Hong Kong Court Refuses Set Aside, Rejects Public Policy Challenge

Hong Kong Court Refuses Set Aside, Rejects Public Policy Challenge1

Herbert Smith Freehills review the 2018 decision of the Hong Kong High Court in Paloma Co. Ltd. v. Capxon Electronic Industrial Co. Ltd [[2018] HKCFI 1147], where the Court rejected a public policy challenge to a New York Convention Award rendered by a tribunal in Japan. The Respondent applied to set aside leave to enforce the Award, alleging that the tribunal’s conduct was biased, and violated basic concepts of morality, justice and public policy.

The authors observe that the Court’s rejection of the public policy argument is a reminder that egregious conditions must exist for such a challenge to succeed, and the dismissal of the setting aside application is the latest in a long line, each reiterating Hong Kong’s continuing commitment to the New York Convention. Further, it is a reminder that public interest and public policy may still have a role to play in insolvency situations and the court may not permit arbitration awards to trump third party creditors’ rights in these circumstances.

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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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