Mi] 1 W1A 391
0rFetMm rirrs] QB 9
4 C» p*:r ] KB «91. Ok* » . Thj* 0923) It Ll L 262. Fnmi Ft* 4fi>:
4 r» (I12 Ll L Krp *73,1
*»»ll954]lQBa,lta.J
4 CtLd [19»J 2 Q8 JA4£«*=n 4 GomUti
Gbp(19T3| IWIB IMS ** (CACV 121^003. P00I] HKEC 1007X
FhIaJ* AA Sts' J!lii [2016] I KKULD 5D ** A r K (Arimnc* Fjjorctmt*) [2009] 3 HKLRD 319. Geo Haryem r Kttnc.t HoldLid [2012] 1 HKLRD 627,
pawj J HOJtD M9
Grtmd Pacific HelArgt Lid * Pacific Chtoa Hoidxrp Ltd (No 2) [2012] 4 HKLRD 369

I
4
 270 APPENDIX I APPENDIX I m

6. If in the course of the mediation the Mediator becomes aware of any Dispute and the mediation; nor will the Mediator act or agree to ad at a
Appendix 1 circumstances that might reasonably be considered to affect the Mediator’s witness, expert, arbitrator or consultant in any such process
capacity to act impartially, the Mediator must immediately inform the Parties
AGREEMENT TO MEDIATE 14. No verbatim recording or transcript of the mediation will be Bade at any fora.
of these circumstances The Parties will then decide whether the mediation
This Agreement is made on 31 August 2018. will continue with that Mediator or with a new mediator appointed by the TERMINATION OF THE MEDIATION
Parties.
BETWEEN the following persons ("the Parties") 15. A Party may terminate the mediation at any time after corwalUiiop «ih the
COOPERATION BY THE PARTIES Mediator.
Sino-Pac Chips Corporation Diode Brilliant Supplies GmbH
Contact No.: 2222-2222 Contact No.: 3333-3333 16. The Mediator may terminate the mediation if, after conaaitatsan Ac
7. The Parties agree to cooperate in good faith with the Mediator and each other
3301 Smart Commercial Building 131 Diligent Industrial Centre during the mediation. Parties, the Mediator feels unable to assist the Parties to achieve resofcabam of
123 Clever Road 456 Hard Work Street the Dispute.
Hong Kong Kowloon A UTHORITYTO SETTLE AND REPRESENTATION AT THE MEDIATION
SETTLEMENT OF THE DISPUTE
SESSION
AND THE MEDIATOR (“the Mediator")
17. No terms of settlement reached at the mediation will be legally bsadrag antxl
8. The Parties agree to attend the mediation with authority to settle within any
MR Alfredo Dicky Fung set out in writing and signed by or on behalf of each of the Parties.
range that can reasonably be anticipated.
Contact No.: 9999-9999
Gulf Chambers 9. At the mediation each Party may be accompanied by one or more persons, EXCLUSION OF LIABILITY AND INDEMNITY
41 Roc km an Centre including legally qualified persons, to assist and advise them.
18. The Mediator will not be liable to any Party for any act or omission by the
1121 Peaceful Avenue
Mediator in the performance or purported performance of the Mediator s
Hong Kong COMMUNICATION BETWEEN THE MEDIATOR AND THE PARTIES
obligations under this Agreement unless the act or omission is fraudulent
10. Any information disclosed to a Mediator in private is to be treated as
APPOINTMENT OF MEDIATOR 19. Each Party indemnifies the Mediator against all claims by that Party or anyone
confidential by the Mediator unless the Party making the disclosure states
claiming under or through that Party, arising out of or in any way referable
1. The Parties appoint the Mediator to mediate the Dispute between them in otherwise.
to any act or omission by the Mediator in the performance or purported
accordance with the terms of this Agreement.
CONFIDENTIALITY OF THE MEDIATION performance of the Mediator’s obligations under this agreement, unless the
ROLE OF THE MEDIATOR act or omission is fraudulent.
11. Every person involved in the mediation:
2. The Mediator will be neutral and impartial. The Mediator will assist the Parties 20. No statements or comments, whether written or oral, made or used by the
(a) will keep confidential all information arising out of or in connection with Parties or their representatives or the Mediator within the mediation shall be
to attempt to resolve the Dispute by helping them to:
the mediation, including the fact and terms of any settlement, but not relied upon to found or maintain any action for defamation, libel, slander or
(a) systematically isolate the issues in dispute; including the fact that the mediation is to take place or has taken place or any related complaint, and this document may be pleaded as a bar to any inch
where disclosure is required by law to implement or to enforce terms of action.
(b) develop options for the resolution of these issues; and
settlement; and
(c) explore the usefulness of these options to meet their interests and needs. MEDIATION CODE
(b) acknowledges that all such information passing between the Parties and
3. The Mediator may meet with the Parties together or separately. the Mediator, however communicated, is agreed to be without prejudice 21. The mediation shall proceed according to the terms of this Agreement and the
to any Party's legal position and may not be produced as evidence or Hong Kong Mediation Code.
4. The Mediator will not:
disclosed to any judge, arbitrator or other decision-maker in any legal or
(a) give legal or other professional advice to any Party; or other formal process, except where otherwise disclosable in law. COST OF THE MEDIATION
(b) impose a result on any Party; or 12. Where a Party privately discloses to the Mediator any information w 22. Die Parlies will be responsible for the fees and expenses of the Mediator m
confidence before, during or after the mediation, the Mediator will not disclose accordance with the Schedule.
(c) make decisions for any Party.
that information to any other Party or person without the consent of the Part)'
23. Unless otherwise agreed by the Parlies in writing, each Party agrees to share
CONFLICT OF INTEREST disclosing it, unless required by law to make disclosure.
the mediation fees equally and also to bear its own legal and other costs and
5. The Mediator must, prior to the commencement of the mediation, disclose to 13. The Parties will not call the Mediator as a witness, nor require him to produce expenses or preparing for and attending the mediation (“each Party’s Legal
in evidence any records or notes relating to the mediation, in any litigation, Costs") prior to the mediation. However, each Party further agrees that any
the Parties to the best of the Mediator’s knowledge any prior dealings with any
arbitration or other formal process arising from or in connection with the court or tribunal may treat both the mediation fees and each Party's legal costs
of the Parties as well as any interest in the Dispute.
