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What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
Section 64 of the Arbitration Ordinance (Cap 609) provides that in arbitration proceedings with more than one arbitrator, any decision of the tribunal must be made, unless otherwise agreed by the parties, by a majority of all its members.
Under Section 67 the award must be in writing and signed by the majority of the arbitrators, state the reasons on which it is based (unless the parties have agree that no reasons are to be given), and the date and the place of arbitration.
The award need not be reviewed by any other body. Unless otherwise agreed by the parties, an award made by a tribunal under an arbitration agreement is final and binding on the parties and any person claiming through or under any of the parties (Section 73).
Timeframe for delivery
Are there any time limits on delivery of the award?
Unless otherwise agreed by the parties, the tribunal is not subject to a time limit for delivery of the award. If the arbitration agreement imposes a time limit to render an award, Section 72 of the Arbitration Ordinance (Cap 609) provides that the court may extend that time limit, regardless of whether it has expired.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
Section 70 of the Arbitration Ordinance (Cap 609) provides that unless otherwise agreed by the parties, the tribunal may award any remedy or relief that could have been ordered by the court if the dispute had been the subject of civil proceedings in court, including the ability to order specific performance of any contract. However, the tribunal cannot order specific performance of a contract relating to land or any interest in land (Section 70(2)).
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Under Section 35 of the Arbitration Ordinance (Cap 609), the tribunal has the power, at the request of a party, to order interim measures. Such measures can include ordering a party to:
- maintain or restore the status quo pending determination of the dispute;
- take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself;
- provide a means of preserving assets from which a subsequent award may be satisfied; or
- preserve evidence that may be relevant and material to the resolution of the dispute.
Section 45(2) of the ordinance provides that on the application of any party, the court may, in relation to any arbitration proceedings which have been or are to be commenced in or outside Hong Kong, grant interim measures, including injunctions.
The court may grant interim measures irrespective of whether the tribunal may exercise similar powers under Section 35 (Section 45(3)), although it may decline to do so if the interim measure sought is currently the subject of arbitral proceedings and the court considers it more appropriate for the tribunal to deal with it (Section 45(4)). Where the tribunal has not yet been constituted, it is more likely that the court will grant interim measures.
Can interest be awarded?
Section 79 of the Arbitration Ordinance (Cap 609) provides that unless otherwise agreed by the parties, the tribunal may award simple or compound interest from the dates and at the rates it considers appropriate.
Interest is payable on money awarded by the tribunal from the date of the award, unless otherwise provided by the tribunal. Interest is payable on costs from the date of the costs award, unless otherwise provided by the tribunal.
At what rate?
Under Section 80 of the Arbitration Ordinance (Cap 609), except where the award provides otherwise, interest is payable at the judgment rate (8% at the time of writing). The judgment rate is determined in accordance with Section 49(1)(b) of the High Court Ordinance (Cap 4).
Is the award final and binding?
Unless otherwise agreed by the parties, an award made by a tribunal pursuant to an arbitration agreement is final and binding both on the parties and on any person claiming through or under any of the parties (Section 73 of the Arbitration Ordinance (Cap 609)).
What if there are any mistakes?
Section 69 of the Arbitration Ordinance (Cap 609) provides that within 30 days of receipt of the award, unless another period of time has been agreed on by the parties, a party, with notice to the other party, may request the tribunal to:
- correct any computational, clerical or typographical errors or any errors of similar nature in the award;
- give an interpretation of a specific point or part of the award; or
- make an additional award as to claims presented in the arbitration proceedings but omitted from the award.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
The parties cannot agree to exclude or limit a party's right under the Arbitration Ordinance (Cap 609) to appeal or challenge an award.
What is the procedure for challenging awards?
An application to the courts under Section 81 of the Arbitration Ordinance (Cap 609) must be made within three months of the date on which the party making the application received the award (Section 81(3) of the ordinance). The application is made by originating summons under Order 73, Rule 1 of the Rules of the High Court (Cap 4A).
On what grounds can parties appeal an award?
An award cannot be appealed. The only means of recourse against a Hong Kong arbitral award is by applying to the High Court for an order setting aside the award under one of the limited grounds set out in Section 81 of the Arbitration Ordinance (Cap 609). Under Section 81, an award may be challenged and set aside where the party making the challenge can prove that:
- a party to the arbitration was under some incapacity;
- the arbitration agreement is invalid under the law to which the parties subjected it or, failing any indication in the agreement as to which law the agreement is subject to, under Hong Kong law;
- the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitration, or was otherwise unable to present its case;
- the award deals with a dispute not contemplated by the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration; or
- the composition of the tribunal or the arbitration proceedings was not in accordance with the agreement of the parties, unless such agreement conflicted with a mandatory provision of the ordinance.
