Reed Smith Client Alerts

On 31 July 2023, the Hong Kong Court of First Instance issued a judgment in Song Lihua v. Lee Chee Hon [2023] HKCFI 1954 (31 July 2023), whereby the Hon. Mimmie Chan J (Judge) held that arbitrators are generally entitled to arbitral immunity absent fraud or bad faith, which means that arbitrators should be immune from suit for any act committed and should not be compelled to testify as a witness in relation to the exercise of their arbitral functions. This decision highlights the pro-arbitration stance of the Hong Kong court and illustrates why Hong Kong continues to be widely regarded as one of the most popular arbitral seats for international arbitration.

The Respondent’s challenge against the Mainland Award

The court granted the applicant (Applicant) leave to enforce a mainland Chinese arbitral award (Mainland Award) in Hong Kong under the Arbitration Ordinance (Ordinance). The respondent (Respondent) applied to set aside leave for enforcement on procedural and public policy grounds (Setting Aside Application). The Respondent claimed, inter alia, that he had not been validly served with documents and submissions in the arbitration, that he was not given the opportunity to nominate an arbitrator of his choice and that he could only appoint a lawyer to attend the second (but not the first) hearing of the arbitration (Hearing).

Further, the Respondent claimed that one of the three members of the arbitral tribunal (Arbitrator) was not physically present at the Hearing. Instead, the Arbitrator attended the Hearing remotely, but was seen moving from place to place in public throughout the proceedings and using only his mobile phone without any earphones. The Respondent argued that it was against public policy to enforce the Mainland Award when the Hearing was conducted in such a manner (Hearing Complaint).