In our previous alert, we examined the decision in W v. AW  HKCFI 1707, where the Hong Kong Court of First Instance (CFI) dismissed AW’s application on 17 June 2021 for security on the basis that W had a strong case to set aside the “manifestly invalid” arbitral award that AW sought to enforce (the Security Judgment).
This alert examines the series of judgments that were issued by the Hong Kong courts in the same matter after the Security Judgment and the important legal issues arising therefrom.
Application for leave to appeal against the Security Judgment
AW applied for leave to appeal against the Security Judgment, and the application was dismissed by the same judge on 16 August 2021. AW then sought leave from the Court of Appeal (CA) ( HKCA 685). The CA refused to grant leave to appeal, holding that the lack of opportunity for the parties to address the tribunal on the First Award gave rise to concern about the “structural integrity of the arbitral process”. Further, applying Halliburton v. Chubb  3 WLR 1474, the CA held that the duty of confidentiality was not absolute and did not prevent the common arbitrator from inviting submissions from the parties for the purpose of upholding the integrity of the arbitral process.
Applications to set aside the First Award and Second Award
Separately, setting aside proceedings in respect of the First Award and Second Award also went before Hong Kong courts:
- On 26 January 2022, the CFI set aside the Second Award and on 3 May 2022, dismissed AW’s application for leave to appeal ( HKCFI 1296).
- On 13 May 2022, the CFI dismissed AW Group’s application to set aside the First Award ( HKCFI 1397).
The Second Award – set aside
In the Security Judgment, the judge stated that given the inconsistent findings in the First Award and the Second Award, no further hearing was required in respect of the setting aside of the Second Award and that the parties should sensibly confer on the orders to be made by consent. The setting aside application for the Second Award nevertheless went before the CFI and was granted on 26 January 2022. AW then applied to the CFI for leave to appeal against the decision. AW argued that the contradictory findings made by the tribunal in the Second Arbitration were justified because of additional evidence not available in the First Arbitration. Eventually, the CFI rejected AW’s application for leave to appeal. The CFI held that as the tribunal in the Second Arbitration did not explain why it had made contradictory findings, the court was not in a position to substitute the court’s view for that of the tribunal or to second-guess the reasons for the tribunal’s contradictory findings.