来源：最高人民法院 发布时间：2020-11-27 12:38:46
大卫戴恩咨询有限公司（DAVID DEIN CONSULTANCY LIMITED）（以下简称大卫戴恩公司）、布拉姆利有限公司（BRAMLEY CORPORATION LTD）（以下简称布拉姆利公司）分别与北京中赫国安足球俱乐部有限责任公司（以下简称国安俱乐部）于2018年8月24日签署了相同的《顾问协议》各一份，约定将争议提交至香港国际仲裁中心以仲裁方式解决，准据法为英格兰法律。2018年11月21日，国安俱乐部据此向香港国际仲裁中心提交仲裁通知。后大卫戴恩公司、布拉姆利公司提出反请求。香港国际仲裁中心就此于2020年3月5日作出了案号为HKIAC/A18211的裁决：国安俱乐部对《顾问协议》构成了毁约性违约；国安俱乐部应向大卫戴恩公司、布拉姆利公司支付相关费用及利息。
一、CL 诉 SCG案
一、CL 诉 SCG案
 2 HKLRD 144
申请人与答辩人进行香港某仲裁中心管理之仲裁，申请人获胜诉，裁决命令答辩人需立即向申请人支付美金 2,173,000 元、利息及因仲裁而产生之费用。
鉴于法庭在International Bulk Shipping and Services Ltd 诉Minerals and Metals Trading Corp of India  1 All ER 1017一案里拒绝接受类近于前述有关诉讼因由的累算和意图的论点，法庭不接受诉讼因由仅在一方展示了其清楚明确不受裁决约束的意图才开始累算。法庭解释，接受这论点意味着允许仲裁裁决债务人可以无限期延迟和押后裁决债权人因诉讼因由而产生的累算，从而拖延其强制执行裁决下的权利。随法庭在International Bulk Shipping and Services Ltd 诉Minerals and Metals Trading Corp of India  1 All ER 1017一案及Agromet Motoimport Ltd 诉Moulden Engineering Ltd 1 WLR 762一案里的判决，法庭认为当“答辩人未能在被追讨时履行仲裁裁决中的承诺”，诉讼因由就开始累算。因此，时效期限在履行裁决的隐含承诺被违反时开始。
申请人辩称，其诉讼因由累算在2011年7月7日至2016年3月1日期间暂停，即申请人向内地某人民法院申请强制执行仲裁裁决的日期至该申请最终被上一级人民法院驳回之日。申请人提及《安排》的第2条和仲裁条例的40C条，该条例禁止在内地和香港同时提出强制执行仲裁裁决的申请，并指出该限制的目标是堵塞双重强制执行和双重追讨的漏洞(Shenzhen Kai Loong Investment and Development Co Ltd 诉CEC Electrical Manufacturing (International) Co. Ltd [2001-2003] HKCLRT 649)。因此，申请人认为法庭不应仅因为其曾试图在内地申请强制执行仲裁裁决，在《时效条例》第4（1）（c）条下被禁止在香港申请强制执行该裁决。
 1 HKLRD 627
法庭裁定，基于公共政策理据拒绝强制执行公约仲裁裁决的法律哲学亦适用于内地仲裁裁决。相关的门槛很高，理由是国际礼节原则必须被“编织”到公共政策的概念中，亦因此必须在涉及外地（包括内地）的仲裁裁决的情况下予以实施。在这一点上，法庭援引了Hebei Import & Export Corp诉Polytek Engineering Co Ltd（1999）2 HKCFAR 111一案的判词。法庭在该案指出，为使国际礼节原则予以实施，除非强制执行外地仲裁裁决会与香港的道德和公正的基本概念相抵触，否则法庭不会拒绝强制执行；而得出这结论需要非常充分的理由。
经对Hebei Import & Export Corp诉Polytek Engineering Co Ltd一案中所表达的观点进行仔细诠释后，法庭认为法庭可以仅因为表面偏颇而拒绝强制执行仲裁裁决。可是，如果仲裁一方希望以表面偏颇作为依据，它要达到的门槛比以实际偏颇作为依据时所适用的门槛高，而法庭在行使有关的酌情权应该审慎。
 4 HKLRD 353;
CACV 106/2008 & CACV 197/2008
上诉人没有将该物业交付给申请人，并以履行该协议违反中国内地法律为由宣称终止该协议。因此，申请人于北京展开仲裁程序（ “第一次仲裁”），并获得了对其有利的裁决（“该裁决”），当中命令上诉人要继续履行该协议。申请人随后在香港单方面获得了强制执行该裁决的命令（“ 该命令”）。
 4 HKLRD 604
答辩人发出的有关要求澄清以至颁发补充仲裁裁决的信函，以及仲裁委信函中的两封所载的回复都没有被抄送给上诉人。上诉人不同意答辩人对裁决的诠释, 并申请了许可在香港强制执行裁决第(b)及(c)项。答辩人反对其申请，并申请了许可强制执行裁决的第（a）项。法庭裁定答辩人胜诉。 随后，上诉人向上诉庭提出上诉。
法庭认为，撇开仲裁委信函的事宜，该仲裁裁决明显地没有指出上述裁决第(b)及(c)项下的付款义务取决于第(a)项。因此，在根据仲裁裁决作出的法庭判决以强制执行第(b) 至 (c)项的情况下，不应施加条件。否则，仲裁裁决将会被改变而不是被强制执行。按这道理，法庭没有理由对硫的状态和质量施加进一步的条件。
 3 HKLRD 484
根据申请人与答辩人在内地某仲裁委员会管理的仲裁，仲裁庭作出了裁决，裁定答辩人败诉（“该裁决”）。该裁决要求答辩人向申请人支付：（1）人民币29,195,470.58元的经济损失赔偿及相关利息人民币12,293,716.33元； （2）人民币500,000元的法律费用；及 （3）人民币675,473元的仲裁程序费用，以及人民币134,574元的仲裁员费用。
法庭引述并参考了英国法庭在Soleh Boneh International Ltd 诉 Government of the Republic of Uganda  2 LLR 208一案中所列出的原则。在该案中，英国法庭决定押后聆讯，同时要求与讼的有关方提供相当于仲裁裁决金额的保证以待瑞典法庭裁定仲裁裁决是否具约束力。在该案上诉的程序中，法庭考虑了两项因素 – 经法庭简短审议，有关仲裁裁决无效的论点的可取性，以及强制执行仲裁裁决的难易程度，以及如果执行有延误，执行会否因为资产转移或不经意的交易而变得困难。有关仲裁裁决无效的论点越有力，或强制执行的困难程度会因为执行被延误而提升的情况越明显，法庭越有可能会命令与讼的有关方提供保证。
Cases of the people's courts of Mainland
CASE No.1： Application of Farenco Shipping Pte. Ltd. for Enforcement of Arbitration Awards made in Hong Kong
(2018)Yue 72 Ren Gang No. 1, (2019) Yue 72 Ren Gang No. 1
I. Basic facts
On 1 February 2012, Farenco Shipping Pte. Ltd. (“Farenco”) of Singapore signed a contract of affreightment(“COA”) with Eastern Ocean Transportation Co., Ltd. (“Eastern Ocean”), agreeing that Eastern Ocean would transport the goods of Farenco, and all disputes arising from the COA would be submitted to arbitration in Hong Kong SAR with the application of the law of the United Kingdom (“UK law”). On 21 April of the same year, Farencosent an e-mail to Eastern Ocean to confirm that both parties had entered into a supplementary contract on the basis of the aforementioned COA, agreeing to add an additional lot of cargo to be transported, and that other terms and conditions of the COA would apply. Subsequently, a dispute over the performance of the supplementary contract arose between the parties, followed by its submission to arbitration in Hong Kong SAR by Farencoon 16 February 2016. According to the first final award and the final award on costs it handed down, the arbitral tribunal in Hong Kong SAR ruled that Eastern Ocean was to pay the corresponding damages and related arbitration fees.