 274 APPENDIX 2 APPENDIX 2 275
APPENDIX 1
Messrs To & So IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP609)
as costs in the ease in relation to any litigation or arbitration where that court Appendix 2 AND
Solicitors
or tribunal has power to assess or make orders as to costs, whether or not the IN THE MATTER OF AN ARBITRATION
Messrs To *S So
mediation results in settlement of the Dispute.
Solicitors Bv hand and bv email [email protected] BETWEEN
LEGAL STATUS AND EFFECT OF THE MEDIATION The Hong Kong International Arbitration Centre Sino-Pac Chips Corporation Claimant
By Registered Post and bv email fceoffidbstccbnologY.com] Secretariat - and -
24. Any contemplated or existing litigation or arbitration in relation to the Dispute
38,h Floor Two Exchange Square Diode Brilliant Supplies GmbH Respondent
may be started or continued despite the mediation, unless the Parties agree or 131 Diligent Industrial Centre
a court orders otherwise. 456 Hard Work Street 8 Connaught Place
Kowloon Central
25. This Agreement is governed by the lawofthe Hong Kong Special Administrative Hong Kong Notice of Arbitration
Region and the courts of the Hong Kong Special Administrative Region shall Attn: Mr. MK Lau
have exclusive jurisdiction to decide any matters arising out of or in connection Attn;. SsCTCtaoMjeiisial
with this Agreement and the mediation. July 3, 2018
July 3,2018
Dear Sirs,
Date: 31 August 2018 Dear Sirs, This Notice of Arbitration is issued pursuant to Clause 15 of Contract No. spec/
Notice of Arbitration dbs/12345 (“the Contract”) between the Claimant and the Respondent dated 25
Sino-Pac Chips Corporation Diode Brilliant Supplies GmbH Notice pf Arbitration December 2014.
Contact No.: 2222-2222 Contact No.: 3333-3333 Sino-Pac Chips Corporation
3301 Smart Commercial Building 131 Diligent Industrial Centre - and - Sino-Pac Chips Corporation (Claimant] This Notice of Arbitration is filed with the Hong Kong International Arbitration Centre
123 Clever Road 456 Hard Work Street - and - | (“HKIAC") Secretariat in accordance with Article 1 of the 2014 Domestic Arbitration
Diode Brilliant Supplies GmbH
Hong Kong Kowloon Diode Brilliant Supplies GmbH [Respondent] Rules of the HKIAC.
We act for the Claimant, Sino-Pac Chips Corporation.
We act for the Claimant, Sino-Pac Chips Corporation. A Tm Pakhls
The Mediator Our Client has attempted to resolve its differences amicably with you without much
In accordance with Article 1 of the 2014 Domestic Arbitration Rules of the Hong Al. The Claimant
MR Alfredo Dicky Fung success to date and has no choice but to refer the matter to arbitration in accordance
Kong International Arbitration Centre (HKIAC), we enclose a copy of the Notice of 1. The Claimant is and was at all materials times ...
with Contract No. spcc/dbs/12345 dated 25 December 2014.
Arbitration together with a cheque to the amount of HKS 8000.00 as a non-refundable
In accordance with Article 1 of the 2014 Domestic Arbitration Rules of the Hong Kong registration fee in relation to the caption matter for your handling. 2. The Claimant is represented in this arbitration by Messrs. To A So. AD
Schedule International Arbitration Centre (HKIAC), we have taken the liberty of serving the communications with the Claimant should be sent to:
Should you require further information from us, please do not hesitate to revert back
Fees and Expenses of the Mediator HKIAC with a copy of the Notice of Arbitration and enclose such for your reference. Attention: To & So Solicitors
I to us.
Address: ...
1. For all preparation HKS3.500 (per hour) In the mean time we look forward to hearing from you further on the matter. Telephone: ...
2. For the mediation HKS3.000 (per hour) Yours faithfully. Facsimile: ...
Yours faithfully,
3. Room hire fees HKS800 ! A2. The Respondent
4. Allocation of costs Messrs. To & So
3. The Respondent is and was a limited liability company incorporated in
Solicitors for the Claimant Messrs. To & So
Sino-Pac Chips Corporation 50% Solicitors for the Claimant 4. The Respondent’s contact details are as follows:
Diode Brilliant Supplies GmbH 50% Ends. Ehclg. Attention: ...
Copy: HKIAC by hand and by email ([email protected]) Copy:
Address: ...
Diode Brilliant Supplies GmbH by registered post and by email Telephone. ...
([email protected]) Facsimile: ...
Email: ...
B. j?AUsfclWL?iD

5....

i
 APPENDIX 3 179
APPENDIX 2 APPENDIX 2 277
Appendix 3 6. Within 30 days of receipt of document production requests, if any, the parties
E. Arbitilmiqn Agreement 11. The Claimant hereby proposes the following persons to be the arbitrator. Up shall produce the relevant documents or file objection(s) to such requests with the
till this date, the Claimant has not yet contacted these persons: IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP.609) Arbitrator, in the latter case the Arbitrator shall make directions as appropriate and/
6. The Notice of Arbitration is brought pursuant to Clause 15 of the Contract AND
(a) Mr Smart Arbitrator; or rule on such objection(s).
which provides, inter alia, that: IN THE MATTER OF AN ARBITRATION
factual Witness Statements
"15.1 Any dispute or difference arising out of or in connection with this (b) Mr Wise Lawyer SC
Contract, including any question concerning this Contract's formation, Sino-Pac Chips Corporation Claimant 7. Within 45 days following conclusion of the matters set out in paragraph 5 or 6
(c) Ir. Pretty Engineer
validity, interpretation or termination, ("Dispute"), shall be resolved in - and - above, whichever is later, the parties shall exchange and submit to the Arbitrator
acconlance with this Clause 15. Diode Brilliant Supplies GmbH Respondent the Factual Witness Statements upon which they rely. Such statements shall stand
Dated this the 3rd day of July 2018
as evidence in chief of the witnesses called.
