Hong Kong court dismisses set aside application after plaintiffs fail to establish a “conscious disregard” of the law

In American International Group and AIG Capital Corporation v. X Company [2016] HCCT 60/2015 (30 August 2016),  the Hong Kong Court of First Instance has dismissed an application to set aside an arbitral award. In its judgment, the Court found that although the Tribunal may have made errors of law, it could not be established that it had “consciously disregarded” the applicable law in order to reach what it believed to be the fair and equitable outcome.

Background

A dispute arose between the parties to a Share Purchase Agreement (“SPA”), under which the Plaintiffs agreed to sell up to 90% of a subsidiary to the Defendant. The SPA provided a long stop date for closing of the sale and provided for a deposit, representing 10% of the purchase price (the “Deposit”), to be paid into an escrow account. The SPA specified that the Deposit “constitutes a reasonable estimate of the damages that will be suffered by (Plaintiffs) as a result of any breach or failure”. The Defendant failed to raise the necessary funds and completion of the SPA did not take place as envisaged.

The dispute was referred to arbitration in Hong Kong. The tribunal was asked to determine on whether the Plaintiffs were entitled to keep the Deposit as liquidated damages under the SPA, or whether the Defendant had the right under the Escrow Agreement to seek return of the Deposit, since it had failed to obtain the regulatory approvals required to complete the purchase.

The Majority of the arbitral tribunal found that the Plaintiffs were not entitled to keep the Deposit, and that it should be returned to the Defendant. The Plaintiffs applied to the Hong Kong court for the Award to be set aside under s.64 Arbitration Ordinance (Cap 609), on grounds that the arbitrators had disregarded basic principles of New York law, which the parties had agreed would govern the dispute, in order to arrive at what the Majority considered the fair or equitable result. This, it was argued, amounted to the Majority deciding the dispute ex aequo et bona or as amiable compositeur when it was not authorised to do. The Plaintiffs also applied for set aside under various limbs of s.81 Arbitration Ordinance, including that the tribunal had exceeded its mandate.

Judgment

The Court first made clear that even if the findings made by the Majority were wrong in law, this was not a ground for the Award to be set aside (Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in liq) (No 1) [2012] 4 HKLRD 1). The setting aside remedy under Article 34 of the Model Law is not an appeal on the law. The Court is concerned only with the structural integrity of the arbitration process.

Therefore, the main question for determination was whether the errors of law contended by the Plaintiffs to have been made by the Majority amounted to a “conscious disregard” of the agreed New York law. From a review of the Award, it could not be said that the tribunal had totally disregarded the governing law, since it had considered a host of decisions from the Court of Appeals of New York and of the Supreme Court. The Plaintiffs sought to argue that, notwithstanding the references to New York law, the Award could not have been made but for the Majority’s conscious and deliberate decision to disregard the law. According to the Plaintiffs, the Majority’s conclusion was intentionally “cloaked in purported legal analysis”.

The Court affirmed the need for a disciplined approach to drawing inferences, in particular for inferences of serious misconduct. Such inferences should be drawn only where there is compelling evidence to support them, rather than on a mere balance of probabilities. Experienced lawyers and arbitrators may still make mistakes. It is unjustifiable to conclude, from these errors, that the Majority understood that they had made errors, but chose deliberately to ignore them. There must be proper foundation for any inference to be drawn, and “it is not permissible merely to choose what may be considered to be the more likely of two guesses if neither is properly justified by the primary facts found”. Based on the primary facts of this case, inferring that the Majority had made a conscious and deliberate choice to ignore the binding New York authorities in order to arrive at what the Majority perceived to be the fair result in the arbitration, required a “quantum leap” that was not justified by a fair, objective reading of the Award.

Since the Plaintiffs "failed at the first hurdle" in not establishing conscious disregard of the law, the Court did not need to decide whether the tribunal had exceeded its mandate under s.81 Arbitration Ordinance.

The Plaintiffs’ application to set aside the Award was dismissed with costs on an indemnity basis.

