Hong Kong, Court of Appeal, on Appeal from the High Court
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Hong Kong / 22 May 1997 / Hong Kong, Court of Appeal, on Appeal from the High Court / Logy Enterprises Ltd. v. Haikou City Bonded Area Wansen Products Trading Co. / 1997, No. 65 (Civil)
Country Hong Kong Court Hong Kong, Court of Appeal, on Appeal from the High Court Date 22 May 1997 Parties Logy Enterprises Ltd. v. Haikou City Bonded Area Wansen Products Trading Co. Case number 1997, No. 65 (Civil) Source http://www.judiciary.gov.hk (website of the Judiciary of the Hong Kong Special Administrative Region of the People’s Republic of China)
Languages English Summary The appellant (“Logy”) and the respondent (“Haikou”) entered into a contract for the sale and shipment of steel wire rods, which provided for arbitration under the auspices of the China International Economic and Trade Arbitration Commission (“CIETAC”). A dispute arose as to the non-delivery of some of the rods, and Haikou initiated an arbitral proceeding. Due to the inability of Haikou’s arbitrator of choice to serve in the tribunal, the CIETAC – under Haikou’s instructions – appointed one of the three arbitrators. This arbitrator was a high-ranking official of the Import and Export Commodity Inspection Bureau (the “Bureau”). An award was rendered in favour of Haikou, which Haikou sought to enforce in Hong Kong. Logy resisted the award’s enforcement. According to Logy, a material fact of the dispute before the tribunal was that Haikou had alleged the existence of a certificate issued by the Bureau, which Logy alleged had been forged. Logy contended that as one of the arbitrators was a high-ranking official of the Bureau, he would be unlikely to rule that such a certificate did not exist, as this would have put the Bureau into disrepute. The consequence was, according to Logy, that the arbitrator was biased and that, pursuant to Section 44(3) of Hong Kong’s Arbitration Ordinance 2000 (Cap. 341) (the “Ordinance”) (mirroring Article V(2) NYC), enforcing the award would be contrary to the public policy of Hong Kong. Logy also relied on Section 44(2)(e) of the Ordinance (mirroring Article V(1)(d) NYC), arguing that the composition of the tribunal had not been in accordance with the law of the country where the arbitration took place, i.e. China. Haikou was successful before the High Court of Hong Kong in seeking an order to enforce the award; Logy appealed that decision to the Court of Appeal. The Court of Appeal upheld the High Court’s decision, refusing to stay the enforcement of the award, as it held that there had been no bias or risk of bias on the part of the arbitrator. In its decision, the Court of Appeal considered that it was not for an enforcing court to “form any concluded view as to whether the tribunal should have been more rational or what telling mistakes, if any, the arbitrators could have but had not avoided”. Further, the Court of Appeal considered that it would be rare for a court to infer bias from errors or irrational conduct of the arbitrators which a court could not look into itself. Bokhary JA placed particular emphasis on the point that the burden of proof for showing bias laid with the party seeking a stay of enforcement, this case, Logy. Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=694&opac_view=6 Attachment (1)
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Country Hong Kong Court Hong Kong, Court of Appeal, on Appeal from the High Court Date 18 January 1991 Parties Tiong Huat Rubber Factory (Sdn) Bhd v. Wah-Chang International (China) Company Ltd and Wah-Chang International (Hong Kong) Corporation Ltd Case number Civil appeal No. 192 of 1990 Source [1991] 1 HKC 28 | http://www.judiciary.gov.hk (website of the Judiciary of the Hong Kong Special Administrative Region of the People’s Republic of China)
Languages English Summary The plaintiff (“Tiong Huat”, a company incorporated in Malaysia) and the first defendant (“Wah-Chang China”, a company incorporated in Hong Kong) entered into three contracts for the sale ammonia latex by Tiong Huatt to Wah-Chang China. One of the contracts contained a clause providing that “all disputes as to quality or condition of rubber […] shall be settled by Arbitration.” Separately to those three contracts, Tiong Huat entered into two contracts with the second defendant (“Wah-Chang Hong Kong”, a company incorporated in Hong Kong). Tiong Huat initiated arbitration proceedings against both defendants, alleging that they had failed to open the letters of credit necessary for payment under the contracts. Neither defendant participated in the arbitral proceeding. A number of awards were rendered in Malaysia, all in favour of Tiong Huat, which it sought to enforce in Hong Kong. The defendants resisted enforcement, arguing that the arbitration clause was inapplicable as it only applied to disputes concerning the “quality or condition of rubber”, whereas the present dispute, the defendants contended, was a dispute regarding payment and thus should not have been referred to arbitration. The High Court decided in favour of Tiong Huat, holding that the dispute concerning payment fell within the scope of the arbitration clause. Wah-Chang appealed that decision to the Court of Appeal. The Court of Appeal allowed Wah-Chang’s appeal, reversing the High Court’s decision and holding that the dispute concerning payment did not fall within the scope of the arbitration clause. According to the Court, the parties were entitled to restrict arbitration to certain issues, and the express language of the agreements did not contemplate arbitration concerning payment. As such, the arbitration awards were not enforceable. reverses : Link to the record https://newyorkconvention1958.org/index.php?lvl=notice_display&id=499&opac_view=6 Attachment (1)
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