15 2 The parties shallfirst use their best efforts to resolve any Dispute in a
reasonable and equitable manner. Messrs. To & So 8. Within 45 days thereafter, the parties shall exchange and submit to the Arbitrator
Solicitors for the Claimant Arbitrator’s Procedural Order No.I the Reply Factual Witness Statements upon which they rely. Such statements shall
15.3 Ifthe Parties are unable to reach an agreement on the Dispute, then the
Party may, by written notice to the other Party, request that the Dispute stand as evidence in chief of the witnesses called.
be referred to mediation Expert Witness Statements
•••
9. Within 45 days thereafter, the parties shall exchange and submit to the Arbitrator
UPON hearing counsel for the parties’ opinion, the Tribunal makes the following the Expert Witness Statements, if any, upon which they rely.
15.7 If neither Party requests the Dispute be referred to mediation, or if procedural order:
either Party refuses such request for mediation, or the mediation 10. Within 45 days thereafter, the parties shall exchange and submit to the Arbitrator
fails to resolve the Dispute within 90 days of the appointment of the Written Statements the Expert Witness Statements in reply, if any, upon which they rely.
mediator (unless extended by agreement ofthe Parties), then subject to 1* Within 45 days hereof, the Claimant shall serve on the Respondent and submit to
Clause 15.11 the Dispute shall be referred to andfinally determined by Others
the Arbitrator its Statement of Claim, together with copies of all the documents
arbitration. 11. The parties shall send all Written Statements, Factual Witness Statements, Expert
upon which it relies (in electronic form and/or hard copies).
15.8 The arbitration shall be before a single arbitrator in Hong Kong at Witness Statements and supporting documents directly to the Arbitrator by
2. Within 45 days following service of the Statement of Claim, the Respondent shall
the [Hong Kong International Arbitration Centre ("HKIAC")] and in or by courier with a full copy sent simultaneously to the other party by hand or by
serve on the Claimant and submit to the Arbitrator its Statement of Defence (and courier, and always with an advance copy by e-mail. All exhibits and supporting
accordance with the HKJA C Domestic Arbitration Rules. The arbitration
Counterclaim, if any), together with copies of all the documents upon which it relies
shall be a domestic arbitration. The Parties agree that Schedule 2 ofthe documents submitted to the Arbitrator shall be accompanied by a list specifying at
(in electronic form and/or hard copies).
Hong Kong Arbitration Ordinance (Cap. 609) shall apply to any Dispute least their subject, date and author, and shall be numbered consecutively throughout
which is referred to arbitration in connection with this Sub-Contract. 3. Within 45 days following service of the Defence (and Counterclaim, if any), the the entire proceedings (for Claimant: CM, C-2, etc; for Respondent: R-l, R-2 etc).
Claimant shall serve on the Respondent and submit to the Arbitrator its Statement of With each new submission, the parties shall submit an updated consolidated list of
7. A copy of the Contract is enclosed with this Notice of Arbitration.
Reply (and Defence to Counterclaim, if any), together with copies of the documents all exhibits filed.
8. On 27 July 2017, the Claimant and the Respondent attempted to negotiate, upon which it relies (in electronic form and/or hard copies). 12. A further directions hearing shall be fixed after the conclusion of the matters set out
however the parties failed to reach an amicable settlement.
4. Within 45 days following service of the Statement of Reply (and Defence to in paragraph 5 or 6 above, whichever is later, to fix the duration and dates for the
E Demand for Arbitration Counterclaim, if any), the Respondent shall serve on the Claimant and submit to the hearing of this arbitration.
Arbitrator its Reply to Defence to Counterclaim, if any, together with copies of the
9. Based on the above, we, on behalf of the Claimant, hereby request that the 13. There shall be liberty to apply.
documents upon which it relies (in electronic form and/or hard copies).
dispute be referred to arbitration in accordance with Clause 15 of the Contract,
14. The costs of this Procedural Order No 1 are to be in the arbitration.
and Article 1 of the 2014 Domestic Arbitration Rules of the HKIAC. Document production
£* JUMPER or Arbitrators and Appointment of Arbitrator 5. Within 30 days following service of the Statement of Reply (and Defence to
Counterclaim, if any) pursuant to paragraph 3 above or, if applicable, service of Dated the 20* day of November 2018.
10. The Arbitration Agreement stipulated the arbitration be referred to a single
the Reply to Defence to Counterclaim pursuant to paragraph 4 above, whichever is
arbitrator.
later, the parties shall exchange document production requests, if any, pursuant to (Theodore Templeman)
Article 3 of the IBA Rules on the Taking of Evidence in International Arbitration Arbitrator
(2010 version), and the procedure set out therein shall be adopted as a guideline.

i
 APPENDIX 4 2J1
T
Appendix 5 Appendix 6
Appendix 4 l Knowledge of “Jeromian Chips” to be used for further production and sales
IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP.609) IN THE MATTER OF THE ARBITRATION ORDINANCE fCATM*h
IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP.609) Claimant’s Position Respondent’s Position AND AND
AND During the telephone conversation The Respondent never knew that the IN THE MATTER OF AN ARBITRATION IN THE MATTER OF AN ARBITRATION
IN THE MATTER OF AN ARBITRATION between Mr Chan and Mr Lau on 21 Claimant was engaged in any lucrative
July 2015, Mr Chan clearly indicated to distribution contract. Sino-Pac Chips Corporation
Sino-Pac Chips Corporation Claimant Mr Lau that the “Jeromian Chips” were - and -
In any event, the Respondent made
- and - used for the production oi“E-Smarties". Diode Brilliant Supplies GmbH Respondent Diode Brilliant Supplies GmbH
it clear during various telephone
Diode Brilliant Supplies GmbH Responden Mr Lau was also alive to the fact that
conversations that a change in the
the Claimant has a HKS 100 million
capacity of the “Jeromian Chips” would
distribution contract with the Wil-
lead to inevitable delay of delivery. CHRONOLOGY DRAMATIS PERSONAE
AGREED LIST QFISSVES locg Computer Software Ltd which
the Claimant was obliged to deliver 30
Facfai banes thousand “E-Smarties" by 28 January Date Event Party Role
I. The specifications of the “Jeromian Chips" 25 December 2014 Sino-Pac Chips Corporation ("die Claimant*') entered Sino-Pac Chips Corporation The Claimant
for the “Jeromian Chips” arrive on time. into contract with Diode Brilliant Supplies GmbH (The (“The Claimant”)
An IT company incorporated ■
Clainianf's Pnsmoc Respondent's Position Respondent”) (“die Agreement”)
the British Virgin
On 15 April 2015. Mr CH Chan On 15 April 2015. Mr Chan of the J Legal Issne The Agreement requires the Respondent to manufacture and
(“%fr Chan”) of the Claimant called Mr Claimant confirmed with Mr Lau of the deliver 40 thousands “Jeromian Chips” of capacity of 15 GHz.