Commentary

In Hong Kong, as in any Model Law jurisdiction, an error of law made by an arbitral tribunal is not a valid ground for setting aside an award. An applicant must prove that there was a "conscious disregard" of the applicable law. Such an inference is often considered an attack on the professional integrity of the tribunal. Therefore, when raised, it must be properly grounded in the primary facts of the case. The Courts will not easily speculate on the reasons or motives behind a tribunal’s decision, nor will they correct an error of law.

 

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Singapore High court confirms Singapore’s approach to preserving the confidentiality of arbitrations

In a decision handed down this week, the Singapore High Court confirmed that the court has an inherent power to grant sealing orders barring public access to court files and documents in appropriate cases. In this case that power was used to protect the confidentiality of an ongoing arbitration between the applicant and a third party. The Court reached this decision despite there being no express provision to this effect in Singapore's International Arbitration Act (IAA). 

In the case of BBW v BBX and others [2016] SGHC 190, the plaintiff (BBW) applied for an order that all court documents and records in a court action against him be sealed. The action (the Suit) concerned an application for enforcement of an indemnity agreement in connection with a SIAC arbitration in which BBW was being sued by a third party (the Arbitration). BBW argued that he was likely to rely on facts and/or documents relating to the Arbitration for the purposes of the Suit, and it was likely that these would be referred to in the Suit's pleadings and documents in any event.

BBW's application relied on (i) sections 22 and 23 of the IAA; and (ii) the inherent power of the Court to order sealing.

Confidentiality under ss 22 and 23 of the IAA

Sections 22 and 23 of the IAA provide that proceedings under the IAA shall be held "otherwise than in open court" (i.e. they provide for the confidentiality of arbitration), and that where they are not, a court may on the application of a party give directions as to whether any (and if so, what) information relating to the proceedings may be published.

While the Arbitration fell within the scope of the IAA, the Court found that the Suit did not qualify as a proceeding under the IAA, since it was a claim in contract concerning the Indemnity Agreement. Accordingly, ss22 and 23 of the IAA did not apply.

The Court's inherent power to grant a sealing order

While sealing orders are "part and parcel of [Singapore’s] civil procedure", the Courts' power to grant sealing orders is not expressly provided for by any statute or rule of court, and the source of this power was noted by Justice Lee to be an "open question". Examining the issue further, and noting academic commentary on the subject, he found that the court must have an inherent power to grant a sealing order – to conclude otherwise would mean that the Singapore courts have been acting ultra vires through the years in granting sealing orders. Furthermore, Justice Lee also found that sealing orders fell within the inherent powers of the Court to achieve a just outcome (per O 92 r 4 of the Rules of Court), and should be used "in exceptional circumstances when there is a pressing need to ensure a just outcome".

Exercise of the Court's inherent powers

Justice Lee noted that the public policy of keeping arbitrations confidential has been affirmed by both the courts and the Singapore Parliament. He explained that, in the arbitration context, the decision to grant a sealing order is made by weighing the principle of open justice against the need to preserve confidentiality in arbitration, noting that sealing orders are fundamentally concerned with a "just outcome".

The Court considered that the fact that the Arbitration was between different parties to the Suit did not make any difference in the circumstances as there was a considerable overlap in the facts – evidence adduced in the Suit would compromise confidentiality of the Arbitration.

Conclusion

The ruling in BBW confirms that protecting the confidentiality of arbitrations is of utmost importance in Singapore, and courts may use their powers to preserve this even in cases which are not brought under the IAA but nonetheless relate to an arbitration. The test in such cases will be whether, on the facts, the need for preserving the confidentiality of an arbitration is outweighed by principles of public interest and open justice.

