Hong Kong courts hand down significant arbitration-related decisions

The CFI upheld a partial award pursuant to which an "experienced tribunal" dismissed the claims of a Hong Kong-incorporated claimant in their entirety pursuant to the early determination procedure in Article 43 of the 2018 HKIAC Rules (A v. B1 and B2 [2026] HKCFI 2444). 

Background

• The underlying arbitration arose from a merger agreement and sale and purchase agreement under which two Cayman special purpose vehicles acquired corporate vehicles holding real estate assets from the Hong Kong company.  The dispute focused on whether certain "Holdback Amounts" were payable by the Cayman purchasers to the Hong Kong seller when the relevant conditions precedent had not all been satisfied or waived by the long-stop date (which the purchasers had refused to extend).
• The Hong Kong seller commenced arbitration claiming the Holdback Amounts, arguing that the agreements did not entitle the Cayman purchasers to retain those sums and that the refusal to extend time was unreasonable, arbitrary, capricious and in bad faith.

The early determination procedure

• After the seller had served its statement of claim, the purchasers applied for early determination on the basis that the seller's case was manifestly without merit and that, even assuming its case to be correct, no award could be rendered in its favour.  
• The early determination procedure under Article 43 (which the court described as "in substance akin, but not identical, to an application for summary judgment under the court procedures") permits the early determination of points of law or fact that are manifestly without merit, outside the jurisdiction of the tribunal, or incapable of supporting an award even if assumed correct.  It involves a two-stage process: a "screening" stage to determine if the application should be allowed to proceed (on which the tribunal must rule within 30 days of the application); and (if so) a determination stage (following which the tribunal must make its order or award, which may be in summary form, within 60 days of its decision to proceed).
• In the screening stage, the tribunal received written submissions from both parties on the early determination application and conducted a 2-hour virtual hearing, following which it ruled that the early determination application should proceed and the arbitration be stayed pending the determination of the application. 
• The tribunal issued a partial award dismissing the seller's claims with prejudice, finding the agreements to be unambiguous and the seller's claims to be patently unmeritorious.  It stated that it was mindful of the high standard that should apply to early determination applications, and that, although the award was issued in summary form pursuant to Article 43.6 of the 2018 HKIAC Rules, the tribunal had applied a high level of scrutiny and rigorous standard to determine whether the seller's claims were manifestly without merit.  The court later described the tribunal as having "assiduously" set out the seller's position in the award. 

Application to set aside early determination award

• The seller applied to set aside the partial award on the grounds that it had been denied a fair opportunity to present its case, the tribunal had failed to comply with Article 43 of the HKIAC Rules and had exceeded its jurisdiction by disposing of the issue around the purchasers' refusal to extend the long-stop date, and the award was in conflict with public policy.
• The seller's central complaint was that the early determination application had not identified the points of law or fact to be determined, contrary to the requirements of Article 43, and amounted to an impermissible invitation to the tribunal to conduct a "mini-trial over the entire case" of the seller. 

Decision 

• The court rejected that argument, holding that even though the application was lengthy (20 pages) and could have been more concise, the relevant points of law or fact had been plainly identified.  It also held that Article 43 does not prescribe a fixed level of precision for identifying points of law or fact, and that the degree of precision is a matter of case management within the tribunal’s discretion.
• The court treated the tribunal's screening-stage decision to proceed with the early determination application as a procedural or case-management decision, not a decision requiring detailed reasons.  As to the determination stage, the seller had been permitted to file final submissions and those submissions showed that it understood and addressed the relevant points, with no suggestion that it had any difficulties in identifying the relevant points. 
• The court accepted that the purchasers had not proposed a form of early determination procedure for adoption by the tribunal, in breach of Article 43.4(c) of the HKIAC Rules, and had not properly explained how that form would satisfy the HKIAC Rules' objectives around fairness and efficiency, but held that these were at most only minor and technical breaches.  There was no procedural unfairness, and the seller had clearly waived the technical breaches by participating in the process without contemporaneous objection.
• The court also rejected an argument by the seller that it had been stripped of procedural rights to discovery and a full oral hearing as provided in Procedural Order No. 1.  This was a "plainly bad point" because the seller had been given the opportunity to raise, and had raised, arguments on how the factual disputes made an early determination procedure inappropriate, which the tribunal had rejected.  There could be no entrenched rights to discovery and a full oral hearing, as the arbitration was stayed pending the resolution of the early determination application, and the seller's claims were ultimately dismissed in the partial award. 
• The challenge to the award was therefore rejected, with indemnity costs awarded against the seller. 

