Hong Kong Court continues injunction in aid of foreign arbitral proceedings

In Ve Global UK Limited v Charles Allard Jr and Intelita Limited, HCMP1678/2017, 10 October 2017, the Hong Kong Court of First Instance continued injunctions and dismissed the Defendants’ allegation of abuse of process in respect of the Plaintiff’s delay in commencing arbitration proceedings in relation to the underlying dispute after having obtained urgent injunction orders against the Defendants.
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HERBERT SMITH FREEHILLS – SMU ASIAN ARBITRATION LECTURE 22 NOVEMBER 2017

Emeritus Professor Dr. Surin Pitsuwan: ASEAN’s role and opportunities in public and private dispute resolution

The Herbert Smith Freehills – SMU Asian Arbitration Lecture Series was established in 2010 and was made possible by a term fund contribution by Herbert Smith Freehills. The objective of the Lecture Series is to promote collaborative forms of dispute resolution and access to justice and in so doing promote Singapore as the centre for dispute resolution in Asia, particularly in arbitration and mediation. Each year, a distinguished international arbitrator will be invited to present this lecture, which in turn will be published in a leading regional arbitration journal.

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Fiji’s International Arbitration Act 2017

On 15 September 2017,Fiji passed the International Arbitration Act 2017 (the Act). The Act, which is based on the United Nations Commission on International Trade Law on International Commercial Arbitration 1985 (incorporating the 2006 amendments) (Model Law), implements Fiji’s commitments under the Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), which Fiji ratified on 27 September 2010. It also adopts some elements of “best practice” from the laws of other leading pro-arbitration jurisdictions, including Australia, Singapore and Hong Kong. The Act not only represents an important piece of law reform for Fiji but it is also hoped that it will provide the impetus and framework for similar law reform among other Pacific Island States.

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ITLOS rules in favour of Ghana in long-standing maritime dispute with Côte d’Ivoire

On 23 September 2017, a Special Chamber of the International Tribunal for the Law of the Sea (ITLOS) delivered its judgment on the longstanding maritime boundary dispute between Ghana and Côte d’Ivoire.

The Special Chamber reconfirmed the relevance of the equidistance methodology in determining the maritime boundary between the two States. The judgment also touches on important issues affecting States and international companies operating in disputed waters such as the applicable obligations pending resolution of such disputes.
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Filed under Africa, Awards, Boundaries and Delimitation, Public International Law, UNCLOS

Parallel court and arbitration proceedings: English High Court grapples with further case management issues in Panama Canal dispute, clarifying that service of a defence pending appeal on refusal to grant a stay will not constitute “a step towards answering the substantive claim”

In our previous blog post on Autoridad del Canal de Panama v Sacyr, S.A. & Ors, we considered a failed application to stay English court proceedings brought in a dispute in which related ICC arbitration proceedings are also on foot. In a subsequent judgment, the English Court considered further the practical implications of the parallel proceedings. The Court rejected the Consortium’s application for permission to appeal the decision refusing to grant a stay under s9 of the Arbitration Act 1996 and refused to stay the proceedings pending an application to the Court of Appeal for permission to appeal.  In so doing, the Court held that service of a defence in the proceedings by the Consortium would not constitute a “step […] to answer the substantive claim” within the meaning of s9(3) of the Act which would deprive the Court of Appeal of its jurisdiction to grant a stay on appeal. Consequently, it allowed the proceedings to proceed pending the review by the Court of Appeal of the Consortium’s application for permission to appeal.

Autoridad del Canal de Panama v Sacyr, S.A and Others [2017] EWHC 2337 (Comm) Continue reading

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Filed under Arbitration Act 1996, Arbitration proceedings, Europe, Stays

GAR Guide to Construction Arbitration now available to download, including chapter on “Construction Arbitration and Turnkey Projects” by HSF’s James Doe, David Nitek and Michael Mendelblat

London-based Construction & Infrastructure Disputes partners James Doe and David Nitek, along with Professional Support Lawyer Michael Mendelblat, have authored a chapter in the first edition of Global Arbitration Review’s Guide to Construction Arbitration.

The new guide takes the reader through the essential details of preparing, mitigating and managing construction disputes internationally. From preparing contracts and guarantees, to setting up dispute boards, organising proceedings in arbitrations, analysing documents and evidence and navigating within particular industries and regions.
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Filed under Construction, Publications and Guides

China proposes dedicated “Belt and Road” court

Supreme People’s Court Monitor has published a highly informative article on proposals by the SPC relating to China’s”Belt and Road” initiative. These include establishing a dedicated court, along the lines of the Singapore International Commercial Court, to hear Belt & Road disputes. Click here to read the piece.

