(Hong Kong) The plaintiff sought to enforce a Chinese arbitration award. The other party said it had not been allowed to present its case and resisted enforcement.
Held: The defence succeeded. The court was still asked to to enforce it under its discretion. Kaplan J discussed an instance when it might be exercised in order to enforce an award: ‘He relied strongly upon the fact that the defendants had taken no steps to set aside the award in China and that this failure to so act was a factor upon which I could rely. I disagree. There is nothing in s.44 nor in the New York Convention which specifies that a defendant is obliged to apply to set aside an award in the country where it was made as a condition of opposing enforcement elsewhere . . It is clear to me that a party faced with a Convention award against him has two options. Firstly, he can apply to the courts of the country where the award was made to seek the setting aside of the award. If the award is set aside then this becomes a ground in itself for opposing enforcement under the Convention . . Secondly, the unsuccessful party can decide to take no steps to set aside the award but wait until enforcement is sought and attempt to establish a Convention ground of opposition.
That such a choice exists is made clear by Redfern and Hunter in International Commercial Arbitration p.474 where they state: ‘He may decide to take the initiative and challenge the award; or he may do nothing and resist any attempts by his adversary to obtain recognition and enforcement of the award. The choice is a clear one – to act or not to act.’ . . I therefore conclude that the defendant’s failure to apply to set aside the award is not a factor upon which I should or could rely in relation to the exercise of my discretion . . In relation to the ground relied on in this case I could envisage circumstances where the court might exercise its discretion, having found the ground established, if the court were to conclude, having seen the new material which the defendant wished to put forward, that it would not affect the outcome of the dispute. This view is supported by Professor Albert Van den Berg in his book, the New York Convention of 1958, at p.302, where he states: ‘Thus only if it is beyond any doubt that the decision could have been the same would a court be allowed to override the serious violation.’
It is not necessary for me in this judgment to decide whether this is the only circumstance where the discretion could be exercised or to lay down circumstances where it would be appropriate for the court to exercise its discretion after finding a serious due process violation.’
Judges:
Kaplan J
Citations:
[1993] HKLR 39
Jurisdiction:
England and Wales
Cited by:
Cited – Dallah Estates and Tourism Holding Company v Ministry of Religious Affairs, Government Of Pakistan CA 20-Jul-2009
The claimant sought to enforce an international arbitration award against the defendant in respect of the provision of accommodation for Hajj pilgrims. A without notice order had been made to allow its enforcement, but that had been set aside.
Lists of cited by and citing cases may be incomplete.
International, Arbitration
Updated: 07 May 2022; Ref: scu.373982