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In the 2015 case of KB v S, Hong Kong strengthened its reputation as a pro-arbitration judiciary, by setting out ten principles underpinning the enforcement of arbitral awards.
The Hong Kong courts are known for their pro-arbitration approach. In the 2015 case KB v S and Others  HKCFI 1787, Chan J laid down ten principles summarizing the Hong Kong judiciary’s attitude to the enforcement of arbitration agreements and awards. We expect this case – and these principles – to be much cited in the future, particularly as these same principles will apply in applications to set aside arbitral awards (cf China Solar Power (Holdings) Ltd v ULVAC Inc  HKEC 2559).
1 ‘The primary aim of the court is to facilitate the arbitral process and to assist with enforcement of arbitral awards.’
2 ‘Under the Arbitration Ordinance, the court should interfere in the arbitration of the dispute only as expressly provided for in the Ordinance’.
3 ‘The parties to a dispute should be free to agree on how their dispute should be resolved’ although this freedom should be subject to ‘safeguards that are necessary in the public interest’.
4 The ‘[e]nforcement of arbitral awards should be “almost a matter of administrative procedure” and the courts should be “as mechanistic as possible”’.
(cf the 2011 PetroChina decision  4 HKLRD 604 and the approach taken by the Hong Kong Court of Appeal)
5 ‘The party opposing enforcement has to show a real risk of prejudice and that its rights are shown to have been violated in a material way’.
(cf the 2012 Grand Pacific Court of Appeal decision  4 HKLRD 1 (CA); in Grand Pacific, the Court of Appeal reinstated an arbitral award that had previously been set aside on the basis of perceived procedural impropriety, on the grounds that the alleged violations were not sufficiently important to justify such steps)
6 ‘The court is concerned with the structural integrity of the arbitration proceedings’ and so ‘the conduct complained of ‘must be serious, even egregious’, before the court would find that there was an error sufficiently serious so as to have undermined due process’.
(cf the 2012 Grand Pacific Court of Appeal decision)
7 ‘In considering whether or not to refuse the enforcement of the award, the court does not look into the merits or at the underlying transaction.’
8 ‘Failure to make prompt objection to the Tribunal or the supervisory court may constitute estoppel or want of bona fide’.
(cf the 1999 Hebei Import decision (1999) 2 HKCFAR 111, in which the Court of Final Appeal upheld enforcement of an award, finding that a party who wishes to rely on noncompliance with procedural rules should do so promptly and not proceed with the arbitration regardless, ‘keeping the point up his sleeve for later use’)
9 ‘Even if sufficient grounds are made out either to refuse enforcement or to set aside an arbitral award, the court has a residual discretion and may nevertheless enforce the award despite the proven existence of a valid ground.’
(cf the 1999 Hebei Import decision)
10 The parties to the arbitration have a duty of good faith. (cf the 1999 Hebei Import decision)
James Rogers is a partner in our London office and Matthew Townsend is an associate in our Hong Kong office.
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