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Hong Kong – Landmark Appeal Confirms City’s Status as Key Arbitral Venue.

10 May, 2012

 

 

Herbert Smith's Hong Kong arbitration practice has secured an important victory in a landmark appeal against the setting aside of an arbitral award in Pacific China Holdings Ltd. v Grand Pacific Holdings Ltd. 
 
The judgment, handed down yesterday afternoon in the Hong Kong Court of Appeal by a panel of judges comprising Mr Justice Tang VP, Madam Justice Kwan JA and Mr Justice Fok JA, is a highly significant decision, which once again confirms Hong Kong as a leading venue for commercial arbitration. 
 
The Court of Appeal unanimously upheld the appeal by Herbert Smith's client, Grand Pacific Holdings Ltd., against the setting aside of an arbitral award in its favour by the Hong Kong Court of First Instance
 
Grand Pacific Holdings Ltd.'s opponent, Pacific China Holdings Ltd, had argued that it was denied an opportunity to present its case before the arbitral tribunal, and that there were irregularities in the arbitral procedure, and that these amounted to violations of the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Arbitration. Like many jurisdictions worldwide, Hong Kong adopts the UNCITRAL Model Law as part of its national arbitration legislation, via the Arbitration Ordinance (Cap. 609).
 
The Court of Appeal found that there had been no violations of the Model Law, and reinstated the arbitral award. The justices emphasised that Hong Kong courts will not readily interfere with the decisions of arbitral tribunals sitting in Hong Kong, confirming the city's status as an arbitration-friendly jurisdiction in which commercial parties can be assured of minimal court intervention in the arbitral process. 
 
Hong Kong is a popular venue for arbitrating disputes among both local and international parties, including those doing business in Mainland China.
 
Justin D'Agostino, head of Herbert Smith's Greater China arbitration practice and lead adviser to Grand Pacific Holdings on the appeal, commented:
 
"This is a well-reasoned judgment that underlines Hong Kong's status as an arbitration-friendly jurisdiction and illustrates the principle that arbitral awards should be set aside in only the rarest of circumstances where the tribunal's conduct has been egregious.  The strong indication that the Hong Kong courts will not review procedural decisions made by the tribunal is also a welcome sign of our judiciary's strong support for arbitration, and should be well received by both the legal community and commercial parties who choose to arbitrate their disputes in Hong Kong."  
 
Other members of the Herbert Smith team included associates Shaun Langhorne, Martin Wallace and Yi-Shun Teoh.  The team was instructed by Jennifer Lin and Randy Tsai of Tsar & Tsai in Taipei.  Ms Teresa Cheng SC and Mr Adrian Lai acted as counsel for Grand Pacific Holdings Ltd. in the Court of Appeal.
 
For further information, please contact:
 
Gemma Saunders, Herbert Smith
 
 
 

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