Reed Smith Client Alerts

The Hong Kong court is well known for its pro-arbitration and pro-enforcement approach. However, it is also known that the Hong Kong court is prepared to set aside arbitral awards or intervene in arbitration proceedings where circumstances require. In this article, we examine two recent Hong Kong court judgments in A Consortium Comprising TPL and ICB v. AE Limited [2021] HKCFI 2341 and 广东顺德展炜商贸有限公司 v. Sun Fung Timber Company Limited [2021] HKCFI 2407, which illustrate the Hong Kong court’s approach towards the enforcement of arbitral awards in Hong Kong.

1. A Consortium Comprising TPL and ICB v. AE Limited [2021] HKCFI 2341: Hong Kong court intervened to cure the irregularity as to the capacity of the applicant to the arbitration

The Hong Kong court granted an ex parte enforcement order against the respondent in favour of the applicant.  The respondent then applied to set aside the enforcement order on, among others, the ground that the enforcement order was irregular. In particular, the respondent argued that the applicant was not a legal entity capable of suing and being sued under the laws of Hong Kong. The application was heard before the Hon. Mimmie Chan J.

The applicant was named as the “Joint Venture” (JV) in the underlying agreement, but was then named as the “Consortium comprising TPL and ICB” (Consortium) in the arbitration and enforcement proceedings. The judge agreed that it was necessary for award enforcement proceedings in Hong Kong to be properly constituted and brought by a recognised legal entity and also accepted that there was no evidence of any partnership or corporation carrying on business in Hong Kong in the name of “A Consortium comprising TPL and ICB”. As such, neither the JV nor the Consortium was a legal entity which could sue or be sued in its name.

However, the judge found that the respondent was under no doubt or confusion as to the identity of the applicant in the arbitration. In the answer and counterclaim served by the respondent, the respondent referred to the applicant as the “Consortium” without any complaint as to its legal identity. The awards also made the identity of the applicant beyond doubt, stating it was “a consortium comprising TPL of the United Arab Emirates and ICB of Lebanon”.

The judge held that, applying Hong Kong procedural law governing the constitution of the enforcement proceedings, the two parties named as the “Consortium” should be the parties jointly entitled to leave to enforce the awards in favour of the Consortium, i.e., TPL and ICB. To cure the defect or irregularity of the original applicant (i.e., the Consortium) as to its capacity to commence the arbitration proceedings, the judge decided to grant leave to join both TPL and ICB as additional applicants to the enforcement proceedings, following which the judge also granted leave to TPL and ICB as additional applicants to enforce the awards.