On the 14th June 2012, the judgment of Xiamen Xinjingdia v
Eton Group & Ors was handed down in the Hong Kong High
Court. It held that an order enforcing a foreign arbitral award
under the New York Convention cannot be used as a derivative action
to claim damages not considered in the original award through
importing the law of the enforcing court. It sends a stark message
of the difficulties which parties will face when they do not
consider how an award in their favour can be enforced, even if they
are successful.
The Background
The case arose out of contract between the plaintiff and the
first and second defendants, the Eton Group, for the sale of land
and apartments in the PRC. The owner of the land was the fourth
defendant, whose entire shareholding was held by the first and
second defendants. It was anticipated that the sale contract would
be completed in three steps. First, the first and second defendants
would give up their possession of the land in return