After the arbitration awards came into effect, Farencoapplied to the Guangzhou Maritime Court for recognition and enforcement of the two arbitration awards. Eastern Ocean responded that the arbitration agreement submitted by Farenco had not been notarised and certified, nor had an officially certified Chinese translation been submitted. The freight in question was the subject matter of the supplementary contract, which was reached orally by both parties over the phone without having any arbitration clauses agreed on or any arbitration agreement concluded. Besides, Eastern Ocean had never recognised the jurisdiction of the arbitral tribunal. For these reasons, the enforcement of the arbitration awards would contravene the requirements under the Arbitration Law of the Mainland that arbitration agreement must be express and the relevant provisions of the General Rules of the Civil Law on the expression of intention, and would be contrary to the public interests.
The Guangzhou Maritime Court held that: First, the instruments Farenco submitted in its application for recognition and enforcement of the arbitration awards conform to the requirements on the necessary documents under the Supreme People’s Court’s Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (“the Arrangement”). Second, whether an arbitration agreement is tenable falls within the scope of its validity review and, in view of the lack of an agreement between the two parties on the applicable law for ascertaining the validity of the arbitration agreement, pursuant to Article 7(1) of the Arrangement, whether an arbitration agreement in question is tenable should be decided in accordance with the law of the place of arbitration, i.e. the law of Hong Kong SAR. According to the law of Hong Kong SAR, the incorporation terms set out in the subject email constitutes a valid arbitration agreement. Third, violation of relevant provisions of the law of the Mainland is not equivalent to breach of the public interests of the Mainland unless the recognition and enforcement of the arbitration awards will seriously damage the basic principles of the law of the Mainland. The requirements for express arbitration agreement under the Arbitration Law of the Mainland and expression of intention under the General Rules of the Civil Law are outside the ambit of the basic principles of the law of the Mainland. In view of the above reasons, it was held that the two arbitration awards should be recognised and enforced. Besides, in response to Farenco’s application, the Guangzhou Maritime Court had frozen Eastern Ocean’s deposit at the China Merchants Bank (Shenzhen Branch) before handing down a ruling on the case.
First, the case has clarified that whether an arbitration agreement is tenable falls within the scope of validity review. An arbitration agreement is an essential instrument for the application by a party for recognition and enforcement of an arbitration award. It has a direct implication on the jurisdiction of the relevant arbitral tribunal. A review of the validity of an arbitration agreement is obligatory prior to the recognition and enforcement of a relevant arbitration award. In this connection, Article 7(1) of the Arrangement stipulates that the court may refuse to enforce an arbitral award if the arbitration agreement was invalid. In practice, however, there is controversy over whether a broad or strict interpretation should be adopted for invalid arbitration agreements and whether the case of failing to prove the existence of an arbitration agreement should be included. In this case, the court looked beyond the literal meaning for the intent of the provision of the Agreement and ruled that the proof of existence of the arbitration agreement was a prerequisite for it to be valid, which falls within the scope of review of its validity. Agreements that are invalid should cover those cases where their existence cannot be proved.
Secondly, interim measures are granted upon application before an arbitration award is recognised and enforced. The Arrangement is silent on whether the court can, before or after handling an application for recognition and enforcement of an arbitration award, grant interim measures against the property of the party against whom the application is filed. Besides, there is inconsistent interpretations of the Arrangement when it comes to implementation. By reference to the Arrangement Concerning Mutual Recognition and Enforcement of Arbitral Awards between the Mainland and the Macao Special Administrative Region, and according to the provisions of the Civil Procedure Law of the People’s Republic of China and its relevant judicial interpretations, it was held that in the present case upon application by the party concerned, pre-trial interim measures could be granted before the party concerned applied for recognition and enforcement of the arbitration awards and that after such application was filed, the court could, before recognising and enforcing the awards, grant preventive remedies to facilitate the smooth enforcement of the awards for the better protection of the legitimate rights and interests of the party concerned.
CASE No.2： Application for Enforcement of a Hong Kong Arbitration Award by the Applicant Ennead Architects International LLP of the United States
(2016) Su 01 Ren Gang No. 1
On 29 March and 15 May 2013, Ennead Architects International LLP (hereinafter referred to as “Ennead”) of the United States and R&F Nanjing Real Estate Development Co. Ltd. (hereinafter referred to as “R&F”) signed a land lot design contract and agreed on the arbitration clauses stipulating that any disputes shall be submitted to the China International Economic and Trade Arbitration Commission (hereinafter referred to as “CIETAC”) for arbitration in accordance with its prevailing arbitration rules at the time of application for arbitration, and that the place of arbitration shall be the Hong Kong Special Administrative Region. In the wake of a dispute over contract performance, Ennead applied to the CIETAC Hong Kong Arbitration Center for arbitration, seeking an arbitration award ordering R&F to, among others, pay the outstanding design fees and bear the liability for breach of contract.
The CIETAC Hong Kong Arbitration Center accepted the case pursuant to the CIETAC Arbitration Rules, which came into effect on 1 January 2015, and made the arbitration award (2015) Zhong Guo Mao Zhong Gang Cai Zi No. 0003 on 28 November 2015.On 7 June 2016, Ennead applied to the Intermediate People’s Court of Nanjing City, Jiangsu Province for enforcement of Item 3 of the arbitration award, i.e. the part on payment of interest. R&F did not raise any objection.
The Intermediate People's Court of Nanjing City, Jiangsu Province held upon examination that R&F had raised no objection to the arbitration award concerning the present case and had performed the part of the award on the principal amount of design fees as determined, failing only the part on payment of overdue interest under Item 3. The arbitration award in the case also would not be contrary to the public interests of the Mainland. Therefore, pursuant to Articles 1 and 7 of theSupreme People’s Court’s Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (hereinafter referred to as “the Arrangement”), it was held that Item 3 of the arbitration award should be enforced.