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Hong Kong Court orders stay to arbitration pursuant to proper steps of escalation clause for dispute resolution

In William Lim and Another v. Hung Ka Hai Clement and Others [2016] HKCFI 1439; HCA 1282/2016 (24 August 2016), the Hong Kong Court of First Instance ordered a stay of court proceedings and referred an ongoing dispute to arbitration pursuant to s 20 (1) of the Arbitration Ordinance (Cap 609). The Court found that it had no jurisdiction when an action brought before it is one which is the subject of an arbitration agreement.

Background

Disputes arose between the parties after the Defendants, members of the Governing Board of a large professional services firm, decided to impose a financial penalty on two firm members (the Plaintiffs). The Plaintiffs had sent emails to other partners of the practice expressing concerns on the Board’s decisions and further raised issues with the Board’s governance. By their dispatch of various emails to other partners, the Plaintiffs allegedly acted in breach of their confidential obligations by communicating highly sensitive information concerning the firm.

The Plaintiffs sought an order from the court that the Board’s sanctions were void, had no effect and should be set aside because the Plaintiffs were not given the opportunity to know and answer the charges made against them, and that members of the Board had exercised their power for improper purposes. The Defendants applied to stay the proceedings to arbitration, pursuant to the arbitration clause contained in the Shareholders’ Agreement. The judge granted the stay, with costs to be paid by the Plaintiffs on an indemnity basis.

The judgment

The Court first reiterated that an applicant for stay has only to demonstrate that there is a prima facie case that the parties are bound by an arbitration clause. Unless the point is clear, the Court should not attempt to resolve the issue but should stay the matter in favour of arbitration (PCCW Global Ltd v. Interactive Communications Services Ltd [2007] 1 HKLRD 309). The Court has no discretion under s 20 (1) of the Arbitration Ordinance (Cap 609), if the action brought before it is one which is the subject of an arbitration agreement – unless the agreement is null and void, inoperative or incapable of being performed.

The Shareholders’ Agreement, which was the governing document in this matter, contained an escalation dispute resolution clause. It provided for disputes to be referred, first to the Chairman, and failing such resolution, to the Governing Board. If the dispute is still not resolved by the Governing Board within the time specified, then it may be referred to arbitration for final resolution.

The Plaintiffs’ main argument was that they were entitled to maintain the court proceedings, since the dispute between the parties had already been referred to the Chairman for resolution, and the mechanism for dispute resolution had been exhausted.

The Court found no merit in the Plaintiffs’ argument. If the dispute had been referred to the Chairman, and/or the Board, and if, as the Plaintiffs contended, the dispute was resolved by the Chairman by imposing the monetary sanctions, such resolution was clearly not to the satisfaction of the Plaintiffs. Since the sanctions imposed by the Board were not admitted by the Plaintiffs, there was clearly a dispute between the parties, and such dispute fell within the ambit of the arbitration clause in the Shareholders’ Agreement. All the other matters raised by the Plaintiffs, as to whether or not they were entitled to circulate the emails amongst the partners, are to be considered and decided by the arbitral tribunal, not by the Court.

In the Court's view, the Plaintiffs’ resistance to the stay was misconceived. There was no merit in their claim that the dispute resolution procedure had been exhausted when there were clearly residual disputes, which had not been resolved by the Chairman or the Board to the satisfaction of the parties. In the broader context, even in the course of one reference to arbitration, more than one dispute may arise, and unless all these disputes are resolved and decided by the tribunal, the arbitration cannot be said to have been terminated. Further, one or more disputes may arise under the arbitration agreement between the same parties. The fact that one dispute has been referred to arbitration does not mean that the arbitration agreement has been performed, and cannot be further implemented.

Costs were ordered on the indemnity basis. However, it is unclear from the judgment whether this was on the basis of the Plaintiffs' conduct or an extension of the court's general practice of awarding indemnity costs in failed arbitration-related applications.

 

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English Court refuses to allow challenge to arbitral award to be discontinued

The English Court has recently held that a party will not be able to discontinue appeal proceedings challenging an arbitral award in circumstances where to allow it do so would: (i) circumvent the jurisdiction of the supervisory court; and/or (ii) rely on the same appeal grounds at the recognition and enforcement stage.

