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ARTICLE · 11 AUGUST 2022

Hong Kong Court Clarifies Threshold For Setting Aside Awards

Herbert Smith Freehills Kramer LLP
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A Hong Kong Court recently adopted a resoundingly pro-arbitration stance in a decision which emphasised the high thresholds of irregularity that would need to be established...

Hong KongLitigation, Mediation & Arbitration
May Tai
May Tai
Simon Chapman
Simon Chapman
Antony Crockett
Antony Crockett
Kathryn Sanger
Kathryn Sanger
Briana Young
Briana Young

A Hong Kong Court recently adopted a resoundingly pro-arbitration stance in a decision which emphasised the high thresholds of irregularity that would need to be established before an arbitration award can be set aside.

In LY v HW, [2022] HKCFI 2267, the Court dismissed an application to set aside an award based on claims that the Tribunal had failed to deal with the key issues and failed to provide sufficient reasons for its decision in the award. This decision underlines the narrow manner in which grounds for refusal of enforcement are to be construed and fortifies the enforceability of arbitration awards in Hong Kong.

Background

A Hong Kong company (LY) had entered into an Agreement with a Chinese company (HW), for the distribution of pharmaceutical products on the Mainland. Under the Agreement, the exclusive distributor HW was required to achieve a minimum annual sales value (ASV) target.

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