Hong Kong / 09 October 2007 / Hong Kong, Court of Appeal, In the High Court of the Hong Kong Special Administrative Region / Karaha Bodas Company LLC v. Perushahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) / CACV 121/2003
| Country | Hong Kong |
| Court | Hong Kong, Court of Appeal, In the High Court of the Hong Kong Special Administrative Region |
| Date | 09 October 2007 |
| Parties | Karaha Bodas Company LLC v. Perushahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) |
| Case number | CACV 121/2003 |
| Applicable NYC Provisions | V | V(1) | V(2) | V(2)(b) |
| Source |
[2007] 4 HKLRD 1002 | 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 (“KBC”, a company incorporated in the Cayman Islands and operating out of the US) entered into two contracts with the defendant (“Pertamina”, a company incorporated in Indonesia), both of which provided for arbitration in Geneva, Switzerland. Another Indonesian state-owned company was party to the second contract and both contracts were governed by Indonesian law. A dispute arose between KBC and Pertamina, which KBC referred to arbitration. KBC obtained an award in its favour, which it sought to enforce in Hong Kong. Pertamina opposed the award’s enforcement under several grounds in Hong Kong’s Arbitration Ordinance 2000 (Cap. 341) (the “Ordinance”). Pertamina appealed, arguing (i) the arbitral tribunal’s refusal to grant it an adjournment and discovery rendered it unable to present its case, in violation of Section 44(2)(c) of Hong Kong's Arbitration Ordinance, Cap. 341 (which directly incorporated Article V(1)(b) NYC); (ii) the Tribunal's construction of the disputed contracts was so irrational that its decision exceeded the scope of the submission to arbitration, in violation of Section 44(2)(d) of the Ordinance (similarly incorporating Article V(1)(c) NYC); and (iii) enforcing the award would be contrary to public policy, in violation of Section 43 of the Ordinance (incorporating Article V(2)(b) NYC), because the award was obtained through fraud or bad faith. The Court of Appeal dismissed each of Pertamia’s grounds for appeal. First, it held that Pertamina had failed to establish a prima facie case of fraud or bad faith, that its case did not have a reasonable prospect of success, and that, in any case, Pertamina failed to exercise due diligence in obtaining the “newly discovered” documents upon which it based its argument, so they could not be introduced in the first instance on appeal. Second, it found that the arbitral tribunal sufficiently explained the basis of the award; therefore, the award was not arbitrary. Third, it found that the tribunal’s construction of the contract was rational and did not amount to a rewriting of the agreement, and chastised Pertamina for attempting to use this argument to engage the Court in an analysis of the merits of the decision. Finally, the Court rejected its argument that the Tribunal’s denial of discovery and adjournment deprived Pertamina of the ability to present its case, because the Tribunal was justified in denying the adjournment, and because Pertamina never requested discovery without an adjournment and so could not complain on appeal of the Tribunal’s failure to sever these issues and consider them separately. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