In National Iranian Oil Company (NIOC) v Crescent Petroleum Company International Ltd (CP) & Crescent Gas Corporation Ltd (CG), NIOC had sought to discontinue its appeal and provided an undertaking stating that it would not resist recognition or enforcement of the arbitral award by relying on arguments based on the grounds of the appeal. The Court found that CP and CG (together Crescent) were justified in rejecting the undertaking as the terms allowed NIOC to make the same allegations in another forum. The Court also found that even if a sufficient undertaking was provided, it would not preclude the risk that NIOC could resist enforcement in a New York Convention court.

The Court set aside the notice of discontinuance and considered the grounds of appeal on the merits, even though NIOC did not attend the hearing. The grounds were dismissed and costs were awarded on an indemnity basis.

This decision makes clear that the English Court will not permit grounds of appeal to be preserved as a basis for resisting further enforcement or recognition proceedings.  The Court will carefully consider any undertaking to court to ensure this is not the case. This is in line with the English Court's pro-enforcement bias and the view that the court of the seat is the appropriate forum in which to challenge the award.  

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KATHRYN SANGER JOINS HERBERT SMITH FREEHILLS AS ARBITRATION PARTNER

kath-sangerhsf-com_hgsLeading practitioner Kathryn Sanger is joining Herbert Smith Freehills' top-rated international arbitration team as a partner, based in Hong Kong. She will join the firm in October 2016.

Kathryn will be the team's 13th dedicated arbitration partner in Asia. She joins the largest disputes practice in Asia, comprising 20 partners and a sterling list of regional and international clients.

Kathryn joins the firm's existing dedicated Greater China arbitration partners – Justin D'Agostino, Simon Chapman and May Tai in Hong Kong, Jessica Fei in Beijing, and Brenda Horrigan in Shanghai. This market-leading team works on the most complex and high value cases in the region, as part of the firm's renowned global arbitration practice.

"I'm truly delighted that Kathryn is joining us – she is an outstanding practitioner, a natural fit for our team, and given her particular expertise in financial services and energy arbitration, will help us expand our client offering in Asia," said D'Agostino, Global Head of Disputes and Regional Managing Partner, Asia and Australia.

"Kathryn's appointment also adds to our China capabilities, as our third dedicated arbitration partner with fluent Mandarin skills. Given the growing global focus on the equal representation of women in arbitration, we are also rightly proud that close to 50% of our Asia arbitration partners are female."

Kathryn has nearly 15 years' experience of arbitration and litigation proceedings in Asia, particularly in joint venture and China-related proceedings, enhanced by her ability to speak and read Mandarin Chinese fluently.

Her practice covers a wide range of international arbitration matters and arbitration-related litigation, with particular strengths in financial services and energy.

She is also a longstanding member of the Hong Kong International Arbitration Centre (HKIAC) Council, chairing its appointments committee, and has been closely involved in the development of HKIAC into one of the world's leading arbitral institutions.

Kathryn is admitted to practice in Hong Kong and England and Wales.

 

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Taizhou Intermediate People’s Court Refuses Recognition and Enforcement of ICC Award on Basis of Public Policy

 

In Taizhou Haopu Investment Co., Ltd. v Wicor Holding AG, Taizhou Court, P. R. China, Case Docket Number: [2015] Tai Zhong Shang Zhong Shen Zi, No. 00004 (2 June 2016), the Taizhou Intermediate People’s Court of Jiangsu Province (the “Taizhou Court”) denied the recognition and enforcement of an ICC award on the basis of the public policy exception under Article 7 of the Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong SAR (the “Arrangement”). This is the second time a Chinese court has relied on the public policy exception to refuse enforcement and recognition of a foreign arbitral award, following the Jinan Intermediate People's Court of Shandong Province's 2008 decision in the “Hemofarm” case.[1]

Background

On 6 July 1997, the Claimant, Swiss Company Wicor Holding AG (“Wicor”), entered into a joint venture contract (the “Contract”) with a Chinese company, Taizhou Haopu Investment Co., Ltd. (“Haopu”). The Contract provided for arbitration under the ICC Rules (the “Arbitration Agreement”). Following a dispute, Wicor commenced an ICC Arbitration on 4 November 2011. The ICC Tribunal issued final arbitral award 18295 / CYK, dated 18 July 2014, with an addendum dated 27 November 2014 (the “Award”).