This case marks the first time an arbitration award made by a Hong Kong branch of a Mainland arbitration institution in an arbitration seated in Hong Kong SAR has been enforced by a Mainland court. The case clarifies and confirms that the criterion for determining the origin of an arbitration award is the place of arbitration, and accordingly holds that the arbitration award involved in the case is a Hong Kong arbitration award, meeting the applicable conditions of the Arrangement.
Mainland laws impose different examination standards for different types of arbitration awards, and generally use the location of the arbitration institution as the basis for determining the origin of an arbitration award. According to the Notice of the Supreme People’s Court on Issues Relating to the Enforcement of Hong Kong Arbitration Awards in the Mainland (hereinafter referred to as “the Notice”), any ad hoc arbitration awards made in Hong Kong SAR or any arbitration awards made by foreign arbitration institutions in Hong Kong SAR should be examined by the people’s court in accordance with the provisions of the Arrangement. In effect, this clarifies that the criterion for determining the origin of an arbitration award should be the place of arbitration rather than the location of the arbitration institution. Nevertheless, the Notice has no express provision on whether an arbitration award made by a Mainland arbitration institution in an arbitration seated in Hong Kong SAR is a Hong Kong arbitration award. The determination in the present case of the origin of an arbitration award made by a Hong Kong branch of a Mainland arbitration institution according to the place of arbitration is in line with both the spirit of the Notice and prevailing international standards.
CASE No.3： Application for Recognition and Enforcement of a Hong Kong Arbitration Award by the Applicants David Dein Consultancy Limited and Bramley Corporation Ltd
(2020) Jing 04 Ren Gang No. 5
On 24 August 2018, David Dein Consultancy Limited (hereinafter referred to as “David Dein) and Bramley Corporation Ltd (hereinafter referred to as “Bramley”) each signed with Beijing SinoboGuoan Football Club (hereinafter referred to as “Guoan”) a copy of the same Consultancy Agreement agreeing that any disputes should be submitted to the Hong Kong International Arbitration Centre (hereinafter referred to as “HKIAC”) for settlement by arbitration, with English law as the applicable law. Accordingly, Guoan submitted a notice of arbitration to the HKIAC on 21 November 2018. Subsequently, David Dein and Bramley filed a counterclaim. On 5 March 2020, the HKIAC made an award (case number: HKIAC/A18211) ruling that Guoan had committed a repudiatory breach of the Consultancy Agreement and should pay the relevant fees and interest to David Dein and Bramley.
After the arbitration award had taken effect, David Dein and Bramley applied to the Beijing Fourth Intermediate People’s Court for recognition and enforcement of the award. The respondent Guoan contended that the People’s Court should rule against recognition and enforcement of the arbitration award. The reasons stated included invalidity of the arbitration agreement involved, composition of the arbitral tribunal being contrary to the agreement between the parties and the law of the Hong Kong Special Administrative Region, arbitral proceedings not being in accordance with the agreement between the parties, violation of social and public interests, and that recognition of the amount awarded should be refused.
The Beijing Fourth Intermediate People’s Court held upon examination that first, the parties in the present case agreed only on the application of substantive English law as the governing law of the agreement, without stating explicitly the law to be applied in confirming the validity of the foreign-related arbitration agreement. As both the location of the arbitration institution and the seat of arbitration were in Hong Kong SAR, the Arbitration Ordinance of Hong Kong should apply in the conduct of the examination, and the agreement was valid under the relevant provisions. Second, according to the 2018 HKIAC Administered Arbitration Rules in force during the arbitration, the composition of the arbitral tribunal was not in breach of the rules. The fact that the arbitrator and the directors of the two companies held office in the English Football Association did not necessarily mean that the arbitrator had conflict of interest with the two companies. As the parties had knowledge of the public information held by the arbitral tribunal, no disclosure was needed and no procedural impunity was involved. Third, some copies of the arbitration documents produced by the applicant and the amount of expenses in his bill did not serve to prove that the arbitral proceedings were inconsistent with the agreement. Such information was public information of the arbitral proceedings and was not in breach of the confidentiality clause. Fourth, public interests, which concerned the interests of the entire community, should be enjoyed by the general public and were different from the interests of the contract parties. Although part of Guoan’s assets were state-owned, it did not follow that all matters relating to those assets should be deemed as public interests. In light of the above, it was held that the arbitration award HKIAC/AC18211 made by the HKIAC of the Hong Kong Special Administrative Region should be recognised and enforced.
1. The present case clarifies that where a party relies on the clause “[t]he composition of the arbitral tribunal or the arbitral proceedings was not in accordance with the agreement between the parties” in Article 7 of the Arrangement to contend that there are procedural issues of disclosure and withdrawal on the part of an arbitrator, the Court should make a reasonable judgment on the basis of both the arbitration rules and life experience in examining whether the issues are sufficient to affect the impartiality and independence of the arbitration. In the present case, the arbitrator’s connection and interaction with others for the purposes of work, daily living, study and other social activities, and his holding of office in the same organisation with the people concerned did not necessarily constitute any conflict of interest affecting the impartiality of the arbitration procedure under the withdrawal rules. Arbitrators may choose not to disclose matters not relating to their independence or the impartiality of the arbitration.
2. Elaborating on the issue of public interests, the present case is of considerable reference value. Public interests, which concern the interests of the entire community, should be enjoyed by the general public and are essential for the development and survival of the society as a whole, thus having a public and social nature and are different from the interests of the contract parties. The arbitration involved in this case dealt with a contractual dispute between civil subjects of equal status. The outcome would only affect the contract parties and have nothing to do with public interests. Although part of the assets of the respondent, Guoan, were state-owned, it did not follow that all matters relating to those assets should be deemed as public interests.
CASE No.4： Applicant Raffles International Limited Application for the Enforcement of a Hong Kong International Arbitration Centre Arbitral Award by Applicant Raffles International Limited
(2016) Jin 01 Ren Gang no.1
On 15 January 2007, Raffles International Limited（hereinafter “Raffles”）and Haihang Tianjin Center Development Co., Ltd.（hereinafter “Haihang”）entered into a Licence Agreement on the use of logo “Raffles” and trade mark “Raffles”. On the same day, Raffles Hotel Management (Beijing) Company Limited (a connected company of the Raffles conglomerate) (hereinafter “Raffles -Beijing”and Haihang entered into a Hotel Management Agreement on the collaboration on hotel management and operation. The Licence Agreement provides that any disputes, issues or controversies arising from or in connection with the contract shall be submitted to arbitration before the Hong Kong International Arbitration Centre (hereinafter"HKIAC") for final resolution pursuant to the arbitration rules valid at the time of making the application for arbitration. The seat of the arbitration is Hong Kong SAR. The Licence Agreement also provides that, if the Hotel Management Agreement or any other transaction agreements are terminated for any reasons, the Licence Agreement shall be terminated immediately. The Hotel Management Agreement stipulates that relevant disputes shall be submitted to arbitration before the China International Economic and Trade Arbitration Commission Shanghai Sub-Commission (hereinafter “CIETAC Shanghai”).