Comment 

• The HKIAC's early determination procedure was introduced in 2018, with statistics published by the institution showing that 21 early determination applications had been submitted up to the end of 2025.  Of those applications, six passed the screening stage and went on to be determined by tribunals.  Successful applications for the early determination to apply are therefore relatively rare. 
• Against that backdrop, the decision is a welcome indication of the readiness of the Hong Kong courts to support early determination procedures and uphold rulings rendered pursuant to them. 
• It also provides helpful confirmation that: (i) early determination procedures can validly be used to dispose of the entire case of a party in appropriate circumstances, not only a discrete part of its case; (ii) the courts will look to substance over form when assessing compliance with applicable requirements of early determination processes (such as those set out in Article 43 of the HKIAC Rules), and are unlikely to uphold challenges based on  minor and technical breaches; and (iii) a tribunal's decision at the "screening" stage to hear an application for early determination will be treated as a case management decision which does not require reasons and with which the court will only interfere in extreme circumstances. 

The CFI rejected a challenge to an HKIAC costs award advanced on the basis that the winning party's costs submissions had not stated the number of hours incurred by each fee earner and the tribunal had applied a "wholly arbitrary" discount to those costs (A v. B1 and B2 [2026] HKCFI 2444, also discussed above in relation to early determination).  The court held that the tribunal had been perfectly entitled to take a broad-brush approach informed by the complexity of the issues, the amount at stake and the tribunal's collective experience.

• The award debtor contended that it had been unable to present its case on the quantum of the costs claimed and that the tribunal had failed to comply with its duty to allow only costs that were reasonable and had applied a "wholly arbitrary" discount to the final amount awarded.
• The costs submissions provided by the winning party (characterised by the tribunal as a "detailed breakdown") had stated the total costs, the names and hourly rates of the nine fee earners involved, and the time periods during which each fee earner was involved in the case, but had not included the number of hours incurred by each fee earner, either in total or during each phase. 
• The tribunal had rejected the award debtor's submissions that a further breakdown of fees for each stage of the proceedings and each fee earner was necessary, holding that this was inconsistent with well-established practice in international commercial arbitration.  Taking into account all the circumstances and its "collective experience" in determining reasonable costs in numerous international arbitrations, the tribunal had gone on to exercise its discretion on costs to order the award debtor to pay a certain proportion of the winning party's costs plus interest (with the proportion being redacted in the court's decision).
• In upholding the costs award and rejecting the challenge, the court made three core points.
• First, the award debtor had been able to make submissions criticising the hourly rates, staffing and alleged excessiveness of the costs, and could have (but had not) argued that the award creditor's case on costs should not be believed, or that it had failed to discharge its burden of proof.
• Second, the award debtor's real complaint was that the tribunal should have conducted a more elaborate taxation process.  There was no prescribed mechanism for costs assessment in arbitration, however, and the tribunal was not obliged to follow the scales and practices adopted by the court on taxation of costs.  The tribunal had been perfectly entitled to take a broad-brush approach, assessing the reasonableness of the costs by reference to the complexity of the issues, the amount at stake and the tribunal's collective experience.
• Third, the award debtor's criticisms about the tribunal's alleged failure to discharge its duty to award only reasonable costs went to the merits of the tribunal's reasoning and decision, and were not valid grounds for setting aside the costs award.
• For these reasons, the court concluded that the award debtor had not been denied an opportunity to present its case on costs and there had been no failure by the tribunal to discharge its duty.  The challenge to the costs award was therefore dismissed.

The CFI dismissed an application by a Hong Kong company to set aside an HKIAC award made in favour of a Mainland PRC company pursuant to a contract for the sale and purchase of fuel oil (E v. N [2026] HKCFI 3293).