Prior to the Award, in a related dispute between the Parties under the Contract, the Jiangsu High People's Court held that the Contract’s arbitration clause was invalid under Chinese law for failure to specify an arbitration institution ([2012] Su Shang Wai Xia Zhong Zi, No. 0012, 11 December 2012). The Arbitration Law of China and its Judicial Interpretation requires an arbitration agreement to specify an arbitral institution, otherwise the agreement will be invalid. The Jiangsu High Court held that, because the Contract simply specified arbitration under the ICC rules, and the arbitration clause pre-dated the 2012 ICC Rules (which provide that the ICC Court is the only institution allowed to administer ICC Arbitrations), the parties had failed to specify an institution.

Shortly after the Award, Wicor applied for recognition and enforcement of the Award (the “Application”) pursuant to the Arrangement. Haopu filed an objection to the Application on the basis that the Award violated China’s judicial sovereignty.

The Decision

At issue before the Taizhou Court was whether a previous decision by the Jiangsu High People’s Court, in a related dispute between the parties, violated the public policy exception of the Arrangement. The Taizhou Court reasoned that the Jiangsu High Court’s decision, which was issued nineteen months prior the Award, had already found that the Contract’s arbitration agreement was invalid under Chinese Law. The Taizhou Court observed that the Award was made under the assumption that the Arbitration Agreement was valid, and thus, was in direct conflict with the Jiangsu High Court’s decision and violated the “societal public interest” of the PRC.[2] The Taizhou Court relied on the last paragraph of Article 7 of the Arrangement regarding public policy in denying recognition and enforcement of the Award.[3] 

Comment

In the past, Chinese courts have tended to refuse requests to deny the enforcement of foreign arbitral awards on the basis of public policy.[4] However, it appears that Haopu is bucking this trend, in that this is the second time that a Chinese court has refused to enforce a foreign arbitral award on the basis that the award violates China's judicial sovereignty. Haopu has been distinguished from the “Castel” case, in which China's Supreme People's Court ruled that violation of judicial sovereignty was not a sufficient basis to deny enforcement of a foreign arbitral award, where the foreign award was rendered earlier than a Chinese court decision finding that the arbitration clause at issue was invalid.[5] Thus, it would seem that Hemofarm, Castel, and Haopu demonstrate that Chinese courts will likely, on the basis of public policy, refuse to enforce foreign arbitration awards that conflict with a prior Chinese court ruling on an issue of Chinese law.

 

[1] China No. 5, Hemofarm DD (Serbia) v. MAG Intertrade Holding DD (Serbia), Suram Media Ltd. (Liechtenstein) and others, Jinan Intermediate People's Court of Shandong Province, 27 June 2008, in which the Jinan Intermediate People’s Court denied enforcement of an ICC Award on the basis that the award ruled that the respondent’s application in Chinese court for property preservation was unlawful and that the respondent’s lease litigation in Chinese court violated the respondent’s JV contract with the claimant. Arguably, the ICC Award in Hemofarm constituted a more direct affront to China's judicial sovereignty than the ICC Award in Haopu.

[2] “Societal public interest”, or shehui gonggong liyi (社会公共利益) in Chinese, is the Arrangement's corollary term in Chinese for “public policy” under Article V of the New York Convention. The English version of the Arrangement simply uses the term “public policy” and not “societal public interest” as the translation for shehui gonggong liyi (社会公共利益).

