Hong Kong Courts: Pro-Arbitration In Principle And In Practice – Nick Gall And Ashima Sood Contribute The Hong Kong Chapter Of The Dispute Resolution Global Guide 2019 Published By Practical Law

Author:Mr Nick Gall and Ashima Sood

This article considers the pro-arbitration approach of courts in Hong Kong in the context of two recent cases. It also considers other significant initiatives and developments in the arbitration regime concerning third party funding, consolidation, and costs of arbitrations.

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It is widely recognised that the pro-arbitration and pro-enforcement approach of Hong Kong courts is the key attribute that underpins Hong Kong's position as an attractive venue for commercial dispute resolution.

Due to the rapid economic growth in the markets and a surge in cross-border transactions, arbitration users across the globe are demanding a robust regulatory framework and a judicial climate that is pro-arbitration and pro-enforcement. Hong Kong has been successful in recognising these demands both in principle and in practice.

This article considers:

The pro-arbitration approach of courts in Hong Kong in the context of a recent judgment in Arjowiggins. Other important developments in the arbitration regime in Hong Kong. The Arjowiggins case

Arjowiggins HKK2 Ltd v Shandong Chenming Paper Holdings Ltd [HCCT 53/2015] was decided by the Honourable Madam Justice Mimmie Chan on 19 January 2018

In this case, the Court of First Instance granted an anti-suit injunction restraining an award debtor from commencing parallel proceedings against the award creditor and its agent in mainland China.

Background. Arjowiggins HKK2 Ltd (claimant) and Shandong Chenming Paper Holdings Ltd (respondent) entered into a joint venture contract on 27 October 2005 (JV contract), pursuant to which a joint venture company was established in mainland China for the purpose of manufacturing paper products (JV company). The governing law of the JV Contract was PRC law. The dispute resolution clause provided for arbitration in Hong Kong in accordance with the Hong Kong International Arbitration Centre (HKIAC) Rules.

Disputes arose subsequently between the claimant and the respondent and various proceedings ensued in the mainland as a result, including proceedings for the dissolution of the JV company which was eventually ordered to be dissolved.

The Award. In October 2012, the claimant commenced an arbitration in Hong Kong under the JV contract claiming that the respondent was in breach of the provisions of the JV contract, including, among others, by seeking the dissolution of the JV company without the necessary unanimous vote of all the directors of the JV company. The respondent counterclaimed for damages from the claimant alleging breach of the JV contract and breach of PRC law.

On 20 November 2015, an award was made in favour...

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