• The tribunal found that the Hong Kong company (the seller under the contract) had breached the contractual fuel oil specifications, and that the Mainland PRC company (the buyer) had validly terminated the contract and was entitled to damages.  The seller challenged the award on the grounds that (i) a Mainland PRC court decision created an issue estoppel depriving the tribunal of jurisdiction, (ii) the tribunal had failed to deal with the buyer's entitlement to terminate based on small deviations in the contractual specifications, and (iii) the termination finding was contrary to public policy. 
• Mimmie Chan J rejected all three arguments and awarded indemnity costs against the seller. 
• As to jurisdiction: (i) even if an issue estoppel existed, it would affect admissibility (i.e. whether the claim should be heard) which is generally a matter for the tribunal, or the merits of the claim, not the tribunal’s jurisdiction (applying C v. D); (ii) the arbitration clause should be construed commercially so that disputes under the contract would be resolved by one tribunal (applying Fiona Trust); (iii) the Mainland decision did not give rise to issue estoppel in any event, because it concerned alleged "guarantee fraud" by the seller, and did not determine whether it was in breach of contract; and (iv) the seller had unequivocally waived any jurisdictional objection on the basis of issue estoppel, because it had failed to raise it before the tribunal. 
• The judge also found that the tribunal had dealt with the buyer's entitlement to terminate based on small deviations in the contractual specifications, and that the public policy ground failed because it was at most an allegation that the tribunal had upheld the termination on the basis of trivial and de minimis deviations from the contractual specifications and was therefore wrong in law or fact, which was not a permissible ground to set aside the award.

The CFI dismissed a challenge by a Canadian bank to the enforcement of an LCIA award in favour of a Russian company after rejecting public policy arguments arising from the operation of Canadian sanctions (A Company v. The Bank [2026] HKCFI 3169).

• The award ordered the bank to pay approximately EUR30 million plus interest pursuant to three bank guarantees issued as security for third-party contractors' obligations under an engineering, technical services, goods-supply and works contract for a metallurgical plant in Russia.  The tribunal had ruled that, even if the relevant Canadian sanctions applied (which the bank had not established), they did not provide a contractual defence to the bank's payment obligations as a matter of English law. 
• Subsequently (after the enforcement proceedings and challenge to enforcement were underway), the relevant Canadian authorities confirmed that the sanctions did apply, and denied permission for the bank to transfer funds to the Russian company. 
• The core issue in the challenge was whether enforcement of the award would offend Hong Kong public policy because it would expose the bank or its staff to a real risk of criminal prosecution in Canada.  Mimmie Chan J was not persuaded that there was a real risk of actual prosecution, observing (amongst other things) that, if the judgment on the award were to be enforced by garnishee proceedings without active assistance from the bank, it was unclear why this would give rise to criminal liability on the part of the bank and its staff. 
• Even if there had been a real risk of prosecution, moreover, the judge indicated that she would have rejected the public policy challenge to enforcement.  The relevant public policy was not that of Canada but of Hong Kong, which was to be narrowly construed and favoured the recognition and enforcement of awards under the New York Convention.  The possibility of conflicting legal obligations was simply part of the "commercial realities and risks" of operating a banking business in different parts of the world.  It should not be contrary to public policy for the court to uphold the award merely because the bank would face contradictory obligations elsewhere, and the Canadian sanctions had no role to play in Hong Kong public policy. 
• Although the bank had made clear that it was prepared to offer undertakings to pay the amount due under the award as soon as it was lawfully able to do so, the court does not appear to have considered this relevant in light of the findings summarised above.  As a result of its unsuccessful challenge to the award, the bank was ordered to pay costs on the indemnity basis. 
• The decision is the latest of several recent arbitration-related judgments to address sanctions issues, following decisions in Linde v. RusChemAlliance [2023] HKCFI 2409 (reported here), Bank A v. Bank B [2024] HKCFI 2529 (reported here), which the court cited in the present decision, and RusChemAlliance v. Linde [2026] HKCA 763 (reported here) (all of which related to anti-suit injunctions).

The CFI dismissed a challenge to the enforcement of a Shenzhen Court of International Arbitration award based on a "novel" argument that the conduct of the award creditor bank in commencing arbitration was inconsistent with Mainland PRC and Hong Kong policy to support borrowers experiencing financial problems (Bank v. Guarantor & Others [2026] HKCFI 1818).

