Facts

The underlying dispute arose from M&A transaction agreements (Agreements) between the plaintiff and the defendants. The plaintiff commenced HKIAC arbitration claiming substantial holdback amounts under the Agreements. In response, the defendants applied for the plaintiff’s claims to be dismissed in their entirety under the EDP mechanism in Article 43 of the 2018 HKIAC Administered Arbitration Rules (Rules), a procedure in substance akin to summary judgment in court proceedings.

The tribunal allowed the EDP to proceed, and by a partial award dismissed the plaintiff’s claims entirely. A subsequent costs award was also issued against the plaintiff. The plaintiff applied to the court to set aside both awards, raising multiple grounds primarily targeting the tribunal’s handling of the EDP.

The plaintiff’s key EDP-related grounds were: (1) the defendants failed to precisely identify the “points of law or fact” as required by Article 43 (Article 43 Complaint); (2) the plaintiff was denied a fair opportunity to present its case in relation to the EDP application (EDP Due Process Complaint); (3) the tribunal exceeded its jurisdiction by making factual findings in the EDP application beyond the scope of submission (Excess of Submission Complaint); and (4) the partial award was manifestly incoherent and/or infra petita, conflicting with public policy (Public Policy Ground). The plaintiff also challenged the costs award on due process grounds.

Decision

Article 43 Complaint – No breach in identifying points of law or fact

• The court found no breach of Article 43 regarding identification of the points of law or fact. Specifically, the court held that Article 43 does not specify the level of precision required. How concisely the points must be stated depends on the individual case, and the degree of precision is a matter of case management within the tribunal’s discretion. On the facts, the court found that the defendants had already set out the points of law or fact through the headings and structure of their statement of defence. The plaintiff was clearly aware of these points and made comprehensive submissions in response.
• As to the plaintiff’s complaints that the defendants failed to propose a form of EDP procedure and to comment on how it met the objectives in Articles 13.1 and 13.5 of the Rules (in contravention of Article 43.4(d)), the court found these to be at most minor and technical breaches. The tribunal had already directed the procedure through its own procedural orders (conducting the screening stage by way of written and oral submissions, conducting the determination stage by way of final written submissions, and staying the arbitration pending determination) and was plainly satisfied the fairness objectives were met. In any event, the court also found that the plaintiff had waived any technical breaches by fully participating in the EDP process without contemporaneous complaint.

EDP Due Process Complaint and Excess of Submission Complaint

• The court held that the plaintiff had full opportunity to, and did, present its case on both the appropriateness of the EDP and the merits through written submissions, an oral hearing, and further written submissions.
• On the Excess of Submission Complaint, the court found that the defendants’ arguments on the factual issues were clearly maintained at the hearing and in the EDP application. The tribunal’s factual findings did not go beyond the scope of what was submitted. The court further doubted whether Article 34(2)(a)(iii) of the UNCITRAL Model Law could be carved out to apply only to the EDP application, as opposed to the scope of the entire arbitration, as a ground for setting aside an award.

Public Policy Ground

• The court found no manifest incoherence in the partial award. Reading the award as a whole, the tribunal coherently explained why the defendants acted reasonably. The court also rejected the infra petita complaint, finding that the tribunal dealt with the factual aspects of the dispute implicitly through its overall reasoning.

Costs award

• The court dismissed the challenges to the costs award, finding that the tribunal was entitled to adopt a broad-brush approach to costs assessment and was not obliged to follow court taxation scales and practices.

Conclusion and practical implications

This is one of the very few Hong Kong court judgments to directly consider and uphold the HKIAC EDP mechanism. This decision shows the court will not set aside an EDP award merely because the requesting party’s application could have been more concise or better structured. Consistent with the Hong Kong courts’ pro-arbitration attitude, there needs to be serious procedural unfairness before the court will set aside an EDP award. The decision sends a clear signal that the Hong Kong courts support the use of EDP as a legitimate and efficient procedural device in HKIAC arbitration. Practitioners should take comfort from the following:

• Tribunals have wide discretion over EDP procedure: The court endorsed the view that the tribunal is “master of his own procedure” and that Article 43 does not prescribe the level of precision required in formulating points of law or fact. This gives tribunals flexibility to manage EDP applications pragmatically.
• EDP can resolve fact-sensitive disputes: The court endorsed the tribunal’s approach of taking the claimant’s factual allegations as true and concluding that, even on that basis, the claims were manifestly without merit. This illustrates that EDP is not limited to purely legal issues and can be deployed where factual disputes do not preclude summary disposal.
• Parties must raise procedural objections promptly: The court confirmed that a party who participates fully in EDP proceedings without contemporaneous complaint may be taken to have waived any procedural irregularity. The court ruled that there could be no entrenched rights to a full hearing where the EDP had properly dismissed the plaintiff’s claims. Accordingly, respondents to EDP applications should raise objections promptly to preserve their rights.

Client Alert 2026-119