[3] Notably, the Taizhou Court could have relied on Art. 7(1) of the Arrangement (regarding validity of the arbitration agreement), but apparently chose not to, thereby avoiding a conflict as to whether the Taizhou Court's decision on the validity of the arbitration agreement trumped that of the ICC. Article 7.1 of the Arrangement provides that a party can apply before a Mainland China court for the refusal of enforcement of an award if “the arbitration agreement was not valid under the law to which the parties subjected it, or, failing any indication thereon, under the law of the place in which the arbitral award was made.

[4] See Anton G. Maurer, Public Policy Exception under the New York Convention (Juris Publishing 2013), p. 343.

[5] Reply of the Supreme People's Court on Castel Electronics Pty Ltd.'s Application for Recognition and Enforcement of Foreign Arbitral Award, [2013] Min Si Ta Zi, No. 46 (10 October 2013). 

 

 

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Suitability of ad hoc admissions: Singapore Court admits English QC for arbitration appeal

Introduction

The Singapore High Court has taken the rare step of allowing an English QC to appear before it in relation to an application to set aside an arbitral award made in an investor-state arbitration; the first successful ad hoc admission of a foreign lawyer since 2012.  As the facts of the case are quite specific, it is not expected that this marks a significant departure from the Court's restrictive approach to foreign admissions. However, the case demonstrates that for highly complex and niche matters outside the field of general practice in Singapore, there is still a place for foreign counsel. 

The case is also of interest as both the Singapore law society and the Singapore Attorney General's chambers were permitted to intervene; each supporting different views.  Ultimately, the successful admission application reflected the Singapore Government's policy, put forward by the Attorney General's office, of encouraging Singapore as a leading seat of arbitration for both commercial and investment cases.

Representation in the Singapore Courts

As a general rule, representation in the Singapore Courts is limited to local Singapore advocates. The two exceptions to the general rule are: (a) where the Court permits a Queens Counsel, or lawyer of equivalent rank, on an ad hoc basis for a specific case; and (b) where foreign lawyers have been registered to appear before the new Singapore International Commercial Court (see our post here). 

When deciding whether to permit ad hoc admission of foreign counsel, the Singapore Courts will consider three mandatory requirements. The advocate must:

  • hold the title of Queen's Counsel, or the equivalent distinction for other jurisdictions;
  • not ordinarily reside in Singapore or Malaysia; and
  • have special qualifications or experience for the purpose of the case.

If these requirements are met, the court must then consider:

  • the nature of the factual and legal issues involved in the case;
  • the necessity for the services of a foreign senior counsel;
  • the availability of any Senior Counsel or any other advocate in Singapore with appropriate experience; and
  • whether, having regard to the circumstances of the case, it is reasonable to admit a foreign senior counsel for the purpose of the case.

In considering these factors, the Court has "discretion to attribute appropriate weight to each factor" and the factors should be used as "signpost[s] pointing to the ultimate question of whether it is reasonable to admit the applicant".

Background to the case

In Re Wordsworth [2016] SGHC 172. the Kingdom of Lesotho (the "Claimant") applied to allow Mr Samuel Wordsworth QC to represent it in an application to set aside a Partial Award on Jurisdiction and the Merits arising from an investor-state arbitration.  The original arbitration, in which Mr Wordsworth was lead counsel, related to mining licences in Lesotho and involved the interpretation of a number of international treaties.

The Claimant argued that Mr Wordsworth's expertise would be highly relevant in resolving complex and novel issues in a case which was of unusual importance, given the lack of precedent. That position was supported by the Attorney-General, who also argued that allowing foreign counsel to act in cases such as the Claimant's would further enhance the attractiveness of Singapore as a seat for international arbitration, by confirming to parties that their lead arbitration counsel may continue to appear if the arbitral award is challenged in Court.

The Respondent argued that Mr Wordworth's expertise was not relevant, as the dispute turned on the interpretation of the International Arbitration Act and not complex issues of public international law and, therefore, the case could be adequately handled by local counsel. The Law Society criticized the Claimant's efforts in considering the availability of local counsel stating that it "failed to give due credit to the experience and quality of the local Bar".