On 20 January 2012, Raffles applied to HKIAC for arbitration of the disputes relating to the Licence Agreement. On 29 January 2012, Raffles -Beijing applied to CIETAC Shanghai for arbitration of disputes relating to the Hotel Management Agreement. Thereafter, the HKIAC made an award (Case No.: HKIAC/A12016) ordering that Haihang pay Raffles the corresponding sum with interest. Raffles applied to The First Intermediate People’s Court of Tianjin for enforcement of the award. Haihang, the Respondent, resisted the enforcement on the grounds, inter alia, that the award dealt with a dispute not falling within the ambit of the arbitration clause, in breach of Article 7 of the Supreme People’s Court’s Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administrative Region (hereinafter “Arrangement”).
Having reported to the Higher People’s Court of Tianjin and the Supreme People’s Court, The First Intermediate People’s Court of Tianjin held that: first, the fact that HKIAC award involved the Hotel Management Agreement did not constitute decisions on matters beyond the scope of the submission to arbitration, and therefore did not fall within the circumstances prescribed by Article 7(1)(3) of the Arrangement; second, the tribunal’s handling of the issue of jurisdiction did not breach parties’ agreement and the laws of the Hong Kong Special Administrative Region, and therefore did not fall within the circumstances prescribed by Article 7(1)(4) of the Arrangement; third, the challenge raised by Haihangwas not in relation to the impartiality or the independence of the arbitrators, but the jurisdiction of the tribunal and, as such the tribunal had the power to decide the issue without the need to resort to the Council of the Arbitration Centre for a determination. Therefore, the subject matter of the challenge raised did not fall within the circumstances prescribed by Article 7(1)(4) of the Arrangement. To sum up, The First Intermediate People’s Court of Tianjin held that the partial award and final award (Case No.:HKIAC/A12016) made by the HKIAC on 19 November 2014 and 19 March 2015 respectively could be enforced in accordance with Article 1, 6 and 7 of the Arrangement.
In respect of whether an award contains decisions on matters beyond the scope of submission to arbitration prescribed by Article 7(1)(3) of the Arrangement, the following rules are clarified: Where the tribunal’s adjudication is confined to the fact-finding and reasoning sections of the award in respect of disputes beyond the scope of the tribunal’s jurisdiction, and the dispositive section of the award does not concern other agreement-related disputes, the award did not contain matters beyond the scope of submission to arbitration. In the present case, the matters Raffles submitted to arbitration before HKIAC were matters relating to the performance of the Licence Agreement. As the Licence Agreement and the Hotel Management Agreement are closely connected, the award touched on the Hotel Management Agreement in its section on fact-finding and reasoning. This analysis and determination could not be avoided in the course of dealing with a controversy arising from the Licence Agreement. The tribunal eventually merely made the award on issues arising from the Licence Agreement mentioned in the Request for Arbitration without making specific award decisions on issues arising from the Hotel Management Agreement. The relevant disputes fell within the scope of parties’ submission to arbitration pursuant to the arbitration clause. Therefore, the award in the present case did not give rise to the circumstances prescribed by Article 7(1)(3) of the Arrangement, where matters beyond the scope of the submission to arbitration were decided by the award.
CASE No.5： Application for enforcement of an arbitral award made by the Hong Kong International Arbitration Centre by Bensley Design Group International Consulting Co., Ltd.
(2019) Chuan 01 Ren Gang No. 1
I. Basic facts
On 13 November 2013, Bensley Design Group International Consulting Co., Ltd. (hereinafter referred to as “Bensley Co.”) signed a Service Agreement on Landscape Design for Mandarin Oriental, Chengdu, China (hereinafter referred to as “Service Agreement”) with Chengdu Mind River Land Co., Ltd. (hereinafter referred to as “Mind Co.”) and Chengdu Chenchuan Industrial Co., Ltd. (hereinafter referred to as “Chenchuan Co.”). Under the Service Agreement, any disputes, controversies or claims arising from or related to this contract or the breach, termination or invalidity of this contract shall be, in accordance with the then effective Arbitration Rules of the United Nations Commission on International Trade Law (hereinafter referred to as “Arbitration Rules”), resolved by arbitration in Hong Kong SAR. Due to a dispute arising in the course of the performance of the contract, Bensley Co. applied to the Hong Kong International Arbitration Centre (hereinafter referred to as “HKIAC”) for arbitration on 5 March 2018. On 5 May 2019, the arbitral tribunal made the Final Award, which was in support of all arbitration requests of Bensley Co. On 4 June 2019, the arbitral tribunal issued the Correction of the Final Award, where corrections and updates were made to the Final Award. Subsequently, Bensley Co. applied to the Chengdu Intermediate People’s Court in Sichuan Province for enforcement of the above arbitral award.
In their joint defence, Mind Co. and Chenchuan Co. stated that firstly, the selection of arbitrator by direct appointment of a sole arbitrator contravened Article 8 of the Arbitration Rules which required that the views of all parties shall be sought before using the list-procedure, thus falling within the situation stipulated in Article 7(4) of the Supreme People’s Court’s Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (hereinafter referred to as “the Arrangement”). Secondly, the arbitrator failed to deliver relevant documents relating to the arbitration to the Respondents in accordance with the Measures for the Administration of China Appointed Attesting Officers (Hong Kong) (Order No. 69 of the Ministry of Justice)(hereinafter referred to as “the Measures”), which was a situation stipulated in Article 7(2) of the Arrangement. It has therefore requested that the application be rejected.
Firstly, regarding the composition of the arbitral tribunal in the present case, the Chengdu Intermediate People’s Court in Sichuan Province held, upon examination, that the HKIAC’s exercise of discretion to appoint a sole arbitrator during the arbitral proceedings in question was in compliance with the Arbitration Rules, to which both parties to the Service Agreement had agreed to adopt. Secondly, regarding whether the arbitral tribunal had delivered notice to the Respondents in an appropriate manner, since in the course of the arbitral proceedings the arbitrator had arranged for delivery of relevant documents to the addresses designated by both parties in the Service Agreement and the Respondents had also expressly acknowledged receipt of the same, it was held that the delivery requirements set out in Article 2 of the Arbitration Rules had been complied with and that there was no question of the arbitrator failing to deliver notice to the Respondents in an appropriate manner. The Respondents’ contention that documents relating to the arbitration should be delivered to the Respondents in accordance with the Measures was held incompatible with the Arbitration Rules and was not accepted.
It is established in the present case that the arbitration rules applicable to the arbitral proceedings in question should be the basis on which to determine whether a notice has been successfully delivered. Given that “non-delivery of notice pursuant to the law” is a ground commonly used by respondents for refusing the enforcement of arbitral awards made in Hong Kong SAR, it is necessary to first establish the legal basis of the delivery procedure in order to determine whether a notice has been delivered successfully pursuant to the law. In the present case, both parties agreed in the contract that any disputes, controversies or claims arising from or related to this contract or the breach, termination or invalidity of this contract shall be resolved in accordance with the then effective Arbitration Rules. Due respect has therefore been given to the choice of the parties concerned in this case. Relevant documents have been delivered to the addresses designated by both parties in the Service Agreement pursuant to the relevant requirements of the Arbitration Rules and the Respondents have also expressly acknowledged receipt of the same. There is no question of the arbitrator failing to deliver notice to the Respondents in an appropriate manner. The Respondents’ contention that documents relating to the arbitration should be delivered to the Respondents in accordance with the Measures was held incompatible with the Arbitration Rules.
