HK decision reaffirms pro-enforcement approach to arbitral awards

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In Hong Kong, Article 34 of the UNCITRAL Model Law on International Commercial Arbitration provides the only redress available to a losing party in an international arbitration. In the latest development in the Grand Pacific case, which has been described as challenging Hong Kong’s reputation as an arbitration-friendly jurisdiction, leave to appeal to the Hong Kong Court of Final Appeal was refused, thereby affirming a Court of Appeal decision that overturned a first-instance judgment and reinstating the arbitral award (which the first-instance judgment had set aside).

The arbitral award was set aside due to complaints that one party benefited from a timetable extension and the submission of new legal authorities, while the other party did not. That party was also barred from further submissions in two instances.

The first-instance judgment had been criticised as unduly interfering with the arbitral tribunal’s case management powers. By narrowly construing the grounds for setting aside an arbitral award pursuant to Article 34, this decision has reaffirmed Hong Kong’s pro-enforcement approach to arbitral awards and arguably closed the floodgates on a potential surge in attempts to set aside arbitral awards. Given that a prospective Article 34 applicant now faces significant difficulties in order to set aside an arbitral award in Hong Kong, DLA Piper provides some practical guidance on the six grounds for setting aside an arbitral award as stipulated in Article 34 and on Article 34 itself…

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