The Court's decision

The Singapore Court agreed with the Claimant and admitted Mr Wordsworth QC on an ad hoc basis.  The Court confirmed that the application must be viewed through the "prism of need", viewed from the perspective of both the litigant seeking admission of its counsel, and more broadly, the need of the court to "receive proficient assistance from counsel with the requisite expertise and experience." As the case was of a complex and international nature and there were "few local advocates with the requisite expertise" to properly address the issues, it was unreasonable to limit the involvement of Mr Wordsworth.  That was particularly pertinent in this case due to Mr Wordsworth's familiarity with the case from the underlying arbitration and his expertise in the field such that he was best-placed to serve the needs of both the litigants and the Court.

The Court also stated that promoting Singapore as a venue for international arbitration was a "relevant consideration". However, this was not the dominant reason for admitting Mr Wordsworth, and instead was merely a factor which the courts should consider when determining whether admission was reasonable.

Conclusion

As the case is relatively fact specific, it is not expected that this marks a significant shift in policy by the Singapore Courts.  The Court highlighted the "unique circumstances" of this case, differentiating it from previous applications for admission where the issues were more local and the issues were "well within the range of competent Singapore counsel".

Nevertheless, it is significant that the Court took account of the policy objective of promoting Singapore as a venue for international arbitration.  As with other government initiatives, such as income tax exemptions for visiting arbitrators, the establishment of Maxwell Chambers as a purpose built dispute resolution venue, and the more recent creation of the Singapore International Commercial Court, Singapore demonstrates repeatedly how it is determined to be a leader in high-quality, commercially focussed, internationally attractive dispute resolution.

For more information on this case or representation in the Singapore International Commercial Court, please contact Alastair Henderson (Partner), Daniel Waldek (Senior Associate) or any of your usual Herbert Smith Freehills contacts.

Alastair Henderson
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The UK Independent Press Standards Organisation Launches Pilot Arbitration Scheme

In August 2016, the Independent Press Standards Organisation (IPSO) announced the launch of its pilot arbitration scheme. It comes nearly four years after Lord Justice Leveson's recommendation for a "fair, quick and inexpensive" arbitration service for resolving disputes against members of the press. A number of the UK's national publishers have already signed up.

The industry regulator's trial scheme aims to provide a low-cost alternative to what is often perceived as a lengthy and expensive journey through the UK court system. At the same time, the new scheme's suite of remedies theoretically offers claimants stronger recourse than the IPSO's current mechanism for handling complaints under its Editors' Code of Practice.

Full details of the new scheme can be found here.

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Client Event: London Launch of HSF Guide to Dispute Resolution in Africa, second edition. Locking Horns in Africa? Let us Be Your Guide

Herbert Smith Freehills is delighted to invite clients to the London launch event of the second edition of our Guide to Dispute Resolution in Africa.

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Hong Kong Court of First Instance extends indemnity costs principle to actions that delay enforcement of arbitral awards

In Peter Cheung & Co v. Perfect Direct Limited & Yu Guolin (HCMP 2493/2012) ("HCMP Action") and New Heaven Investments Limited & Rondo Development Limited v. Yu Guolin (HCA 115/2013) ("HCA Action"), the Hong Kong Court of First Instance ("CFI") has extended the principle of indemnity costs to cases where a party attempts to delay the enforcement of an arbitral award. Whilst the action in the present judgment was not a direct challenge to an arbitral award, the CFI found that the purpose of the action was "clearly an attempt to delay the enforcement of an arbitral award" and therefore indemnity costs should be awarded to deter such behaviour. Click here for the full judgment.   

This extension of the indemnity costs principle, beyond challenges to arbitral agreements and awards to actions attempting delay, reinforces the pro-arbitration approach of the Hong Kong courts and its efforts to deter so-called "guerilla tactics" employed by unsuccessful parties to frustrate arbitral awards.

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