'3. Remoteness of Damages Respondeat on 25 Dec 2014.
MK Lau (“Mir Lau”) of the Respondent. romian Chips” 18 June 2015 Sino-Pac Chips Corporation (“the Claimant”) entered into a
cndicanxxg ?Sar tJxc "Jertman Chips^ should be of 15 GHz. Mr Chan reminded distribution contract with WU-Ioog Computer Software Ltd
were to be of capacity of 15 GHz. Mr Lau that this specification, once (“WCS”). (“the Distribution Contract”) WCS on 18 2015.
confirmed, could net be changed
On 21 Jofy 2015, MrChan of the Claimant Diode Brilliant Supplies GmbH The
The Distribution Contract requires the Claimant to deliver
called Mr Lax of the Respondent, by On 22 June 2015. Mr Chan phoned (The Respondent”)
30,000 “E-Smarties” by 28 January 2016. The capacity of the An electrical
pfccne. iuc to the chBit Mr Lau indicating that due to “Jeromian Chips” has to be 15 GHz. in the People*!
of specification of -£-5«oraer”. the unforeseeable circumstances (which
19 June 2015 WCS informed the Claimant of a change in die required
-Jenaman Chips* were to be of capoorv Mr Chan fid not dacorxte) the capacity
specifications of the “E-Smarties” The capacity of “J
of 25 GHz mead. Mr Lau of the cf the ‘“feroemn Ciapi* h
Chips” has to be of 25 GHz.
Respondent cun tinned that the delivery Mr Lau tefd Mr Chan that if swadd 25 Dec 2014.
date of 3 December 31L5 could be met be impossible Mr Qan repeatedly WiWong Computer Software Ltd A
requested chose to be charged. Mr Lau (-WCS") m
prsnued to rftin »*rS Haicf
!fxe ngfiaiiMif of Prodtaction. Mr Lau Entered into the Distribution CcahaQ wfl
also arged Mr Chan Co see whether Ac the Clamant on 18 hm 2015.
Respondent could keep tf:e tpeofirafion
it 15 GHz.
Go 21 Jbiy 2015. Mr Oan phoned
Mr Lau again and said the order has to
be changed ao 25 GHz. VEr Lau sanidos
would lead ao a delay of abeet 3 months-
MrChan agreed.
 [ APPENDIX 7 285
286 APPENDIX 7

(2) The Respondent may agree with the Claimant’s solicitors that the above
[ (2) When there are twro or
7

Appendix 7 i or not, and whether solely or jointly owned up to the value of spending limits should be increased or that this Order should be varied in
_____ { (a) references to “the
HKS5.000,000,000.00. This prohibition includes the following assets any other respect, but any such agreement must be in writing.
W THE MATTER OF THE ARBITRATION ORDINANCE (CAP 609)
in particular (b) an order requiring
AND (4) This Order shall cease to have effect if the defendant provides security by
requires each Respondent to do
IN THE MATTER OF AN ARBITRATION (i) die property known as 88 Hill Flatdoorie, Happy Road, Hong paying the sum of HK$5,000,000,000.00 in the form of written guarantee
Kong or the net sale money after payment of any mortgages if it or makes provision for security in that sum by some other method agreed (c) a requirement relating to
Sino-Pac Chips Corporation Claimant has been sold; with the Claimant’s solicitors or approved by the arbitrator. proceedings on “the
- and - EFFECT OF THIS ORDER
(ii) the property and assets of the Respondent’s business known as
Diode Brilliant Supplies GmbH Respondent Sino-Pac Chips Corporation (or carried on at Fat Choy Industrial A Respondent who is a corporation and which is ordered not to do something must
Building, 68 Sham Shui Po, Hong Kong), or the sale money if not do it itself or by its directors, officers, employees or agents, or in any other way.
INJUNCTION PROHIBITIN G DISPOSAL OF .ASSETS IN HONG KONG any of them have been sold; and
THIRD PARTIES
IMPORTANT
(iii) any money in the accounts numbered 123-4567890-222 at
NOTICE TO THE RESPONDENT (1) Effect ofthis Order. It is a contempt of court for any person notified of this
HSBC
Order knowingly to assist in or permit a breach of this Order. Any person
I. This Order prohibits you from dealing with vour assets up to the amount doing so may by imprisoned, fined, or have his assets seized.
stated (2) If the total unencumbered value of the Respondent’s assets in Hong Kong •

exceeds HK55,000,000,000.00, the defendant may remove any of those (2) Set offby banks. This injunction does not prevent any bank from exercising
The Order is subject to the exceptions which are set out in the Order. any right of set-off it may have in respect of any facility which it gave to
assets from Hong Kong or may dispose of or deal with them so long as the
You should read the whole of this document carefully. You are advised to the Respondent before it was notified of this Order.
total unencumbered value of his asset still in Hong Kong remains above
consult a solicitor as soon as possible. You have the right to ask the arbitral
HKS5.000,000,000.00. (3) Withdrawals by the Respondent. No bank need inquire as to the application
tribunal to van or discharge this Order.
or proposed application of any money withdrawn by the defendant if the
2. If you disobey this Order you may be found guilty of contempt of court 2. Disclosure of Information
withdrawal appears to be permitted by this Order.
and you [any of vour directors] may be [sent to prison or]1 fined or your (1) The Respondent must inform the Claimant in writing at once of all his
assets may be seized. UNDERTAKINGS
assets of an individual value of HKS 1,000,000.00 or more in Hong Kong,
Before Mr Theodore Tnapkmao. Sole Arbitrator whether in his own name or not and whether solely or jointly owned, The Claimant gives to the arbitrator and the Respondent the undertakings set out
giving the value, location and details of all such assets. The Respondent in Schedule 2 to this Order.
