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22 Jan 2024

Arbitration – Illegality as a Defence – Public Policy – Article 34 of the UNCITRAL Model G v N [2023] HKCFI 3366

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The Hong Kong Court of First Instance ("HKCFI") stayed an application to set aside the enforcement of an arbitration award and remitted the matter to the arbitrator under Article 34(4) of the UNCITRAL Model Law (as enacted by section 81 of the Hong Kong Arbitration Ordinance, Cap. 609 ("AO")), to give the arbitrator an opportunity to resume the arbitral proceedings and reconsider questions of illegality under Hong Kong law.

Under the AO no appeal of decisions of fact or law made by an arbitrator is permitted (unless Schedule 2 applies). G sought to have the enforcement of the award set aside as the law relating to public policy in Hong Kong changed a few days before the Award was handed down. Although it was contended by N that this set aside application was a thinly veiled appeal, the judge held that the court was entitled to review the Award, not because of any error in fact or law, but the supervisory court had a duty to consider whether the enforcement of the Award was contrary to public policy. In doing so the court is bound to consider public policy as recognized at the date of review. The court may be compelled to set aside an award if the court considers that it would be manifestly unjust and against the public policy of Hong Kong to enforce the Award, whether by reason of disproportionality or the weighing up of different public policies or interests involved.

This article was first published by LexisNexis on 16 January 2024.

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