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05 Jun 2024

CA decisions: Guy Lam principles apply to arbitration clauses

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The Court of Final Appeal's decision in Re Guy Kwok-Hung Lam here1 held that in an ordinary case where the underlying dispute of the debt was subject to an exclusive jurisdiction clause, the court should dismiss the petition unless there were countervailing factors such as the risk of the debtor’s insolvency impacting third parties, the debtor’s reliance on a frivolous defence, or an occurrence of an abuse of process.

There have been different approaches as to the applicability of the Guy Lam principles on arbitration clauses. In two recent judgments, the Court of Appeal has confirmed that the Guy Lam principles apply equally to arbitration clauses.

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1 [2023] HKCFA 9 (date of decision: 4 May 2023)

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