QRPER may be entitled to refuse to provide some or all of this information on the VARIATION OR DISCHARGE OF THIS ORDER
An application was made on 1 July 2018 by counsel for Sino-Pac Chips Corporation, grounds that it may incriminate him.1
the Claimant, to the Arbitrator who read die affirmations listed in Schedule 1 and The Respondent (or any one notified of this Order) may apply to the arbitrator at
(2) This information must be confirmed in an affidavit which must be served any time to vary or discharge this Order (or so much of it as affects that person,),
accepted the undertakings in Schedule 2 at the end of this Order. After bearing the
on the Claimant’s solicitors within 21 days after this Order has been served but any one wishing to do so should first inform the Claimant’s solicitors.
application, the Arbitrator made the following Order
on the Respondent
IT IS ORDERED that: NAME AND ADDRESS OF PLAINTIFFS SOLICITORS
DURATION OF THIS ORDER
1. Resniaion on disposal ofassets The Claimant’s solicitors are:
This Order will remain in force up to and including 14 July 2018 (“the return date”),
(1) The Respondent must not— Name: Messrs Sam L.H. Wong
unless before then it is varied or discharged by a further order of the court The
(a) remove from Hong Kong any of his assets which are within Hong application in which this Order is made shall come back before the arbitrator for Address: 1201, Peterson Commercial Building, 25 Christian Road
Kocg. whether in his own name or not, and whether solely or jointly further hearing on the return date unless the Respondent gives a written guarantee
Telephone Number 2525-2525 (during office hours)
owned, up to the value of HK55.000,000.000.00, or by a bank in Hong Kong to the Claimant of the sum of HKS5,000,000,000.00
for security. 2121-2121 (outside office hours)
(b) m any way dispose of or deal with or dimmish the value of any of
his assets, which are within Hocg Kong, whether in his own name INTERPRETATION OF THIS ORDER
EXCEPTIONS TO THIS ORDER
(1) In this Order “be” “him” or “his" include “she”, “her”, “hers” and “it" or
(1) This Order does not prohibit the Respondent from spending HKS500.000.00
“its”.
•zjeL
u dr* is i 3 per week towards his ordinary and proper business expenses and also
7V«r tmd. a corpe. HKS200.000 00 per week on legal advice and representation.
 290 APPENDIX * APPENDIX t
ATTENDED 7
7. You are entitled to refuse to permit disclosure of any documents passing (3) This Order requires the Respondent or Inc employee or ofto person
SCHEDULE 1 Appendix 8 between you and your solicitors or patent or trade marks agents for the appearing to be in control of (be premises and having such acherf. as
purpose of obtaining advice (“privileged documents”). aforesaid to permit entry to the premises immediately the Order is served
Affidavits IN THE MATTER OF THE ARBITRATION ORDINANCE (CAP 609)
upon him, except as staled in para.3 below.
8. You are entitled to seek legal advice, and to ask the court to vary or
read the following affidavits before miking this Order AND
discharge this Order, provided you do so at once, and provided that 2. Restrictions on the service and carrying out ofpmra.1 ofthis Order
CD Sarah Stevenson, CEO of the Claimant IN THE MATTER OF AN ARBITRATION meanwhile you permit the Claimant's solicitors to enter, but not start to
Paragraph 1 of this Order is subject to die following restrictions:
search: see para. 3.
SCHEDULE 2 (1) This Order may only be served between 9*30 a.m. and 530 pan. Monday
Sino-Pac Chips Corporation Claimant 10. If you Diode Brilliant Supplies GmbH, the defendant, disobey this Order
to Friday or between 9:30 a.m. to 1:00 pan. Saturday (excluding pafefic
given to the arbitrator and the Respondent by the Claimant - and - you may be found guilty of contempt of court and any of your directors
holidays).
may be sent to prison or fined or your assets seized.
(1) If the arbitrator later finds that this Order has caused loss to the Respondent Diode Brilliant Supplies GmbH Respondent
(2) This Order may not be carried oat at the same trine as any search warrant.
or any other party and decides that the Respondent or that other party 11. If any person with knowledge of this Order procures, encourages or assists
should be compensated for that loss, die plaintiff will comply with any ORDER TO ALLOW ENTRY AND SEARCH OF PREMISES in its breach, that person will also be guilty of contempt of court (3) This Order must be served by the Cliamant’s solicitors mad pan. 1 of the
order die cowl may make. Order must be carried out in his presence and under his supervision.
IMPORTANT
<2) The Claimant will on or before the 21st day of July 2018 cause a written Before Mr Theodore lem pieman. Sole Arbitrator (4) The information obtained by entry on the premises of the persons
NOTICE TO THE RESPONDENT
guarantee in favour of the Respondent in the sum of HK5900,000,000 00 named shall not be used or made available for the commercial gam or
ORDER
to be issued from a bank having a place of business in Hong Kong, such advantage of any person, whether or not he is named as party to these
1. This Order orders you to allow the persons mentioned below to enter the
guarantee being in respect of any order the court may make pursuant to the An application was made on the 1 July 2018 by counsel for Sino-Pac Chips proceedings.
premises described in the Order and to search for, examine and remove or
foregoing paragraph. The plaintiff will further, forthwith upon such issue, Corporation, the Claimant, to the arbitrator who accepted the undertakings of the
copy the articles specified in the Order. The persons mentioned will have (5) No item may be removed from the premises until a list of the items to
a copy of the guarantee to be served on the Respondent Claimant and the Claimant’s solicitors in Schedules 3 and 4 and read the affidavits
no right to enter the premises or, having entered, to remain at the premises, be removed has been prepared, and a copy of the list has been supplied
at Schedule 5 at the end of this Order. Following the application the arbitrator
(3) As soon as practicable the Claimant will serve on the Respondent copy of unless you give your consent to their doing so. If, however, you withhold to the person served with the Order, and be has been given a reasonable
made the following Order.
