The arbitration (Arbitration) concerned a distribution agreement (Agreement) entered into between HW and LY. LY terminated the Agreement on the basis that HW had failed to achieve the contractual annual sales value (ASV). In the Arbitration, HW sought a declaration that LY was in breach of the Agreement and that LY’s purported termination was invalid. The arbitral tribunal (Tribunal) issued an award (Award) in favour of HW.
LY’s application to set aside the Award
LY applied to the Hong Kong court to set aside the Award on the following grounds:
- The arbitral procedure was not in accordance with the parties’ agreement, in that the Tribunal failed to deal with all the key issues which had been put before it and/or the Tribunal failed to provide sufficient reasons for its decisions on the key issues; and
- The Award was in conflict with the public policy of Hong Kong.
LY argued that the Tribunal had failed to deal with certain key issues that were integral to the resolution of the dispute relating to the calculation of ASV and that, if any of those key issues had been found in favour of LY in the Arbitration, the Tribunal would have found that HW had failed to meet the ASV. LY therefore argued that the Tribunal had failed to deal with the key issues put before it and/or the reasons provided by the Tribunal in the Award were insufficient to enable the parties to understand the legal basis of the Award.