HONG KONG COURT OF APPEAL: COMMON LAW ACTIONS AVAILABLE TO ENFORCE ARBITRAL AWARDS

Two key developments emerge from the long-running proceedings in Xiamen Xinjingdi Group Co Ltd v Eton Properties Ltd [2016] 2 HKLRD 1106 and Xiamen Xinjingdi Group Co Ltd v Eton Properties [2018] HKCFI 910. The Hong Kong Court of Appeal (CA) has held that, when parties enter into an arbitration agreement, they make an implied promise that they will honour the terms of any subsequent arbitral award. If one party fails to honour the award, this may give rise to a separate cause of action at common law, for which the Hong Kong courts have jurisdiction to grant a full range of remedies, including damages. These proceedings also confirm that the Hong Kong Court of First Instance (CFI) has statutory powers to stay proceedings before it, pending the determination of an application for leave to appeal to the higher courts. Continue reading

Astro v Lippo: First Media appeal succeeds in Hong Kong

At its final attempt, First Media has overturned the Hong Kong courts’ earlier decisions to enforce five arbitral awards against it.

In a judgment dated 11 April, the Hong Kong Court of Final Appeal (CFA) unanimously allowed First Media’s appeal, set aside the orders of the courts below, and extended time for First Media to apply for leave to set aside the orders granting Astro leave to enforce the awards in Hong Kong.

This is a long-awaited victory for First Media, which has always maintained that the awards were made without jurisdiction, despite its decision not to apply to set aside the tribunal’s award on jurisdiction. However, it is not the final hurdle. First Media must now convince the Court of First Instance, as the enforcing court, to accept its jurisdictional objection and set aside the enforcement orders, while Astro will certainly resist.

Astro Nusantara International B.V. and Others v. PT First Media TBK [2018] HKCFA 12; FACV 14/2017 (11 April 2018) Continue reading

Hong Kong Court upholds refusal to stay execution of enforcement order

Overview

The Hong Kong Court of First Instance (CFI) has denied leave to appeal its May 2017 decision in Israel Sorin (IZZY) Shohat v Balram Chainrai [2017] HKEC 1118. In that decision (see our previous post), Chow J refused to stay execution of the CFI’s order to enforce an arbitral award pending the outcome of the Award Debtor (Mr Shohat)’s claim against Mr Chainrai (Award Creditor) in the Hong Kong High Court (High Court Action).

On 21 July 2017, the Award Debtor applied for leave to appeal Chow J’s decision (Leave Application), and for an interim stay of execution of the enforcement order pending the outcome of its application for leave to appeal (Stay Application).  The court also considered an application by the Award Creditor for payment out of monies that the Award Debtor had paid into court in partial satisfaction of the award (Payment Out Application).

The Court dismissed the Leave and Stay Applications. It granted the Payment Out Application, subject to a 14-day delay to allow for any further application for leave to appeal and interim stay pending appeal.

Continue reading

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.

Continue reading

Astro v Lippo: First Media’s Hong Kong appeal dismissed

Hong Kong's Court of Appeal (CA) has given judgment in the latest instalment of the dispute between Malaysia's Astro media group and Indonesia's Lippo.

On 5 December 2016, the CA dismissed an appeal by First Media, a Lippo Group entity, against an order granting leave to enforce in Hong Kong various arbitral awards made in Singapore in favour of Astro. First Media succeeded in overturning one limb of the first instance decision, in which Chow J held it had breached the principle of good faith by participating in the arbitration (albeit under protest) and then raising objections to jurisdiction at the enforcement stage. However, First Media failed to persuade the CA that its application to set aside the enforcement order should succeed despite having been made fourteen months out of time.

The decision brings Hong Kong law into line with Singapore on parties' right to elect "active" or "passive" remedies in arbitral proceedings. However, the principle that arbitrations should be resolved with "speedy finality" prevailed, and the CA declined to interfere with the judge's refusal to extend time for the application to set aside the enforcement order in Hong Kong.

Continue reading