• The award debtor (a guarantor) had argued that guidelines issued by the Hong Kong Monetary Authority (HKMA) in 1999 exemplified this policy, and that it would therefore be contrary to public policy to enforce the award against it. 
• Mimmie Chan J held that there were "absolutely no grounds" to refuse enforcement of the award.  The HKMA guidelines provided voluntary, non-binding guidance, and the Mainland PRC policies (which were likewise only suggestive) did not apply in Hong Kong. 
• The court also dismissed arguments that enforcement of the award would facilitate or condone the bank's breach of Mainland foreign exchange control regulations and that the procedure of the arbitration had been defective because amicable discussions mandated by the arbitration agreement had not taken place (applying C v. D).

Two recent decisions highlighted legal risks in relation to settlement agreements concluded without authority.  In the first, summary judgment was granted against a signatory who had lacked authority to conclude an agreement which purported to settle an HKIAC arbitration (and which had been declared null and void in a previous decision).  In the second, enforcement of a BAC award was refused due to the lack of authority of a signatory to the settlement agreement which had given rise to the arbitration. 

Summary judgment granted for settling HKIAC arbitration without authority

• Summary judgment was granted against the former CEO and director of a cryptocurrency exchange for improperly settling and giving instructions to terminate an HKIAC arbitration involving a US$84 million claim against a "well-known cryptocurrency investor" (Liquidity Technologies v. Lamb & Others [2026] HKCFI 1758).
• The exchange argued that the former CEO and director had concluded the settlement agreement without authority, in breach of duty and despite having a conflict of interest.  
• The court found that the settlement was not in the best interests of the exchange, because (i) it caused the exchange to give up its claim for no apparent benefit, whereas the former CEO and director himself benefited from a waiver of liability, and (ii) it was contrary to the terms of a Scheme of Arrangement in the Seychelles, which the former CEO and director deposed before the Seychelles court was in the best interests of the exchange.  An argument that it had been in the best interests of the exchange to settle the arbitration due to lack of funding was rejected, because the Scheme of Arrangement provided for US$10 million for legal fees and operational expenses.  The former CEO and director had therefore failed to demonstrate a real or bona fide defence, and summary judgment was accordingly granted, with damages to be assessed.
• In a separate decision, the settlement agreement itself was declared to be null and void due to the lack of authority of the former CEO and director and because the other signatory to the settlement agreement had turned a "blind eye" to the "apparent impropriety of the highly suspicious" document (see LT v. RV [2026] HKCFI 1280, reported here).

Enforcement of BAC award refused due to settlement agreement signatory's lack of authority

• In a rare example of a successful award challenge, enforcement of a Beijing Arbitration Commission award was refused on public policy grounds because the individual award creditor had turned a "blind eye" to the lack of authority of the individual who had purported to sign, on behalf of the award debtor, the PRC law-governed settlement agreement pursuant to which the award was rendered (K v. JX [2026] HKCFI 2854).
• The settlement agreement had: compromised substantial claims advanced by the award debtor (a PRC company) in Hong Kong court proceedings against the award creditor and others (including claims that the award creditor and another party had misappropriated certain lands from the award debtor); included an unconditional admission that false allegations had been made by the award debtor in those proceedings; and required the award debtor to discontinue those proceedings. 
• In the subsequent arbitration, the tribunal found that there was no evidence that the purported signatory on behalf of the award debtor had actual authority to conclude the settlement agreement, but that there was reason for the award creditor to believe there had been due authorisation by the award debtor.  The tribunal therefore held that the settlement agreement was valid and binding on the award debtor.
• In the enforcement proceedings before the Hong Kong court, the award debtor argued that the settlement agreement had been procured by bribery and collusion, and that enforcement should be refused because the arbitration agreement was invalid, and on public policy grounds. 
• Mimmie Chan J rejected the jurisdictional argument because the award debtor had not challenged jurisdiction in the arbitration and had confirmed the tribunal’s jurisdiction and the validity of the arbitration clause.  The judge nevertheless went on to uphold the public policy objection.
• Although the tribunal had already decided that the settlement agreement was valid and binding, the evidence of bribery and collusion had only emerged after the arbitration and had not been considered by the tribunal.  The court therefore held that it was able to, and should, consider those allegations.
• The court noted that the settled matters were exceptional and extraordinary matters requiring proper authorisation.  The purported signatory on behalf of the award debtor was not properly authorised as a matter of PRC law, and the award creditor and its signatory had made no attempt to verify his authority and had no reason to believe that he had authority. 
• It would therefore be grossly unjust and shocking to the court's conscience to enforce the award giving effect to the settlement agreement and requiring the award debtor to discontinue the Hong Kong court proceedings seeking to recover the lands allegedly misappropriated from him.  If the award creditor had a good answer to the claims made against him in those proceedings, it could be fully ventilated before the court and he could be vindicated by the judgment of the court.

