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An arbitral award was set aside in the Hong Kong Court of First Instance decision, AB v. CD [2021] HKCFI 327, on the basis that the arbitral award was made against the wrong entity, which was not a party to the arbitration agreement. Alternatively, the purported respondent was not given proper notice of the arbitral proceedings or the appointment of the arbitrator. This decision is significant as it is one of the very few cases where the Hong Kong court has intervened to set aside an arbitral award.

Authors: Lianjun Li Min Li Donald Sham Clara Fung

Summary of facts

This case concerned an application made by AB (AB Engineering) to set aside an award made against it in an arbitration administered by the Hong Kong International Arbitration Centre. The arbitration clause was contained in an agreement between AB Bureau (Bureau) and CD (the Agreement). The background facts are as follows.

On 24 April 2019, CD issued a notice of arbitration (the NOA), with Bureau named as respondent, for payment of a success fee of approximately US$11 million for services rendered by CD under the agreement.  Bureau did not submit its Answer to the NOA or participate in the process of the appointment of the sole arbitrator.

On 16 and 17 July 2019, CD received an email from Ms X, who described herself as from the “Contracts & Legal Department of AB (AB Engineering, previously called AB Bureau) International” and from Mr Y, who described himself as from the “Legal Department of AB Engineering Middle East (previously named AB Bureau)”, respectively. In the first email, Ms X sought clarification regarding the precise agreement under which the arbitration was commenced and, in the second email, Mr Y asked to be provided with the correspondence in relation to the arbitration which they did not receive. It is not clear whether and how the requests of Ms X and Mr Y were dealt with.

On 17 July 2019, CD amended the NOA (the Amended NOA), revising the name of the respondent from Bureau to “AB Bureau also known as AB Bureau Co, Ltd”.

On 11 November 2019, CD made a request to change the name of the respondent, from Bureau to AB Engineering. When asked by the arbitrator to clarify the basis of this second change of name, CD referred to the “History” section of the respondent’s website, which, according to CD, showed that Bureau became AB Engineering after restructuring. The arbitrator accepted CD’s request and issued Procedural Order No. 2, stating the finding that CD was able to demonstrate that “the legal entity called AB Bureau has been renamed as AB Engineering”. The arbitrator ordered that all references to the respondent or Bureau shall be deemed to be references to AB Engineering and that CD did not have to resend any of the pleadings or submissions to the respondent.

The only respondent named in the final award was AB Engineering, which was found liable to pay US$18 million plus interest and costs to CD. The arbitrator noted in the award that the respondent had chosen not to participate in the arbitration.