Hong Kong / 02 December 2011 / Hong Kong, Court of Appeal, In the High Court of the Hong Kong Special Administrative Region / Gao Haiyan and Xie Heping v. Keeneye Holdings Limited and New Purple Golden Resources Development Limited / CACV 79/2011
| Country | Hong Kong |
| Court | Hong Kong, Court of Appeal, In the High Court of the Hong Kong Special Administrative Region |
| Date | 02 December 2011 |
| Parties | Gao Haiyan and Xie Heping v. Keeneye Holdings Limited and New Purple Golden Resources Development Limited |
| Case number | CACV 79/2011 |
| Applicable NYC Provisions | V | V(2) |
| Source |
[2012] 1 HKLRD 627 | 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 applicants (Gao Haiyan and Xie Heping, two nationals of China) entered into a share transfer agreement with Keeneye Holdings Ltd (“Keeneye”, a company incorporated in Hong Kong), which provided for arbitration in China. A dispute arose between the parties and the applicants initiated an arbitration proceeding in China, which culminated to an award in their favour. The respondents sought to have the award set aside by the Xian Intermediate People’s Court of Shaanxi, contending that the award was procured through actual or apparent bias: they pointed to a dinner meeting of one of the arbitrators and a person related to the respondents. According to the respondents, the person related to them was told to pay the arbitrator in order to secure a favourable result. The Xian Intermediate People’s Court of Shaanxi rejected the respondents’ application, finding that there was insufficient evidence to show that the award had been manipulated. The applicants sought to enforce the award in Hong Kong and the respondents, relying on Section 40E(3) of Hong Kong’s Arbitration Ordinance of 2000 (Cap. 341) (the “Ordinance”) (mirroring Article V(2) NYC), argued that the enforcement of the award would be contrary to the public policy of Hong Kong. The Court of First Instance found in the respondents’ favour, granting a stay of the award’s enforcement. The applicants appealed the Court’s decision to the Court of Appeal. The Court of Appeal allowed the appeal, reversing the decision of the Court of First Instance and granting the enforcement of the award on the basis that the notion of public policy depended on whether the conduct complained of would have been frowned upon in the place where it occurred. The Court considered that the term “public policy” in Article V(2)(b) NYC concerns the “fundamental conceptions of morality and justice of Hong Kong”. In considering whether the dinner meeting was contrary to such fundamental conceptions, the Court of Appeal held that regard must be had to whether the conduct complained of is a matter of common practice in the place where it occurred, in this case, at the seat of the arbitration. The Court held that if such conduct was not uncommon, an enforcing court in Hong Kong would not necessarily find it contrary to its public policy, even though the Court considered that such conduct would be uncommon in Hong Kong. |
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