Cases of the courts of the Hong Kong Special Administrative Region
CASE No.1： CL v SCG
 2 HKLRD 144
This was a hearing of an application by the Respondent on, as a preliminary issue, whether the enforcement of an arbitral award against the Respondent is time-barred under s. 4(1)(c) of the Limitation Ordinance (Cap. 347) (“Limitation Ordinance”).
The Applicant proceeded with arbitration administered by an arbitral centre in Hong Kong against the Respondent and obtained an award on 17 February 2011 in its favour, ordering the Respondent to forthwith pay the Applicant the sum of USD 2,173,000 with interests and costs of the arbitration.
In March 2011, the Applicant demanded payment from the Respondent of the sums due under the award and subsequently costs of the tribunal, yet to no avail. On 7 July 2011, the Applicant commenced proceedings to enforce the award in the People’s Court on the Mainland, which was rejected by that Court. Later, the Applicant appealed the decision to the Higher People’s Court and made an application for a retrial which, however, was rejected by the Higher People’s Court on 1 March 2016.
On 6 February 2018, the Applicant made an ex parte application and successfully obtained leave and an order to enforce the award under s. 2GG of the Arbitration Ordinance (Cap. 341) (repealed) (“Arbitration Ordinance”) in Hong Kong (“Order”). On 6 June 2018, the Respondent applied for an inter partes hearing to set aside the Order on various bases including that the application was time-barred by s. 4(1)(c) of the Limitation Ordinance. On 24 July 2018, the question of limitation was ordered to be tried as a preliminary issue.
1.When did the cause of action to enforce the award in this case begin to accrue? (“Issue 1”)
2.Whether the cause of action, and hence the effects of time limitation under s. 4(1)(c) of the Limitation Ordinance, was suspended from the time when the Applicant applied to the People’s Court in the Mainland for enforcement on 7 July 2011 to 1 March 2016, when its application was rejected by the Higher People’s Court, in view of Article 2 of the Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (“Arrangement”)? (“Issue 2”)
The Respondent submitted that the limitation period commenced from 17 May 2011, 3 months from the date of the award, which was argued to be a reasonable time for the Respondent to pay and honour the award, meaning that the limitation period would have expired on 18 May 2017. Alternatively, the Respondent argued that the latest time from which the cause of action would have accrued was 8 July 2011, i.e. when the Applicant applied to the People’s Court in the Mainland for enforcement of the award. This places the expiry of the limitation period on 9 July 2017.
On the other hand, the Applicant contended that the limitation period only commenced on the date on which the Respondent filed its submission in opposition to the Applicant’s application in the People’s Court in the Mainland, i.e. 11 March 2012. The Applicant argued that despite that no payment was made by the Respondent after the payment demands made by the Applicant in March 2011, no inferences can be drawn from the Respondent’s lack of response as to whether it was disputing the award. The Applicant stated that the Respondent only demonstrated its clear and unequivocal intention not to be bound by the award when it filed its submissions in opposition. Thus, the Applicant argued that only on 11 March 2012 did the cause of action for enforcement accrue.
The court did not accept that the cause of action only accrues when a clear and unequivocal intention not to be bound by the award is demonstrated, noting a similar argument was rejected by International Bulk Shipping and Services Ltd v Minerals and Metals Trading Corp of India  1 All ER 1017. The court explained that accepting the argument means allowing the award debtor to indefinitely defer and postpone the accrual of its creditor’s cause of action and delaying its right to enforce the debt due under the award. Following International Bulk Shipping and Services Ltd v Minerals and Metals Trading Corp of India  1 All ER 1017 and Agromet Motoimport Ltd v Moulden Engineering Ltd  1 WLR 762, the court held that the cause of action on the award accrued “from the breach occasioned by the defendants’ failure to honour the award when called upon to do so”. Hence, limitation begins on the date on which the implied promise to perform the award is broken.
The court further noted that the cause of action arose when the Respondent failed to make payment within a reasonable time of the publication of the award and demand being made. The court noted that what a reasonable time was depended on the terms of the award as well as the facts and circumstances of the case. In the present case, since the Respondent was ordered under the award to pay the Applicant “forthwith”, a reasonable time for payment was held to lapse at the latest by 8 April 2011, i.e. 21 days after the Applicant’s demand for payment, and therefore the limitation period expired on 8 April 2017.
The Applicant argued that its accrual of the cause of action was suspended from 7 July 2011 to 1 March 2016, meaning the date on which the Applicant applied to the People’s Court in the Mainland for enforcement to the date when the application was finally rejected by the Higher People’s Court. The Applicant referred to Article 2 of the Arrangement and s. 40C of the Arbitration Ordinance, which prohibits concurrent filing of applications for enforcement of an arbitral award in the Mainland and Hong Kong, and pointed out that the prohibition targets the mischief of double enforcement and double recovery(Shenzhen Kai Loong Investment and Development Co Ltd v CEC Electrical Manufacturing (International) Co. Ltd [2001-2003] HKCLRT 649) and, as such, the Applicant should not be barred from enforcing its award in Hong Kong by operation of s. 4(1)(c) of the Limitation Ordinance simply because it had attempted enforcement in the Mainland.
Nonetheless, the court held that however unfair the consequence of the “no concurrent enforcement rule” may be, absent an express provision in the Arbitration Ordinance or the Arrangement providing otherwise, time under s. 4(1)(c) of the Limitation Ordinance should not stop running, even during the course of the enforcement proceedings in the Mainland. Therefore, the Applicant’s contention that the accrual of cause of action was suspended during the time of enforcement proceedings in the Mainland was rejected.
For reasons set out above, the court held that enforcement of the award was barred by s.4(1)(c) of the Limitation Ordinance when proceedings for leave for enforcement in Hong Kong were instituted on 6 February 2018.
Respondent’s application for setting aside the Order granted.
(a)Time limitation begins on the date when the implied promise to perform the award is broken, which is when the award debtor fails to perform the award within a reasonable time of the publication of the award and demand being made. What is a reasonable time for performing the award depends on the terms of the award as well as the facts and circumstances of the case.
(b)This case shows that time under the Limitation Ordinance still runs despite the fact that an award creditor must have failed to recover the total amount due under an award in one place before seeking enforcement in respect of outstanding liabilities in another, as provided for under Article 2 of the Arrangement. The unfair consequences that this may give rise to, such as the hardship the Applicant in the present case faces, highlights the defects in the original Arrangement and the necessity of reform with respect to the prohibition against concurrent enforcement in both places under Article 2 of the Arrangement.
