Delhi High Court rules that third party funder has no liability to pay costs award against a losing funded party

In the recent case of Tomorrow Sales Agency Ltd v SBS Holdings Inc, a Division Bench of the Delhi High Court has refused to hold a third party funder liable for an adverse award. The Court has ruled that a third party funder which was not a party to an arbitration agreement, or the arbitral proceedings, or a party to the resultant arbitral award, could not be “mulcted with liability, which they have neither undertaken nor are aware of“.

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FULLY VIRTUAL HEARING NOT A GROUND TO REFUSE ENFORCEMENT, HONG KONG COURT RULES

The Hong Kong Court of First Instance has ruled that the holding of a fully virtual hearing despite the opposition of one of the parties did not provide a permissible ground to resist enforcement of an award (Sky Power Construction Engineering Limited v Iraero Airlines JSC [2023] HKCFI 1558).

Although the case was decided on its specific facts, the court emphasised the deference which should be shown to the arbitrator’s wide discretion to determine the procedure in the absence of party agreement.  The decision also suggested an acceptance in principle of the use of virtual hearings in a post-pandemic world, where appropriate in the circumstances of a particular case.  It therefore provides a helpful indication of the way in which the Hong Kong courts might approach challenges to awards based on virtual hearings in future cases.

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OVER-SHARING ON SOCIAL MEDIA LEADS TO LOSS OF ARBITRAL CONFIDENTIALITY IN SINGAPORE

The Singapore Court of Appeal has refused confidentiality orders in relation to arbitration enforcement proceedings because the confidentiality of the underlying arbitration had already been lost. The court relied on the publication of the underlying award online and in foreign enforcement proceedings, and press coverage of the Singapore proceedings that had been “effectively confirmed” when posted to LinkedIn by lawyers (acting for India, which had been trying to obtain the confidentiality orders).

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HONG KONG COURT GRANTS ANTI-ARBITRATION INJUNCTION TO PROTECT ENFORCEMENT OF PRIOR AWARD

The Hong Kong Court of First Instance (“CFI“) has taken the rare step of granting an anti-arbitration injunction to restrain claims which sought to undermine the enforcement in Hong Kong of a prior arbitral award (廈門新景地集團有限公司 formerly known as 廈門市鑫新景地房地產有限公司 v. Eton Properties Ltd and Another [2023] HKCFI 1327).

The decision is the latest in the long-running proceedings between Xiamen Xinjingdi Group Co Ltd (“XJ“) and Eton Properties Limited and others (together “EP“), which have been addressed in three of our previous blog posts (see here, here and here).

In the most recent proceedings, XJ (the award creditor) applied for an anti-arbitration injunction to restrain a new Mainland PRC-seated CIETAC arbitration commenced by EP (the award debtor).

The CFI refused to grant a blanket injunction restraining the arbitration in its entirety, even though there were good grounds to find that the arbitration was vexatious, oppressive and abusive. This was because certain claims being advanced for the first time in the new arbitration (which had not been determined or foreclosed by the findings of previous tribunals or courts) fell within the scope of the arbitration agreement.

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HONG KONG COURT REFUSES LEAVE TO APPEAL RARE SUCCESSFUL CHALLENGE TO AWARD

The Hong Kong Court of First Instance has rejected an attempt by an award creditor to appeal against a rare successful challenge to an arbitral award.

In CIC v Wu and Ors [2023] HKCFI 700, Mimmie Chan J had refused to enforce the award because the “grossly unfair and unjust” procedure adopted by the tribunal amounted to an egregious denial of due process (see our previous blog post for further details).  The decision arose from unusual facts and illustrated the readiness of the Hong Kong courts to intervene to prevent injustice in truly exceptional cases.

The Court has now refused leave to appeal that ruling on the ground that an appeal would have no reasonable prospects of success (CIC v Wu and Ors [2023] HKCFI 1055).

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Commercial Court releases its arbitration statistics: significant increase in arbitration-related applications

The Judiciary of England and Wales has published the Commercial Court Report for the year 2021-2022 (the Report). These reports are released annually to give an overview of the courts’ work and decision-making. For arbitration practitioners, they also provide insight into the number of applications made before the English court to challenge arbitral awards and how these applications are resolved. This year, the Commercial Court has reported a significant increase in arbitration-related applications, reflecting London’s continued status as an important centre for international arbitration.

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MALAYSIAN COURT RECONFIRMS THAT TRIBUNALS TAKE PRIORITY OVER COURTS WHEN GRANTING INTERIM RELIEF

The Malaysian High Court has reconfirmed that if the same interim relief can be granted by an arbitral tribunal and the courts, a party should first apply to the tribunal. The decision in Malaysia Resources Corporation Bhd v Desaru Peace Holdings Club Sdn Bhd [2022] MLJU 3355 is significant for arbitrations with a Malaysian nexus as parties should prioritise tribunal-ordered interim relief in their case strategy where possible.  This case demonstrates that should a party fail to approach its tribunal in the first instance, the Malaysian courts would generally be reluctant to grant the interim relief sought, resulting in wasted costs.

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AUSTRALIAN FEDERAL COURT REAFFIRMS HIGH THRESHOLD FOR REFUSING ENFORCEMENT OF AWARD ON PUBLIC POLICY GROUNDS

In a recent application to enforce an arbitral award, the Federal Court of Australia rejected the award debtor’s arguments that it would be contrary to public policy to enforce the award, where allegations of procedural unfairness had already been determined in foreign courts.  In doing so, the Court reaffirmed the high threshold required for an Australian court to refuse enforcing a foreign arbitral award on public policy grounds, and the importance of international harmony and concordance of approach.

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