An award may also be set aside where the court finds that:
- the subject matter of the dispute is not capable of settlement by arbitration under Hong Kong law; or
- the award conflicts with Hong Kong’s public policy.
What steps can be taken to enforce the award if there is a failure to comply?
Where an unsuccessful party fails or refuses to comply with an arbitral award, the successful party may seek to enforce the award through the courts. The successful party may apply to court for leave to enforce the award and to enter judgment in the same terms as the award under Section 84(2) of the Arbitration Ordinance (Cap 609). Once judgment has been obtained, the successful party may pursue the same enforcement measures as for any court judgment, including execution against goods belonging to the judgment debtor, a garnishee order or a charging order.
Can awards be enforced in local courts?
Yes. Section 84 of the Arbitration Ordinance (Cap 609) provides that an award issued in relation to arbitration proceedings by a tribunal is enforceable in the same way as a judgment of the court, but only with the leave of the court.
Enforcement procedures under the ordinance depend on whether the award is:
- a local Hong Kong award;
- an award made in mainland China;
- an award made in a country which is a signatory to the New York Convention;
- an award made in Macau; or
- an award made in some other country.
Under Section 85 of the ordinance, the party seeking to enforce an arbitral award which is not a convention award, a mainland Chinese or a Macau award must produce the original or a certified copy of the award, the original or a certified copy of the arbitration agreement and, if relevant, any necessary translations.
Under Sections 86, 89, 95 and 98D of the ordinance, the courts may refuse to enforce an award for similar reasons as are set out in Article 34 of the UNCITRAL Model Law (enshrined in Section 81) for the setting aside of an award.
Schedule 2 to the ordinance contains additional provisions on challenging arbitral awards, which will apply if the parties have opted in.
How enforceable is the award internationally?
Hong Kong is a signatory to the New York Convention by virtue of China’s accession to the convention. The Hong Kong courts will normally enforce foreign awards from New York Convention states and territories, except in the limited circumstances set out in Section 89 of the Arbitration Ordinance (Cap 609), and other jurisdictions which are signatories to the New York Convention should adopt a similar approach. As for the non-New York Convention countries, the extent to which a Hong Kong arbitral award is enforceable will depend on those countries' domestic laws.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Foreign states enjoy absolute immunity from enforcement in Hong Kong. An arbitral award against a foreign state cannot be enforced in Hong Kong unless the foreign state agrees to waive immunity.
The Chinese government is not a foreign state in Hong Kong, since Hong Kong is part of China. However, the High Court has held that the Central People's Government enjoys crown immunity in Hong Kong, the practical effect of which is the same – immunity from enforcement. Certain state-owned bodies, if controlled to a sufficient degree by the state, may also enjoy immunity. The determining factor is ultimately the degree of control that the state has over the defendant. Most state-owned enterprises are unlikely to be able to claim immunity, especially if their operations are managed separately from the state. Like sovereign immunity, crown immunity can be waived.
Are there any other bases on which an award may be challenged, and if so, by what?
The grounds for refusing to enforce an award in Hong Kong under Section 86 of the Arbitration Ordinance (Cap 609) largely mirror those set out in the New York Convention. However, Section 86(2) also gives the court discretion to refuse to enforce an award where "for any other reason the court considers it just to do so".
How enforceable are foreign arbitral awards in your jurisdiction?
The Hong Kong courts adopt a positive approach to the enforcement of foreign arbitral awards. New York Convention awards may be enforced with leave of the court, and leave has been refused only on rare occasions.
Arbitration awards made by non-New York Convention states and territories are still enforceable in Hong Kong, at the discretion of the Hong Kong courts (Section 84 of the ordinance).
Mainland Chinese arbitral awards will normally be enforced, unless the grounds for refusal under Section 95 (which largely replicate those set out in the New York Convention) are established. Reciprocal enforcement of arbitration awards with mainland China is governed by the Arrangement Concerning Mutual Enforcements of Arbitral Awards between the mainland and the Hong Kong Special Administrative Region, which came into force in 1999.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
This will depend on the merits of the case. The courts have the discretion to enforce an award that has been set aside by the courts in the seat of arbitration.
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