CASE No.2：Gao Haiyan & Anor v. Keeneye Holdings Ltd & Anor
 1 HKLRD 627
By way of a share transfer agreement and a supplemental share transfer agreement (“the Agreements”), the Applicants transferred the shares in a Hong Kong company to the Respondents, which held beneficial interest in a joint venture coal business in Mainland China. The Agreements were governed by PRC law and provided for arbitration of disputes at an arbitral body in the Mainland.
Pursuant to Article 37 of the Arbitration Rules of the arbitral body, mediation-arbitration is to be conducted either by the tribunal or presiding arbitrator, or provided that the parties agree, by any third party. The tribunal held two sittings. After the first sitting, the tribunal on its own initiative suggested to the parties that the Respondents pay the Applicants RMB 250 million to settle the case.
Before the second sitting, in the absence of the Respondents’ appointee and the Chief Arbitrator, the Applicants’ appointed arbitrator, and a person related to the Respondents upon the invitation of the Secretary General of the arbitral body, attended a purported mediation-arbitration in the form of a private meeting. The Secretary General of the arbitral body who was not appointed by the parties’ was alleged to be the host of the private meeting. It was alleged that the Secretary General of the arbitral body asked the person related to the Respondents to persuade the Respondents into accepting the suggestion put forward by the tribunal.
The parties could not settle. The tribunal found in favour of the Applicants and recommended (yet did not require) a compensation of RMB 50 million. At no point did the Respondents complain about the tribunal’s conduct, fearing that to do so might antagonise the tribunal. The Respondents appealed against the award of the tribunal to the Intermediate People’s Court where the arbitral body situates (“Xi’an Court”) contending that the Secretary General of the arbitral body had manipulated the outcome of the arbitration in contravention of the law and the arbitration rules. The appeal was dismissed.
Subsequently, pursuant to sections 2GG and 40B of the Arbitration Ordinance (Cap. 341) (repealed) (“Arbitration Ordinance”), the Applicants obtained leave to enforce the award. The Respondents, in applying to set aside the leave, contended that it would be contrary to public policy to enforce the award because it was tainted by bias or apparent bias. The Respondents argued that the private meeting over dinner among the Applicants’ appointed arbitrator, the Secretary General of the arbitral body and the person related to the Respondents, was an attempt to pressurise the Respondents to pay RMB 250 million to the Applicants in return for a decision in the Respondents’ favour. The first instance judge held that the award was tainted by apparent bias. He further held that the Respondents did not waive their entitlement to complain about bias in proceeding with a second sitting after the private meeting. The Applicants appealed.
1.Whether the public policy ground applicable to the enforcement of a Convention award are applicable to a Mainland award and how high is the relevant threshold? (“Issue 1”)
2.Whether the Respondents waived their rights to complain about the non-compliance with the Arbitration Rules of the arbitral body? (“Issue 2”)
3.Whether apparent bias (as opposed to actual bias) may be sufficient to constitute the public policy ground for refusing enforcement of the award? (“Issue 3”)
4.Whether, on facts, the alleged apparent bias constituted the public policy ground for refusing enforcement of the award? (“Issue 4”)
It was held that the jurisprudence on refusal to enforce an award on the public policy ground applicable to a Convention award is also applicable to a Mainland award. The relevant threshold is a very high one, since comity, which was held to be “woven” into the concept of public policy, has to be given effect where a foreign (including a Mainland) award is concerned. On this point, the court cited Hebei Import & Export Corp v Polytek Engineering Co Ltd (1999) 2 HKCFAR 111, in which the court remarked that, to give effect to comity, enforcement of foreign awards would not be refused unless such enforcement would be contrary to the fundamental concepts of morality and justice of Hong Kong, of which conclusion would take a very strong case to reach.
The court held that a party to an arbitration relying on breach of arbitration rules should do so promptly; it should not wait and see how its claims turn out before pursuing his complaint; nor should it proceed with the arbitration as if there had been compliance. As such, the Respondents should not have only submitted to the tribunal a supplemental submission after the private meeting, or attended a second hearing before the tribunal without making a complaint. The court also held that the attack by the Respondents against the Applicants’ integrity was not a substitute for a complaint about bias of any sort or impropriety against the tribunal or the Secretary General of the arbitral body. For these reasons, the Respondents are deemed to have waived their rights to complain about bias.
The court pointed out that, had the complaint been raised, action might have been taken by the tribunal or the People’s Court where the arbitral body situates to remedy the situation, both of which would have been in a much better position to ascertain facts to decide on the issue of bias. The court ruled that although the refusal by the People’s Court where the arbitral body situates to set aside the award for bias was not binding on Hong Kong court, and despite no estoppel resulted from the aforementioned Court’s decision, Hong Kong court was entitled to give serious consideration to the aforementioned Court’s decision in deciding whether to enforce the award.
On a careful interpretation of the views expressed in Hebei Import & Export Corp v Polytek Engineering Co Ltd, the court was of the view that apparent bias alone may be sufficient to justify refusal to enforce an award, though a party seeking to resist enforcement on this ground has to reach a higher threshold than the one for doing so on actual bias, and the court should be slow to exercise such discretion.
The court assessed the relevant facts and found that there was no apprehension of apparent bias based on the “fair-minded observer”. The court held that although one might share the learned Judge’s unease about the way in which the mediation was conducted because mediation is normally conducted differently in Hong Kong, whether that would give rise to an apprehension of apparent bias, may depend also on an understanding of how mediation is normally conducted in the place where it was conducted. In this context, due weight must be given to the decision of the People’s Court where the arbitral body situates refusing to set aside the award.
The court reiterated that enforcement of an award should only be refused if to enforce it would be contrary to the fundamental conceptions of morality and justice of the forum, which is Hong Kong in the present case. Accordingly, the court should not refuse to enforce an award in Hong Kong solely because mediation-arbitration in the form of a private meeting might give rise to an appearance of apparent bias in Hong Kong.
The court held that a party to an arbitration relying on breach of the arbitration rules should do so promptly; it should not wait and see how its claims turns out before pursuing his complaint, or proceed with the arbitration as if there had been compliance.
Enforcement of an award would only be refused if enforcement would be “contrary to the fundamental conceptions of morality and justice” of the forum. The court respects the usual way of conducting mediation in the forum where the mediation takes place and would not invoke the public policy grounds lightly solely because it is conducted differently from the way it is conducted locally.
CASE No.3： Xiamen Xinjingdi Group Ltd v. Eton Properties Ltd & another
 4 HKLRD 353;
CACV 106/2008 & CACV 197/2008
The 1st and 2nd Appellants, two Hong Kong companies, were the sole shareholders of Legend Properties (Hong Kong) Co Ltd (“Hong Kong Legend”), and part of the Eton Group. Hong Kong Legend wholly owned a Mainland company which owned land in Xiamen (the “Property”).
