Hong Kong / 06 March 2002 / Hong Kong, Court of First Instance, In the High Court of the Hong Kong Special Administrative Region / Shandong Textiles Import and Export Corporation v. Da Hua Non-Ferrous Metals Co Ltd / HCCT 80/1997
Country | Hong Kong |
Court | Hong Kong, Court of First Instance, In the High Court of the Hong Kong Special Administrative Region |
Date | 06 March 2002 |
Parties | Shandong Textiles Import and Export Corporation v. Da Hua Non-Ferrous Metals Co Ltd |
Case number | HCCT 80/1997 |
Applicable NYC Provisions | I | I(1) |
Source |
[2002] 2 HKLRD 844; [2002] 2 HKC 122; [2002] HKCU 252; 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 (“Shandong”) and the defendant (“Da Hua”) entered into a contract for the sale and delivery of raw cotton from Da Hua to Shandong, followed by a second, supplementary contract which provided for arbitration under the auspices of the China International Economic and Trade Arbitration Commission (“CIETAC”). Following a dispute, Shandong initiated an arbitration proceeding in China. An award was rendered in Shandong’s favour, which Shandong sought to enforce as a Convention award in Hong Kong in August 1997. A the ex parte stage before the High Court of Hong Kong, Yam J granted leave to enforce on the basis that the award was a Convention award. At the inter partes stage Da Hua resisted enforcement by pointing to the fact that, as of 1 July 1997, the People’s Republic of China had resumed sovereignty over Hong Kong. Therefore, according to Da Hua, the award rendered in Beijing could not be a “Convention award” and treating it as a Convention award, Da Hua advocated, would be contrary to public policy. Da Hua further argued that (i) the arbitration agreement was invalid under the law of the People’s Republic of China with the result that the award was unenforceable pursuant to Section 44(2)(b) of Hong Kong’s Arbitration Ordinance 2000 (Cap. 341) (the “Ordinance”) (incorporating in modified language Article V(1)(a) NYC); and that, (ii) Da Hua had not been able to present its case as provided by Section 44(2)(c) of the Ordinance (mirroring Article V(1)(b) NYC) because it had been disadvantaged by an expert report which it was not given the opportunity to examine before the hearing. Da Hua further contended that these shortfalls rendered the enforcement of the award contrary to public policy, pursuant to Section 44(3) (mirroring Article V(2) NYC). The Court of First Instance refused to grant a stay of the enforcement of the award, rejecting all of Da Hua’s arguments. Interpreting Article I(1) NYC, Ma J held that a “Convention award” is an award from a territory outside Hong Kong which is also a party to the NYC. Ma J found that the award could not be considered a “Convention award” because, at the time of application for enforcement, China had resumed sovereignty over Hong Kong. Consequently, leave for enforcement could not be granted on that basis. At the same time, Ma J rejected the argument that enforcement of the award as an award made outside Hong Kong would contradict Hong Kong’s constitutional law and – therefore – Hong Kong’s public policy. Further, the judge held that the agreement was valid as a matter of the law of the People’s Republic of China; even though the judge expressed doubts as to whether this was indeed the law applicable to the contract, he examined Da Hua’s arguments by applying Chinese law as the parties had – in their submissions – agreed that Chinese law governed. Finally, Ma J considered that Da Hua had been given access to the expert report and, in any event, it had not suffered any injustice or inequality, nor had it complained of any injustice or inequality to the tribunal due to the submission of that report. |
Attachment (1)
Original Language Adobe Acrobat PDF |