the affidavits and copiable exhibits containing the evidence relied on by your consent you will be in breach of this Order and may be held to be in opportunity to check the list Should the defendant (or failing him rise
die Claimant and a copy of the skeleton argument used at the application contempt of court The Order also requires you to hand over any of such IT IS ORDERED that: person served with the Order) object to the removal of any item, such
for this Order. The Claimant would also notify the Respondent that an oral articles which are under your control and to provide information to the item shall be sealed in a suitable carton or container and retained by the
I. Entry and search ofpremises and vehicles on the premises
bearing would take place before the arbitrator on the Return Dale. plaintiff's solicitors, and prohibits you bom doing certain acts. This part plaintiff's solicitors until the return day hearing.
of the Order is subject to restrictions. (1) The defendant must allow Mr. P. Jiang the Claimant’s solicitors, and up to
(4) The Claimant will pay the reasonable costs of anyone other than die (7) The premises must not be searched, and items must not be removed from
five other persons being associates of Messrs P Jiang & Co accompanying
Respondent which have been incurred as a result of this Order including 2. You should read the terms of the Order carefully. You are advised to them, except in the presence of the Respondent or any employ ee or any
them, to enter the premises mentioned in Schedule 1 to this Order and any
the costs of ascertaining whether that person bolds any of the Respondent’s consult a solicitor as soon as possible. other person appearing to be in control of or responsible for the premises.
other premises of the defendant disclosed pursuant to para. 5(1) hereof and
assets and if the court later finds that this Order has caused such a person any vehicles under the defendant’s control on or around the premises so
3. Before you, the Respondent or the person appearing to be in control of the (8) If the Claimant’s solicitors are personally satisfied that full compliance
loss, and decides that such person should be compensated for that loss, die
premises allow anybody onto the premises to cany out this Order you are that they can between the hours of 9:30 a m. and 5:30 p.m. on a Monday with subparagraphs (5) or (6) above is impracticable, be may permit the
Claimant will comply with any order the court may make. to Friday and 9:30 a.m. to 1:00 p.m. on a Saturday (excluding public
entitled to have the solicitor who serves you with this Order explain to you search to proceed and items to be removed without compliance with the
(5) If for any reason this Order ceases to have effect (including in particular what it means in everyday language. holidays in both cases) search for, inspect, photograph or photocopy, and impracticable requirements, provided that he shall record and sign his
where the Respondent provides security as provided for above or the deliver into the safekeeping of the plaintiff's solicitors all the documents detailed reasons for so doing and preserve that record for scrutiny by the
4. You are entitled to insist that there is nobody present who could gain
Claimant does not provide a bank guarantee as provided for above), the and articles which are listed in Schedule 2 to this Order (“the listed items") court
commercially from anything he might read or see on your premises.
Claimant will forthwith take all reasonable steps to inform, in writing, any or which the plaintiff's solicitors believe to be listed items. The defendant
must allow those persons to remain on the premises until the search is 3. Obtaining legal advice and applying to the court
person or company to whom he has given notice of this Order, or wbo be 5. You are entitled to refuse to permit entry before 9:30 a.m. or after 5:30
has reasonable grounds for supposing may act upon this Order, that it has pjn. on Monday to Friday; and similarly before 9:30 a.m. and after 1:00 complete but not in any event later than 8:00 p.m. on Monday to Friday or Before permitting entry to the premises by any person other than the Claimant's
ceased to have effect. p.m. on Saturday. Moreover, you are entitled to refuse entry throughout 3:00 p.m. on Saturday, and to re-enter the premises on the same day before solicitors, the Respondent or other person appearing to be in control of the premises
any Sunday or public holiday. You must allow the persons permitted entry those times, and if necessary on the next following working day within the may.
to remain on the premises until the search is complete, but not later than hours stipulated for the initial entry, in order to complete the search.
(1) seek legal advice and apply to the arbitrator to vary or discharge this Order
8:00 p m on Monday to Friday or 3:00 p.m. on Saturday. (2) This Order must be complied with by the Respondent himself or by provided be does so at once. If the Respondent or other person appearing
6. If the search is not completed by 8:00 p.m. (or by 3:00 p.m. on a Saturday) employee of the Respondent or by any other person appearing to be in to be in control of the premises intends to ask the court to vary or discharge
the premises will be sealed until the search resumes at 9:30 a m. on the control of the premises and having authority to permit the premises to be this Order, he/she may ask the Claimant’s solicitors to connect him her to
next following working day, when you must allow re-entry to the same entered and the search to proceed. the arbitrator to speak by telephone; and
persons for that purpose
 294 APPENDIX 8 APPENDIX 8 29i
m APPENDIX 8 APPENDIX 8 293
(c) n requirement relating to service of this Order, or of any legal SCHEDULE 1
(2) gather together any documents he believes may be incriminating or 6. Prohibited acts proceedings, on “the Respondent” means on each of them. However,
The premises
privileged and hand them to his own solicitors for the solicitors to assess the Order is effective as against any defendant on whom it is served;
(1) Except for the purpose of obtaining legal advice, the Respondent or and 88 Hill Flatdooric, Happy Road, Hong Kong.
whether they are incriminating or privileged ns claimed. If the solicitors
anyone else with knowledge of this Order must not directly or indirectly
conclude that any of the said documents may be incriminating or privileged (d) any other requirement that something shall be done to or in the
inform anyone of these proceedings or of the contents of this Order, or
documents or if there is any doubt ns to their status the Respondent’s presence of “the Respondent” means to or in the presence of any one SCHEDULE 2
warn anyone that proceedings hnvc been or may be brought against him i
solicitors shall exclude them from the search and shall retain the documents of them or in the case of a firm or company a director or a person
by the Claimant. The listed items
of doubtful status in his possession pending further order of the arbitrator. appearing to the Claimant’s solicitors to be a responsible employee.