Comment 

• Taken together, the decisions indicate that, where arbitrations have been improperly settled without authority, the Hong Kong courts may be ready in appropriate circumstances to set aside settlement agreements, uphold challenges to awards rendered pursuant to them, and grant relief against relevant signatories. 
• They also serve as a reminder that a counterparty to a settlement agreement may have a duty to enquire as to the authority of the purported signatory for the other side in certain circumstances (especially where the terms are unusual or obviously against the interests of the other side), and that a failure to do so may result in the settlement unravelling. 

The CFI made clear that an HKIAC emergency arbitration award granting interim measures could not be challenged on the same grounds as a final award (W v. GH [2026] HKCFI 2966).

• Although the award debtor ultimately withdrew its challenge to the enforcement of the emergency arbitration award, the court took the opportunity in its decision to revisit the distinction between final awards (which can be challenged before the courts, albeit on limited grounds) and interim orders (which the courts generally cannot interfere with), which had previously been addressed in G v. N [2024] HKCFI 721 (reported here) and W v. Contractor [2024] HKCFI 1452 (reported here).
• Mimmie Chan J observed that it was clear that the orders did not finally determine any issues in the arbitration, but were intended and expressed to be "interim" only, and had been granted to maintain the status quo during the pendency of the arbitration.  They could not, therefore, be challenged on the grounds for setting aside or refusing enforcement of awards.
• The judge noted that it might be possible for the court to refuse enforcement of an emergency arbitration award if it was clear that there was not even a prima facie case of the existence of an arbitration agreement between the parties.  The prima facie threshold was not high, however, and unless the matter was clear, the court should accept that, prima facie, the emergency arbitrator had jurisdiction and could decide on its own competence to grant the emergency award sought (drawing an analogy with the threshold for stays of court proceedings in favour of arbitration).
• The court nevertheless ultimately held that it would be fair to stay the proceedings for the enforcement of the emergency arbitration award pending the determination of an application by the award debtor to the main tribunal for the discharge of the emergency arbitration award.  Although the delay occasioned by the stay was undesirable, it was fair in the circumstances, because the award debtor would suffer prejudice if the discharge application was ultimately successful but the award creditor had been permitted in the interim to enforce the emergency arbitration award.

The CFI rejected an application by a defendant to Hong Kong court proceedings for specific discovery of materials from an ICC arbitration between the claimant and certain third parties to the court litigation, with arbitral confidentiality being an important factor in the court's decision (National Petrochemical Industrial Company v. ERM [2026] HKCFI 2948).

Background

• Both the ICC arbitration and the Hong Kong court proceedings arose out of an explosion at the claimant's integrated propane dehydrogenation and polypropylene plant in Saudi Arabia in 2018, which had caused death and injury to persons and serious damage to the plant. 
• Certain of the third parties to the court proceedings had designed and built the plant, while the defendant to the court proceedings had provided chairman and secretary services to one of the third parties for a hazard and operability study of the plant (without any contractual relationship with the claimant).
• In the arbitration (which was commenced by the claimant pursuant to an arbitration clause in an "umbrella agreement" referred to in the contracts for the construction of the plant), the claimant sought US$350 million (later reduced to US$80 million) in damages in breach of contract and negligence from the third parties in respect of the explosion.  The arbitration resulted in an award rejecting the claimant's claims against the third parties in their entirety.
• In the Hong Kong court proceedings, the claimant claimed approximately US$325 million against the defendant in negligence.
• The defendant to the court proceedings applied for specific discovery of a wide range of materials from the arbitration, including the pleadings and written submissions, documents produced by way of disclosure, witness statements, transcripts of hearings, procedural orders and rulings, and the award. 

