Hong Kong judge defers to arbitration in dismissing winding up petition

In a recent Court of First Instance case before Harris J, Southwest Pacific Bauxite (HK) Ltd (Company) sought to strike out a winding-up petition issued against it by Lasmos Ltd (Petitioner). The ground of insolvency relied on by the Petitioner was a statutory demand of US$259,700.48 (Debt), arising out of a management services agreement (MSA) between the Company and the Petitioner (Parties). The Company disputed the Debt.

The issue in this case was the impact of the arbitration clause in the MSA on the exercise of the court’s discretion to make a winding-up order.
Lasmos Ltd v Southwest Pacific Bauxite (HK) Ltd [2018] HKCFI 426

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Recent developments in India-related international arbitration

Herbert Smith Freehills has issued the latest edition of its Indian international arbitration e-bulletin. In this issue we will consider Indian court decisions, including the arbitrability of allegations of fraud and non-arbitrability of trust disputes by the Supreme Court. We have also considered various decisions in which the Delhi High court shows restraint in relation to interfering with offshore arbitrations, while also making decisions that demonstrate the observance of formalities by the court which could be construed as not pro-arbitration, including refusing to enforce an arbitration clause in an unsigned agreement. In other news, we consider the rise of institutional arbitration in India and India-related bilateral investment treaty news. Further, we discuss the imminent launch of a new edition of our Guide on India-Related Contracts Dispute Resolution.

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Hong Kong confirms IP rights are arbitrable

Hong Kong has now enacted amendments to its Arbitration Ordinance (Cap. 609), clarifying that disputes over intellectual property rights (IPRs) may be resolved by arbitration and that it is not contrary to Hong Kong public policy to enforce arbitral awards involving IPRs.

The bill effecting the amendments, Arbitration (Amendment) Bill 2016 (Bill), was first introduced in December 2016 and was passed in substantially the same form on 14 June 2017. For more detail, see our previous blog post containing a summary of the main provisions of the Bill here. The amendments are due to come into operation on 1 October 2017.

This is a positive development that should progress the Hong Kong Government's stated aim of achieving an edge over other jurisdictions in the Asia-Pacific region as a venue for settling IPR disputes.

Arbitrability of fraud in India

The decision of the Indian Supreme Court in Swiss Timing Limited v Organising Committee, 2010 Olympic Games, Delhi[1] ("Swiss Timing") last year seemingly settled the legal position on whether claims involving allegations of fraud are arbitrable in India. The Supreme Court in Swiss Timing overruled the previous leading Supreme Court authority, N Radhakrishnan v Maestro Engineering[2] ("Radhakrishnan"), to hold that fraud allegations are capable of being adjudicated by arbitral tribunals. However, a number of recent Indian High Court decisions have taken apparently conflicting approaches to the issue and have raised questions on the authority of Swiss Timing to effectively overrule Radhakrishnan. The vexed question of arbitrability of fraud has thus been brought back to the forefront of Indian arbitration law.

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Singapore Court of Appeal provides guidance on applications to stay proceedings in favour of arbitration and scope of arbitrability

In Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2015] SGCA 57, a distinguished panel of the Singapore Court of Appeal considered an application to stay court proceedings in favour of arbitration under section 6 of the Singapore International Arbitration Act ("IAA"). They confirmed the appropriate standard of review to be adopted in respect of the existence and scope of the arbitration agreement as a prima facie standard.  The Court of Appeal also provided guidance on determining whether the subject matter of a claim is arbitrable or not, holding that minority shareholder claims under s.216 of the Companies Act (Cap 50, 2006) are arbitrable.  Finally, the Court of Appeal demonstrated flexibility in exercising its case management powers to regulate the conduct of court proceedings involving multiple parties, not all of whom are party to the arbitration agreement.

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