Hong Kong CFA Clarifies Principles For Out Of Time Resistance Of New York Convention Award

Baker McKenzie analyse the April 2018 decision from the Hong Kong Court of Final Appeal in Astro v First Media [2018] HKCFA 12, where the CFA allowed First Media to resist enforcement of awards under the New York Convention out of time. The CFA’s decision is important because it clarifies the applicable principles when considering whether time should be extended where an award debtor seeks to resist enforcement after the prescribed time limit has expired.

The authors observe the following takeaways from the CFA’s decision:

Both the CA and CFA have confirmed that Hong Kong adheres to the choice of remedies principle. Accordingly, where a respondent reserves its right before a tribunal to challenge its jurisdiction, the respondent has a choice of raising lack of jurisdiction again either by challenging an award before the supervisory court at the seat or by resisting enforcement of the award.

Claimants should be mindful that where respondent has unsuccessfully raised a jurisdictional challenge during the arbitration and reserved its rights, respondent may raise that challenge again when resisting enforcement of an award.

If enforcement has been granted and an award debtor subsequently seeks to resist enforcement out of time, Hong Kong courts will consider all relevant circumstances and the overall justice of the case in deciding whether to extend time. The courts will in particular give appropriate weight to the merits of a debtor’s challenge.

The absence of a valid arbitration agreement is a very strong ground for resisting enforcement of an award in Hong Kong. It will only be in the most exceptional circumstances that Hong Kong courts will exercise their residual discretion and refuse to set aside an enforcement order notwithstanding that an award debtor has proven that there is no valid arbitration agreement. Such exceptional circumstances may be held to exist where the award debtor is found guilty of very substantial delay and to have acted unreasonably in failing to act sooner, and the setting aside of an enforcement order would cause substantial prejudice to the award creditor that cannot be compensated.

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About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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