Our thanks to Susan Finder of SPC Monitor for permission to re-publish.

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Filed under Asia, Court intervention, DIFC, East Asia, Hong Kong & China, Uncategorized

Paris court rejects application for review and withdrawal of arbitral enforcement order, despite allegations of fraud

The Paris Court of First Instance has rejected an application for the review and withdrawal of an enforcement order of an arbitral award, despite allegations of fraud and collusion between the arbitrator and the claimant. It also refused to the state’s request to stay enforcement proceedings until the issuance of a decision in proceedings appealing the arbitral award before the Common Court of Justice and Arbitration.

The case demonstrates the deference given to international arbitral awards by French courts in enforcement proceedings and the limited ability of the courts to review the underlying award. It also reiterates that, as a matter of principle, the only recourse available against an order granting enforcement of a foreign award is an appeal on the grounds permitted under Article 1525 of the French Code of Civil Procedure (CPC). Courts will be restrictive in their interpretation of the CPC and any application for the review or withdrawal of an enforcement order of an international arbitral award is likely to fail. A party will have no means of challenging the enforcement order, absent an appeal under Article 1525 of the CPC, even in cases where allegations of fraud and collusion have been made. (La République du Niger v Africard Co Ltd, Tribunal de grande instance de Paris, summary judgment (ordonnance de référé)).

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Filed under Arbitration laws, Awards, Enforcement, Enforcement - Europe, Europe

Environmental and Human Rights issues in Africa have international implications – know what rights and remedies apply

In the first of our regular Africa themed webinars, on Thursday 5 October 2017, 1.00 – 2.00pm BST, we will consider the international implications of environmental and human rights issues in Africa, including:

  • The extraterritorial impacts of a local crisis: international treaty claims and the growing trend of class actions
  • To stay or to go: the risks of exit vs. remaining in-country following a crisis
  • The importance of investment structuring to maximise protection
  • Relying on treaty rights in Africa if things go wrong
  • Preventing and managing crises in Africa

Speakers

John Ogilvie, Partner, Dispute Resolution, London

Andrew Cannon, Partner, International Arbitration, Paris

Laurence Franc-Menget, Of Counsel, International Arbitration, Paris

To register for the webinar, please contact Jane Webber. Continue reading

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Filed under Africa, Events, International Human Rights, Investment Arbitration, webinar

PRC signs the Hague Convention on Choice of Court Agreements: a step forward in the resolution of cross-border litigation

On 12 September 2017, the People’s Republic of China (PRC) signed the Hague Convention on Choice of Court Agreements (Convention).  The Convention, in force since 1 October 2015, seeks to provide certainty in cross-border litigation by allowing parties to choose the exclusive court in which any disputes arising under a commercial agreement will be resolved.  Courts of member states must accordingly respect exclusive jurisdiction clauses in commercial agreements by staying proceedings in favour of the courts of other member states. They must also recognise and enforce judgments of the courts of other member states, subject to certain limited exceptions.

The PRC needs to ratify the Convention before it becomes a member state and bound by the terms of the Convention.  Once the PRC formally joins the Convention, there will be increased opportunities for the recognition of Chinese court judgments internationally and vice versa.

The current status of the Convention

The Convention currently has three parties: Mexico, the European Union and Singapore.  The Convention binds all EU member states except Denmark by virtue of the EU’s approval.  The United States of America and Ukraine have also signed the Convention but have not ratified it.

The Chinese Ministry of Foreign Affairs announced, on the same day as the PRC signed the Convention, that the PRC would “study the approval of the Convention as a priority, so that the Convention can become effective for the PRC as soon as possible“.  It appears likely, therefore, that the PRC will ratify and become a party to the Convention in the near future.

Key features of the Convention

In terms of scope, the Convention only applies to exclusive choice of court agreements, as defined in Article 3.  However, a forum selection clause which meets the defined criteria, but is silent as to whether the jurisdiction of the chosen court is exclusive, will be deemed to be an exclusive choice of court agreement and fall within the scope of the Convention.  It is important to note that the Convention does not cover non-exclusive or “one-way-exclusive” choice of court clauses (where one party is limited to the exclusive court jurisdiction of an agreed country should it bring an action, but the other party enjoys a wider flexibility).  Such choice of court agreements are outside the scope of the Convention and will need to be addressed by national laws, regional regulations or other international treaties.