The Applicant, a Mainland company, agreed to pay RMB 120 million to the Appellants for the right to develop, operate and to receive profits from the Property; and the Appellants agreed to transfer to the Applicant their shares in Hong Kong Legend and to deliver the Property to the Applicant (the “Agreement”). The Agreement also contained an arbitration clause.
The Appellants did not deliver the Property to the Applicant and purported to terminate the Agreement on the basis that performance would be contrary to PRC law. Consequently, the Applicant commenced arbitration proceedings in Beijing (the “First Arbitration”) and an award (the “Award”) was made in its favour ordering the Appellants to, inter alia, “continue to perform the agreement”. The Applicant then obtained an ex parte enforcement order of the Award in Hong Kong (the “Order”).
The Appellants applied to set aside the Order, arguing that enforcement should be refused as being contrary to public policy under the Arbitration Ordinance (Cap.341) (“Arbitration Ordinance”) on the basis that performance was impossible because: (a) construction on the Property had commenced; and (b) a restructuring of the Eton Group, which was implemented during the course of the First Arbitration, had diluted and transferred their shares in Hong Kong Legend to their parent company. The judge refused to set aside the Order.
In the meantime, the Appellants sought from the arbitral body a determination (the “Second Arbitration”) on whether the parties had been discharged from the Agreement. The arbitral body ruled against the Appellants on this.
By the time of the present hearing to deal with the Appellants’ appeal against the judge’s refusal to set aside the Order, the development of the Property had been completed and 99% of the units had been sold to third parties. The Appellants submitted that as performance was impossible, the Applicant was really looking at “further stages” remedies such as damages in lieu of or an account of profits rather than any rights in the Property itself; and offered an undertaking that they would commence further arbitration before the arbitral body for a determination of such alternative remedies (the “Undertaking”). Alternatively, it was said that the court could remit the matter to the arbitral body so that directions could be obtained or adjourn the appeal pending such directions.
1.Whether it was impossible for the Appellants to perform the Agreement? (“Issue 1”)
2.Whether, in light of issue 1, refusal to enforce the Award on public policy grounds can be justified? (“Issue 2”)
3.Whether the court had jurisdiction to remit the matter to the arbitral body? (“Issue 3”)
The court reckoned the Undertaking was simply meaningless, given that the Appellants had had ample opportunity to raise squarely before the arbitral body the issue of impossibility of performance. The court was of the view that there was no rational explanation for their failure to do so except the very obvious one that the omission was intentional. The court rejected the Appellants’ arguments that the construction on the Property having been commenced; that the dilution of shares as a result of the restructuring of the Eton Group and that most units of the Property having been transferred to third parties barred the Appellants from performing the Agreement. The court further found that they were calculated risks and self-inflicted, of which consequences the Appellants must bear. The court also remarked that the risk of imprisonment for contempt, which the Appellants raised, was entirely fanciful, since the Order did not specify any time for performance and a person who genuinely is unable to carry out the Order cannot be made liable for the contempt.
The court held that, in considering whether or not to refuse the enforcement of the Award on public policy grounds, the court does not look into the merits or at the underlying transaction. Its role is confined to determining whether such grounds existed for refusing to enforce the award because it would be contrary to public policy. The court’s role should be as mechanistic as possible. Accordingly, the court ruled that impossibility of performance was not relevant at the registration stage of the Award and was not a sufficient reason to justify a refusal of enforcement under public policy grounds.
It was held that the court could not remit the matter to the arbitral body. Under Arbitration Ordinance, the court may enforce the Award or refuse to enforce it but there is no jurisdiction to remit.
In considering whether to refuse the enforcement of the Award, the court does not look into the merits or at the underlying transaction. The court’s role is confined to determining whether grounds for refusal of enforcement existed. On this basis, it was held that impossibility of performance is not a relevant factor at the registration/recognition stage of enforcement and, accordingly, it would not be a sufficient reason to justify refusal of enforcement on the grounds that enforcement would be contrary to public policy.
CASE No.4： Shandong Hongri Acron Chemical Joint Stock Company Limited v. PetroChina International (Hong Kong) Corporation Limited
 4 HKLRD 604
The Appellant as the buyer and the Respondent as the supplier contracted for the supply of a total of 3,937.448 tonnes of sulphur in exchange for purchase price of US$ 3,051,522.20.
The Appellant rejected 3,810,578 tonnes of the sulphur for incorrect specification of the same supplied. It claimed the return of the balance of the purchase price in the sum of US$ 2,953,198 in respect of the rejected sulphur.
Parties submitted their dispute before a tribunal of an arbitral body in the Mainland. The tribunal made a final award in favour of the Appellant, ordering that:
(a)The Appellant shall return 3,810.578 tonnes of sulphur to the Respondent;
(b)The Respondent shall return US$ 2,953,198 (being the transaction payment received) to the Appellant;
(c)The Respondent shall pay damages as well as miscellaneous fees and costs incurred by the Applicant, plus interest (for late payment, if applicable);
The Respondent’s position was that repayment of the balance of the purchase price and payment of the other sums under items (b) and (c) above were conditional upon the return of the rejected sulphur to the Respondent “in the same status and quality” as and when the same was delivered to the Appellant.
In response to the Respondent's written application and enquiries, the arbitral body issued three letters (“the Arbitral Body’s Letters”), the first two being the arbitral body’s confirmation of the Respondent’s interpretation of the award, with the third stating the tribunal’s view that the first two were “supplementary explanations” of the award and formed part of it.
Neither the Respondent’s letters requesting clarification with a view to the production of a supplemental award nor the arbitral body's responses contained in the second and third of the Arbitral Body’s Letters were copied to the Appellant. The Appellant disagreed with the Respondent’s interpretation of the award and sought leave to enforce items (b) and (c) of the award in Hong Kong. This was opposed by the Respondent who also applied for leave to enforce item (a) of the award. The judge in the Court of First Instance ruled in favour of the Respondent. Then, the Appellant appealed to the Court of Appeal.
1.Whether, as a matter of award recognition, the court should “enter judgment in terms of the award, order or direction”, having regard to s. 2GG(1) of the Arbitration Ordinance (Cap.341) (repealed) (“Arbitration Ordinance”)? (“Issue 1”)
2.Whether the obligations stated in items (b) and (c) above be conditional or dependent on item (a), in light of the wording of the award and the obligation of the enforcing court? (“Issue 2”)
3.Whether the obligations under item (a) were independent of those under item (b) under the law of restitution? (“Issue 3”)
4.Whether the Arbitral Body’s Letters constituted a supplemental or additional award pursuant to Article 56 of the Arbitration Law of the PRC (“Arbitration Law”) and / or the relevant provision of the Arbitration Rules of the arbitral body in the Mainland? (“Issue 4”)
5.Whether the questions about the validity of the Arbitral Body’s Letters should have been dealt with by the relevant court in the Mainland, not the enforcement court in Hong Kong? (“Issue 5”)
Citing authorities holding that award enforcement should be “almost as a matter of administrative procedure” and that there is an important policy interest in ensuring the effective and speedy enforcement of arbitration award, the court held that it should respect the plain intent of the award in question and the court is not entitled to go behind the award by exploring the reasoning of the tribunal or second-guessing its intention. Therefore, under s.2GG(1) Arbitration Ordinance, an award entered as a judgment had to be entered “in terms of the award” at the award recognition stage.