(2) The Respondent must not destroy, tamper with, cancel or part with (1) Correspondence between Claimant and the Respondent regarding the
While this is being done, the Respondent may refuse entry to the premises
possession, power, custody or control of the listed items otherwise than in purchase of the "Jeromian Chips’’.
by any other person, and may refuse to permit the search to begin, for
accordance with the terms of this Order. (2) Jeromian Chips.
a short time (not to exceed two hours, unless the Claimant's solicitors
agree to a longer period). If the Respondent wishes to take legal advice DURATION OF THIS ORDER SCHEDULE 3
and gathers documents as permitted, he shall first inform the Claimant's
Paragraph 6(2) of this Order will remain in force up to and including 15th July Undertakings given by the Claimant
solicitors and shall keep him informed of the steps being taken.
2018 (which is “the return date"), unless before then it is varied or discharged by
4. Delivery of listed Items and computer print-outs a further order of the arbitrator. (1) If the arbitrator later finds that this Order or carrying it out has caused loss
to the Respondent, and decides that the Respondent should be compensated
(1) The Respondent must immediately hand over to the Claimant's solicitors EFFECT OF THIS ORDER for that loss, the Claimant will comply with any order the court may make.
any of the listed items which are in his possession or under his control save
A Respondent which is a corporation and which is ordered not to do something must Further, if the carrying out of this Order has been in breach of the terms of
for any computer or hard disk integral to any computer.
not do it itself or by its directors officers employees or agents, or in any other way. this Order the Claimant will comply with any order for damages the court
(2) If any of the listed items exists only in computer readable form, the may make.
UNDERTAKINGS
Respondent must immediately give the Claimant’s solicitors effective
(2) To serve on the Respondent at the same time as this Order is served upon him:
access to the computers, with all necessary passwords, to enable them to The Claimant and the Claimant’s solicitors gave to the arbitrator and the Respondent
be searched, and cause the listed items to be printed out or copied onto a the undertakings contained in Schedules 3, 4 and 5 respectively to this Order. (a) informing him the return date before the arbitrator;
floppy disk and given to the Claimant’s solicitors. A printout of the items
VARIATION OR DISCHARGE OF THIS ORDER (b) copies of the affidavits and copiable exhibits containing the evidence
must be given to the Claimant’s solicitors or displayed on the computer
relied on by the Claimant. Unless impracticable, photographs of nan-
screen so that they can be read and copied. All reasonable steps shall be The Respondent (or anyone notified of this Order) may apply to the court at any copiable exhibits should also be served;
taken by the Claimant to ensure that no damage is done to any computer time to vary or discharge this Order, (or so much of it as affects that person), but
or data. The Claimant and his representatives may not themselves search anyone wishing to do so must first inform the Claimant’s solicitors. (c) a note of any allegation of fact made orally to the Judge where such
the Respondent’s computers unless they have sufficient expertise to do so allegation is not contained in the affidavits or draff affidavits read by
NAME AND ADDRESS OF PLAINTIFF’S SOLICITORS
without damaging to the defendant’s system. the arbitrator; and
The plaintiff's solicitors are:
5. Disclosure of Information by the Respondent (e) a copy of the skeleton argument used at the application for this Order.
Name: Messrs Sam L.H. Wong
(1) The defendant must immediately inform the Claimant’s solicitors: (5) To serve on the Respondent a copy of the Claimant’s solicitors' report on
(a) where all the listed items are; and Address: 1201, Peterson Commercial Building, 25 Christian Road the carrying out of this Order as soon as practicable after it is prepared.

(b) so far as is not apparent on the items themselves and so far as he is Telephone Number: 2525-2525 (during office hours) (6) Not, without the leave of the court, to use any information or documents
aware obtained as a result of canying out this Order nor to inform anyone else of
2121-2121 (outside office hours)
these proceedings except for the purposes of these proceedings (including
(i) the name and address of everyone who has supplied him, or INTERPRETATION OF THIS ORDER adding further defendants) or commencing civil proceedings in relation
offered to supply him, with listed items; to the same or related subject matter to these proceedings until after the
(1) In this Order “he”, “him” or “his” includes “she”, “her" or “hers” and “it”
(ii) the name and address of everyone to whom he has supplied, or or “its”. return date.
offered to supply, the listed items; and
(2) Where there are two or more Respondents then (unless the context
(iii) full details of the dates and quantities of every such supply and indicates differently):
offer.
(a) references to “the Respondent” mean both or all of them;
(2) Within 14 days after being served with this Order the Respondent must
(b) an order requiring “the Respondent” to do or not to do anything
swear an affidavit confirming the above information.
requires each defendant to do or not to do it;

J
 1 298 INDEX
INDEX 299
196 APPENDIX 8
Arbitral award See Award different dispute resolution statutory power, 7.076 dispute/difference between
Arbitral tribunal
SCHEDULE 4
INDEX arbitrators
clauses, 9.027
systematic resolution of disputes
contractual promise between promisee parties, 7.051-7.068
Undertakings given by the Claimant's solicitors and promisor, 7.002 general questions, 7.032
conflict of interest See Conflict of 9.025 definition, 7.001, 7.041-7.043 null and void, inoperative or
(1) To answer at once to the best of their ability any question as to whether a interest three-step analysis, 9.024
Ad hoc arbitration, 6.013 industry supports, 4.060 “hopeless confusion,” 7.001 incapable of being performed,
particular item is a listed item. justifiable conducts, 8.026 definition, 7.043
Adjudication issues, 4.053 inconsistent heading and content, 7.055 7.036-7.057
number of, 8.004-8.006 disadvantages of, 6.010-6.012 invalidity of, 12.017-12.020
(2) To return the originals of all documents obtained as a result of this Order adjudicator’s award, 4.007 limitation on private sector standard of proof, 7.029
