In the second recent Hong Kong decision on this topic, Lam J partially set aside an award rendered by a distinguished tribunal sitting in an international arbitration in Hong Kong.
The Respondents in the arbitration challenged the award pursuant to Article 34(2) of the UNCITRAL Model Law on several different grounds (including, for example, that the tribunal allocated the time available at the oral hearing unequally between the parties and that this represented a breach of the arbitration procedure and of the rule of equal treatment).
Lam J dismissed the majority of the Respondents' arguments (and ordered them to pay the Claimant's costs of the application on the standard basis). He upheld, however, the Respondents' complaint that the tribunal had applied PRC law to certain aspects of the claim on the basis of its own "secret view" of PRC law, without giving the parties an opportunity to address the principles of PRC law on which the Award was based. He held that this gave the Respondents grounds to challenge the relevant parts of the Award pursuant to Article 34(2)(a)(ii) of the UNCITRAL Model Law because they were therefore unable to present their case.
He then held that the Court has a residual discretion to decline to set aside an award pursuant to Article 34 even if one of the grounds set out in Article 34 exists. Having referred to various Hong Kong authorities on the exercise of the Court's discretion in the context of the enforcement of awards pursuant to the New York Convention, he held that the Court may decline to set aside an award if it is satisfied that the tribunal would not have reached a different conclusion but for the matter complained of. On this basis, he set aside one aspect of the award impacted by the tribunal's application of the principles of PRC law in question, but declined to interfere with another element of the award, where he held that the tribunal's infraction had no real impact on the result.
(Brunswick Bowling & Billiards Corp v. Shanghai Zhonglu Industrial Co Ltd  HKEC 233)