The court was of the view that, the Arbitral Body’s Letters aside, it was plain that the award did not say that payment obligations under items (b) and (c) were conditional or dependent on those under item (a). Thus, in the context of enforcing items (b) and (c) by means of entering a judgment “in terms of the award”, no such condition should be imposed. To do otherwise would be to alter, rather than to enforce, the award. By the same token, there was no justification for imposing the further condition as to the status and quality of the sulphur.
The court rejected the Respondent’s submissions that the obligations under items (a) and (b) were not independent ones since they dealt with a restitution situation for these reasons: first, the court should not second-guess the intention of the tribunal; second, the law of restitution may vary from one jurisdiction to another, and it is for the tribunal seized of the arbitration to apply the applicable law; third, even if one were to assume that return of the goods and repayment of the price already paid are not mutually independent of each other, it did not follow that the respective awards must be conditional on each other. The rights and obligations under the law of restitution must not be confused with awards and orders as means to give effect to those substantive rights and obligations.
The Arbitral Body’s Letters did not constitute a supplemental or additional award pursuant to Article 56 of the Arbitration Law and / or the relevant provision of the Arbitration Rules of the arbitral body in the Mainland. Thus, the views expressed by the tribunal or in the Arbitral Body’s Letters were simply inadmissible in the enforcement proceedings in Hong Kong.
The court rejected the Respondent’s submissions that all questions about the validity of the Arbitral Body’s Letters as supplemental awards should have been dealt with by the relevant court in the Mainland, not the enforcement court in Hong Kong for these reasons: first, the enforcement court did not have to accept every piece of paper placed before it that was said to be an award or supplemental award as such, despite glaring discrepancies between the description of what amounted to an award or supplemental award in the relevant law or rules and what the court found on the face of the so-called award or supplemental award; second, the enforcement court is entitled to look at its own public policy relating to enforcement of foreign or Mainland awards. In the present case, public policy in terms of the rules of natural justice were at issue so far as the second and third of the Arbitral Body’s Letters were concerned.
Enforcement of arbitral awards should be "as mechanistic as possible". The enforcing court is neither entitled nor bound to go behind the award in question, explore the reasoning of the arbitral tribunal or second-guess its intention. Hong Kong court as the enforcement court is entitled to determine whether a document constituted an award or a supplemental award, or a part thereof. The court is also entitled to decide whether or not to refuse enforcement of an award on the basis of its own public policy relating to enforcement of foreign or Mainland awards. Observance of the rules of natural justice, which the Arbitral Body’s Letters in the present case concerned, is to be taken into account by the court.
CASE No.5：Guo Shun Kai v. Wing Shing Chemical Co Ltd
 3 HKLRD 484
Pursuant to an arbitration between the Applicant and the Respondent administered by an arbitral body in the Mainland, an award was made against the Respondent (the “Award”). The Award required the Respondent to pay the Applicant: (1) compensation for economic loss in the amount of RMB 29,195,470.58 and interest thereon in the amount of RMB 12,293,716.33; (2) legal costs in the amount of RMB 500,000; and (3) costs of the arbitration proceedings in the amount of RMB 675,473 and costs of the arbitrators in the amount of RMB 134,574.
Thereafter, the Applicant obtained an order granting leave to enforce the Award in Hong Kong (the “Order”).
The Respondent applied to the People’s Court in the Mainland to set aside or dismiss the Award on the grounds that the Award exceeded the scope of the arbitration and the procedures of the arbitration were contrary to law. The Hong Kong court was of the view that the application was not an appeal on the merits of the underlying dispute.
Subsequently, the Respondent took out a summons (the “Summons”) to set aside or vary the Order granting leave pursuant to Order 73 rule 10(6) of the Rules of the High Court (Cap. 4A) (“RHC”), which was the matter before the court in the present case.
1.Whether the court has jurisdiction to adjourn proceedings relating to the enforcement of a Mainland award? (“Issue 1”)
2.What factors should a court take into account in considering the application for security upon adjournment of the Summons dealing with an application to set aside or vary the Order? (“Issue 2”)
In respect of the adjournment of proceedings, the court pointed out that the absence of provisions specifically on adjournment in relation to the enforcement of a Mainland award, of which equivalent provisions in relation to the enforcement of an ordinary award or a convention award are present in the Arbitration Ordinance, does not mean the court has no jurisdiction to adjourn enforcement proceedings on a Mainland award. The court held that it had general and inherent power to regulate its own proceedings including adjournment, which power is presupposed in Order 73 rule 10A of the RHC
The court referred to principles set out in Soleh Boneh International Ltd v Government of the Republic of Uganda  2 LLR 208, where the English court decided to adjourn hearings and require the provision of security in the entire amount of the award pending the Swedish court’s determination of whether the award was binding. On appeal of that case, the court considered two factors – the strength of the argument that the award is invalid, on a brief consideration by the court, as well as the ease or difficulty of enforcement of the award and whether enforcement would be made more difficult by movement of assets or by improvident trading if enforcement was delayed. The stronger the argument for invalidity of award, or the stronger the case for difficulty of enforcement as a result of delay in enforcement, the more likely the provision of security is ordered.
In light of the above principles, the court considered a number of aspects of the present case, including the fact the Respondent had not produced any documents stating grounds or merits of its application to the People’s Court in the Mainland to set aside or dismiss the Award in support of its contention that it was “manifestly invalid”; the fact that the Respondent had changed its registered office; the fact that the Respondent had sold its industrial property, the fact that the Respondent’s financial performance was deteriorating and shares in the Respondent company (described as obsolete asset) were sold by its parent company shortly after the Award was made; as well as the publicly announced total assets (approximately HK$45.04 million) and unaudited net liabilities (approximately HK$143.50 million).
On the basis of the foregoing factors, and the fact that no submission on the specific amount of security that would be beyond the capacity of the Respondent was made, the court ordered adjournment of the Summons pending resolution of the application to the People’s Court in the Mainland to set aside or dismiss the Award, and security in the sum of HK $20 million to be provided to protect against any deterioration of the prospects of successfully enforcing the Award in Hong Kong as a result of the adjournment.
The High Court of the HKSAR has the jurisdiction to adjourn hearings relating to the enforcement of a Mainland award and order provision of security by the Respondent.
As to whether the Respondent should be ordered to provide security to satisfy the award, the court should consider two factors, first, the strength of the argument that the award was invalid. If the award was manifestly invalid, there should be an adjournment and no order for security; but if it was manifestly valid, there should either be an order for immediate enforcement or an order for substantial security. Second, the Court should consider the ease or difficulty of enforcement and the effect of any delay in enforcement, for example by the movement of assets or improvident trading.