Decision 

• The court rejected the application based on the ordinary principles for specific discovery, holding that the requested materials were neither relevant nor necessary for the fair disposal of the matter or for saving costs.  The request was too broad and imprecise, because it sought effectively all of the documents generated in the arbitration without demonstrating the relevance of each category.
• In respect of the application for specific discovery of the award, the court also found that the rule in Hollington v. Hewthorn [1943] KB 587 would make the findings, opinions and conclusions of the tribunal in the award inadmissible as evidence of facts found (while not necessarily excluding underlying submissions and evidence referred to in the award, and certain parts of the award summarising the evidence).
• Arbitral confidentiality was an important discretionary factor in the court's dismissal of the defendant's application, as explained further below.

Legal principles on confidentiality 

• As a preliminary point, the court rejected an argument by the claimant that, where the issue of arbitral confidentiality was engaged, the burden would automatically shift to the party seeking discovery to demonstrate that it was necessary for disposing of the cause fairly or saving costs (in contrast to the usual position, where the burden would be on the party resisting discovery to satisfy the court that it was not necessary).  However, this did not affect the court's ultimate decision to reject the application.
• Turning to confidentiality itself, the court noted that documents prepared for and used in an arbitration are subject to an implied obligation of confidentiality, with the basic position being stated in the English decision of Emmott v. Michael Wilson & Partners Ltd [2008] Bus LR 1361.  The reference to implied confidentiality obligations suggests (although the decision does not state expressly) that the seat of the arbitration was outside Hong Kong, because arbitrations seated in Hong Kong are subject to express confidentiality obligations pursuant to section 18 of the Hong Kong Arbitration Ordinance (Cap. 609).
• Notwithstanding such implied obligation, the court noted that it had the power to order disclosure of the arbitration materials if necessary for the fair disposal of the court proceedings.
• It made no real difference that the party seeking to use the documents from the arbitration was (unlike in the Michael Wilson case) a non-party to the arbitration.  The existence of the confidentiality obligation was clearly relevant to the court's discretion.  Moreover, the present application did involve potential disclosure by a party to the arbitration, namely, the claimant who was resisting the application for specific discovery.  Whether it was a party or a non-party to the arbitration that sought disclosure of arbitration documents, the court was being asked in either situation to sanction a departure from the confidentiality of the arbitration. 

Reasoning on confidentiality

• The court's reasoning on confidentiality reflected four key propositions. 
• First, the arbitration materials were not necessary for the defendant to defend the plaintiff's claims in the court proceedings.  While they would make its "job a lot easier, they were not absolutely needed for the [defendant] to advance its case". 
• Second, there had to be an evidential basis before the court would order disclosure of arbitration documents to prevent a party from taking inconsistent positions in the arbitration and the court proceedings (of which the defendant had alleged there was a "real risk").  The court was not persuaded that such an evidential basis existed in this case.
• Third, a reference to the arbitral tribunal in a witness statement filed for the claimant in the court proceedings did not amount to "cherry picking" by the claimant of arbitration-related documents, and did not justify the disclosure of all the arbitration documents without regard to principles of confidentiality. 
• Fourth, granting the application would require the disclosure of confidential documents notwithstanding the fact that the third parties, who had been party to the arbitration, were not party to the court proceedings, and it was not clear whether they consented to such disclosure.  The court did not accept that the third parties would necessarily agree to disclosure simply because they had been successful in the arbitration. 
• Accordingly, there was no basis to override or depart from the confidential nature of the arbitration documents.

Comment 

• Although the court did not allow specific discovery of arbitration documents on this occasion, the decision serves as an important reminder that arbitral confidentiality is not absolute, and that (amongst other exceptions) disclosure of arbitration documents in separate court proceedings may be allowed in certain circumstances.
• That takeaway is consistent with the decision in BSADE v. Kitty Kam [2024] HKCFI 1657 (reported here), in which the court refused to grant a confidentiality order preventing the public disclosure of information relating to an HKIAC arbitration in parallel litigation proceedings, in which claims of fraud were advanced against a related party of the arbitration respondent.  That case was decided under the statutory regime applicable to Hong Kong-seated arbitrations (mentioned above), on the basis that any disclosure of arbitration documents was made for the purpose of pursuing a legal right or interest in legal proceedings, and was therefore a permitted exception to arbitral confidentiality pursuant to section 18(2)(a)(i) of the Hong Kong Arbitration Ordinance.