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24 Jun 2021

Hong Kong - conditions precedent to arbitration - a question of jurisdiction or admissibility? (C v D)

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Arbitration analysis: It is not uncommon that commercial agreements contain conditions precedent to arbitration. In this case, the condition precedent in question was a requirement that the parties attempt to resolve the dispute by negotiation in good faith. If any dispute could not be resolved within 60 business days of the date of a party’s request in writing for negotiation, the parties were required to resolve the dispute through arbitration (the condition precedent). Letters were sent between the parties/their lawyers but did not result in any progress in resolving the dispute. The matter was finally adjudicated by an arbitral tribunal appointed under the Hong Kong International Arbitration Centre (HKIAC) Arbitration Rules (the tribunal) which granted an award in favour of the defendant (the award). The plaintiff sought to set aside the award on the basis that the tribunal had no jurisdiction as the defendant had failed to comply with the condition precedent. The defendant argued that the question of compliance with the condition precedent did not go to the jurisdiction of the tribunal, rather it went to whether the claim should be admitted by the tribunal. The Hong Kong court agreed and ruled that the question of compliance with the condition precedent was properly for the tribunal to answer.

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This analysis was first published on Lexis®PSL on 24 June 2021 and can be found here

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