Astro prevails again against First Media (Lippo) in Hong Kong

In the long running Astro/First Media (also known as Lippo) enforcement dispute, First Media has failed to obtain leave to appeal to the Court of Final Appeal in Hong Kong in respect of First Media's recent loss in the Court of Appeal (Astro v First Media CACV 272/2015).  As a result, First Media must pay to Astro sums due under five Singapore arbitration awards.  Having failed to obtain leave from the Court of Appeal on 29 March 2017, it is not yet known whether First Media will seek leave to appeal directly from the Court of Final Appeal.

The Astro/First Media enforcement dispute will be familiar to arbitration practitioners in Asia.  In proceedings that went to the Singapore Court of Appeal, First Media (Lippo) successfully resisted enforcement of five adverse arbitration awards on the grounds that they had been made without jurisdiction (see our blog post here).  The issue in the Singapore appeal was whether First Media was entitled to resist enforcement on jurisdictional grounds (the "passive remedy") in circumstances where it had not sought to set aside the Tribunal's award establishing jurisdiction within the time allowed (the "active remedy").  The Court of Appeal concluded that in Singapore award-debtors have a free choice between the active and passive remedies:  having lost on jurisdiction, an award debtor may choose to fight the arbitration and then decide whether to resist enforcement having seen the outcome.

Astro also enforced the awards in Hong Kong, where it has enjoyed more success (see our blog post on the Court of First Instance Decision here, and on the Court of Appeal decision here).  First Media initially chose not to resist enforcement in Hong Kong, in the belief (which later turned out to be wrong) that First Media had no assets in the jurisdiction.  When First Media eventually sought to set aside the court orders allowing enforcement of the awards, the less controversial issue for decision was whether First Media was entitled to an extension of time to resist enforcement.  The Court of First Instance decided that no extension of time should be granted, and the Court of Appeal agreed.  The 14 day period allowed for resisting enforcement had expired; First Media was fourteen months too late.  These judgments serve as an important reminder to award-debtors that they must resist enforcement within the time allowed by Hong Kong law. 

The more controversial issue in the Hong Kong proceedings was whether First Media was precluded by the principle of good faith from relying on its argument (that had been accepted in Singapore) that the tribunal lacked jurisdiction to make the awards.  The Court of First Instance concluded that First Media lacked good faith as a result of its choice to wait and exercise its passive remedy, rather than exercise its active remedy in the time allowed.  This conclusion was criticized by some commentators on the basis that Singapore law expressly allows a free choice between the active and passive remedies, and the Singapore courts had concluded that First Media had effectively and expressly reserved its right to resist enforcement when the time came.  The Court of Appeal sided with the critics and overturned the first instance judge on the application of the good faith principle.  However, this made no difference to the ultimate outcome (because of the court's conclusion that First Media was too late to resist enforcement).

May Tai
May Tai
Partner
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+852 2101 4031
Tomas Furlong
Tomas Furlong
Senior Associate
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+852 2101 4207

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Filed under Asia, Challenges to awards, Enforcement, Hong Kong & China, Jurisdiction

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