The application of the Convention is also subject to a number of exceptions. For example, employment contracts and rights in rem over immovable property are excluded. Further, it does not apply to arbitration or related proceedings, or to interim relief.

The key provisions of the Convention are:

  • Article 5, which provides that a court chosen in an exclusive choice of court agreement must hear the case (save for in limited circumstances).
  • Article 6, which provides that a court seised of a matter in relation to which an exclusive choice of court agreement applies, must stay or dismiss proceedings (subject to a limited number of exceptions).
  • Article 8, which provides that the courts of member states are obliged to recognise and enforce a final judgment of the court of another member state named in an exclusive choice of court agreement without review of the merits (subject to a limited number of grounds for refusal of recognition and enforcement).

The Convention applies to “international cases”. The definition of international is based on the circumstances of the case – the default position is that the case is international unless the parties are resident in the same member state and the relationship of the parties and all other elements relevant to the dispute, regardless of the location of the chosen court, are connected only with that state.

Recognition and enforcement of judgements – comparative view with New York Convention

The courts of a member state are obliged to recognise and enforce a final judgment of the court of another member state designated in an exclusive choice of court agreement without review of the merits.  The limited grounds on which an enforcing court can refuse enforcement are exhaustively set out in Article 9 of the Convention.  The grounds are mostly procedural in nature.  Notably, contravention of public policy is one ground of refusal.  Critics worry that this ground is open to abuse in some states.

For commercial parties involved in international transactions, the benefits of the Convention will very much depend on it achieving broad acceptance at a similar level to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, which has been ratified or acceded to by 157 countries.  The UK government has indicated its intention to join the Convention as an individual state as soon as it is free to do so post-Brexit. A vast number of countries have no treaty obligation to dismiss or stay the proceeding when a dispute is submitted to its court, even if parties have exclusively opted for the court of a different country.  When it comes to the recognition and enforcement of judgments, sparsity of member states is also a challenge for the winning party.

Applicable to Hong Kong?

International treaties acceded to by the PRC are not automatically binding on Hong Kong.  The PRC Central Government must seek the view of the Hong Kong Government, before deciding whether the treaty is applicable to Hong Kong (pursuant to Article 153 of Hong Kong’s Basic Law).  At this stage, there is no indication of the Central Government having done so in relation to the Convention.

It is worth noting that the mutual recognition and enforcement of judgments between Hong Kong and Mainland China is not governed by international treaties, but by a special arrangement between the two regions. Since 2008, a judgment obtained in Hong Kong is enforceable in the PRC and vice versa under An Arrangement on Reciprocal Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region pursuant to Choice of Court Agreements between Parties Concerned (Arrangement).  As it currently stands, only final monetary judgments where the court assumes the jurisdiction by virtue of an exclusive choice of court agreement can be enforced under the Arrangement.

From an international perspective, Hong Kong has a statutory registration scheme for the recognition and enforcement of foreign judgments made in 15 designated countries, under the Foreign Judgments (Reciprocal Enforcement) Ordinance (Cap 319). Foreign judgments other than those qualifying for enforcement under that Ordinance, including those from important trading partners such as the UK and the US, can however only be enforced in Hong Kong under common law, which entails issuing fresh proceedings in Hong Kong based on the foreign judgment.  The mechanisms currently in place in Hong Kong will continue to operate, pending any decision by Hong Kong and the PRC on the applicability of the Convention to Hong Kong in future.

Practical implications for international parties dealing with Chinese parties vice versa

The Convention, if and when ratified by the PRC, will provide an important new option of dispute resolution in litigation – alongside international arbitration – for international parties dealing with Chinese parties and vice versa.  For many types of commercial contracts (subject to exceptions mentioned above) where parties can agree on an exclusive choice of court, the Convention may prove to be a useful instrument to ensure certainty and speed in commencing and resolving disputes.

For further information, please contact Gareth Thomas, Dominic Geiser, Rachel Yu or any of your usual contacts at Herbert Smith Freehills.

Gareth Thomas
Gareth Thomas
Partner, Head of commercial litigation
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+852 2101 4025
Dominic Geiser
Dominic Geiser
Partner
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+852 2101 4629
Rachel Yu
Rachel Yu
Senior Associate
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+852 2101 4220

 

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