Hong Kong CA Revisits Model Law Setting Aside Provisions

Phillip Rompotis reviews the Hong Kong Court of Appeal’s decision in Tronic International v Topco Scientific [2016] HKCA 371, where the CA dealt with Article 34(2)(a)(ii) of the UNCITRAL Model Law (the “unable to present his case” ground) and Article 34(2)(a)(iii) (the “decided matters beyond the scope of the submission to arbitration” ground) of the UNCITRAL Model Law. Both arguments failed.

In relation to Article 34(2)(a)(ii), the CA held that to justify setting aside an arbitral award on this ground, a party must have been denied due process in a respect that is serious, or even egregious and that the nature of the deprivation that is required includes situations where the tribunal carries out its own investigations or inquiries as to primary facts, or decides a case on the basis of a new point (whether or law or fact) without giving the parties an opportunity to consider and respond to it. The CA considered that both of these are situations in which a party is, in effect, not given a hearing on matters that are critical to the tribunal’s decision, with the ultimate question being one of the fairness of the arbitral process.

In relation to Article 34(2)(a)(iii), the CA conceded that one of the issues raised (relating to the Sale of Goods Ordinance) had not in fact been raised in the Terms of Reference, but the argument nonetheless failed, with the CA noting that Article 19 of the ICC Rules clearly enables the scope of an arbitration to be expanded beyond the original Terms of Reference where the tribunal authorises the new claim to be made. Further, for the purposes of Article 19 of the ICC Rules, where the tribunal raises a matter or issue of its own motion, and makes it clear to the parties that it will deal with it after having heard submissions in relation to the matter or issue, and the parties make such submissions (as they did here), the party relying on the issue raised by the tribunal can properly be said to be making a claim based on that issue, and (if allowed by the tribunal to do so) to have been authorised by the tribunal to make it.


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 Hong Kong 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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