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ARTICLE · 23 JULY 2024

Consumer Rights Can Render An Otherwise Valid Arbitration Award Unenforceable

K&L Gates
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The UK Court of Appeal has upheld the enforcement of a US$64 million Hong Kong arbitration award against Mrs. Zhang, rejecting her claim that the UK Consumer Rights Act 2015 (CRA) should override the award. Lord Justice Males clarified that if the CRA applied and was breached, it could nullify an arbitration award on public policy grounds. This highlights the importance for consumer-facing businesses to carefully consider contract terms, dispute resolution clauses, and local laws, particularly i

United KingdomLitigation, Mediation & Arbitration
Peter R. Morton
Peter R. Morton
Declan C. Gallivan
Declan C. Gallivan

A warning to all consumer-facing businesses: the UK's Court of Appeal has upheld the enforcement of a US$64 million Hong Kong-seated arbitration award against a Mrs Zhang, rejecting her argument that she was protected by the UK Consumer Rights Act 2015 (CRA).1

So far so unremarkable. But, apart from convoluted underlying facts which Lord Justice Stephen Males (Males LJ) likened to "the facts of a students' moot," the case is notable for more substantive comments made by Males LJ in the leading judgment. He made clear that, if the CRA applied and was infringed, consumer rights would prevail over an arbitration award on UK public policy grounds, and the court would have to refuse enforcement of the award.

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