parties treated with equality, discovery
(except original documents which belong to the Claimant) as soon as administered procedures contracts, 4.056-4.057 mingling court and arbitral tribunal, terms and particulars, 7.004
8.024-8.025 arbitral tribunal’s power to order, 7.044-7.045
possible and in any event within two working days of their removal. Adjudication Rules, 4.064, 4.070, subcontracts, 4.058 in writing, 7.001
qualification, 8.007-8.010 9.056-9.057 non-existing arbitration institution,
4.071-4.079 statutory regime, 4.005 Arbitration Rules, 9.028
(3) While ownership of any item obtained as a result of this Order is in dispute, challenging jurisdiction general principles, 9.048-9.049 7.057
adjudicator powers, 4.069 Adjudicators Arbitrator Award, 9.028
to deliver the article into the keeping of solicitors acting for the defendant court limited role in, 7.081-7.083 IB A Rules on Taking of Evidence right to arbitrate/to litigate,
appointment of adjudicator appointing institutions selection, Arbitrators
within two working days from receiving a written undertaking by them kompetenz-kompetenz doctrine in International Arbitration, 7.046-7.054
by Hong Kong International 4.049 challenges in arbitration
to retain the article in safe keeping and to produce it to the court when (or competence-competence), 9.058-9.060
Arbitration Centre Rules, 4.066 attributes of, 4.047 rules for construction of, 7.005 appointment, 8.039-8.044
required. 7.077-7.080 recurring theme in, 9.050
nominees list, 4.064-4.065 characteristics, 4.046 belt and braces approach, 7.014 behaviour with counsel appearing
parties waiver of right to object, relevance, 9.050-9.055 binding obligation, 7.015
(4) To retain in their own safe keeping all other items obtained as a result of language preference, 4.064 interest, 4.051-4.052 before court, 8.048-8.049
7.084-7.088 documents assisting contracts with different clauses on
this Order until the court directs otherwise. referring party, 4.064 prime qualities, 4.050 commercial dealings with one party,
statutory power, 7.076 agreed facts/admissions by parties, same topic, 7.013-7.014
written submissions, 4.067 selection based on experience in 8.045-8.047
duty of, 11.079 9.037 informed bystander with
SCHEDULE 5 advantages, 4.012 industry, 4.048 previously acting for/against party
granting injunction chronology and dramatis personae, background knowledge,
airport core programme projects, 4.011 Adjudicator’s decision in other proceedings, 8.046
Affidavits adequacy of damages, 10.017 9.035
changes between claiming parties and enforcement, 4.032-4.034 7.006-7.012 conflict of interest
balance of convenience, 10.018 opening submission, 9.036 no absurdity presumption,
The Claimant relied on the following affidavits: paying parlies, 4.003 binding, 4.059 challenging to be appointed as,
key principle’s, 10.013 printed case and pleadings, 7.020-7.022
classification, 4.011 Courts power, 4.059 8.011
(1) Madam Sarah Stevenson, CEO of the Claimant. serious question to be tried, 9.038-9.041
conducted by sole adjudicator, 4.008 types of challenges to, 4.011-4.019 “one-stop” jurisdiction presumption, direct pecuniary/proprietary
10.015-10.016 domestic/intemational, 6.003
in construction-related disputes, 4.009 in writing, 4.075 7.024-7.025 interests
natural justice, 8.027 fundamental requirement of, 6.001
on contractual basis, 4.006, 4.010 Airport core programme projects, “ordinary and natural meaning" of de minimis rule, 8.033-8.034
power list of issues, 9.031
costs of, 4.004 4.011 words, 7.019 Dimes rule, 8.029-8.032
to give security for costs, vs. litigation, 8.001
description, 4.002 Alternative dispute resolution party autonomy presumption, failure to disclose, 8.013
10.039-10.040 notice of arbitration, 9.018-9.022
disadvantages, 4.013-4.016 advantages, 1.014-1.015 7.016-7.018 International Bar Association (IBA)
to grant interim relief, preliminary issues, 9.029
generally, 4.001 determinative forms, 1.013 See also separability, 7.069 Guidelines, 8.023
10.003-10.005 procedural agreement, 6.001
jurisdiction Arbitration; Litigation illegal/against public policy, 7.072 Green List, 8.022
Arbitration regime, 6.003
adjudicator’s decisions disadvantages impeachment on invalidity, 7.074 Non-waivable Red List,
Ad hoc arbitration vs. institutional, transcription services, 9.047
basic principles, 4.034-4.036 compromising public interest, 1.017 issue of, 7.075 8.017-8.018
6.013-6.016 translation/interpretation, 9.045-9.046
errors of fact, 4.033 generally, 1.016 practical effect, 7.071 Orange List, 8.021
advantages of, 6.006-6.009 trial bundling, 9.032-9.034
generally, 4.032 vanishing precedent, 1.018 self-contained contract collateral, Waivable Red List, 8.019-8.020
characteristic, 6.001 tribunal secretary, 9.042-9.044
rendering of decision, 4.037 non-determinative form, 1.006 See 7.070 justifiable doubt, 8.014
checklist for preliminary and Arbitration agreement
classification, 4.038-4.039 also Mediation; Negotiation stay court action modem rule, 8.036
procedural meetings, 9.028 and arbitral tribunal See Arbitrators
determining one’s own, 4.040-4.041 Amiable compositeur, 11.019 court’s mandatory obligation to perceived, 8.053, 8.054
commencing within limitation of time arbitration clause, 7.002
natural justice, 4.044 Anton Filler order (search orders) basic working principle, 7.027 personal interests and connections,
contractual, 9.008-9.010 challenging arbitral tribunal
prerequisite, 4.045 discharge, 10.037-10.038 cause of action, 7.026 8.037
extension of contractual, jurisdiction
purpose of, 4.004 execution, 10.034-10.035 inherent jurisdiction, 7.028 possibility of bias and apparent bias,
9.011-9.017 court limited role in, 7.081-7.083
under Security of Payment Legislation powerful weapon against fraud and and substantive claim before, 8.035-8.049
statutory, 9.007 kompetenz-kompetenz doctrine
construction contracts, 4.054-4.055 dishonesty, 10.033 7.026 definition, 7.043
consolidation of disputes (or competence-competence),
consultation documents, 4.059 principles, 10.033 test otprimafacie/arguablc case, dishonest, 8.050-8.051
under circumstances, 9.023 7.077-7.080
divergence of views, 4.061-4.062 purpose, 10.032 7.029-7.031 justifiable conducts, 8.026
construction disputes, 9.023,9.025 parties waiver of right to object,
enactment of, 4.063 pursing third parties, 10.036 claims being barred vs. claim in mandate of arbitrator terminates, 8.063
court order, 9.026 7.084-7.088 arbitration barred, 7.033-7.034 matter of law/matter of fact, 8.063