In A v B1 [2026] HKCFI 2444, the Hong Kong court dismissed a challenge to a Partial Award and Costs Award made in arbitration proceedings conducted under the 2018 HKIAC Administered Arbitration Rules (Rules), reaffirming the high threshold for judicial intervention in arbitration proceedings. The court rejected the Plaintiff’s complaint that the arbitral tribunal’s decision to proceed under the Early Determination Procedure (EDP) under the Rules and manner in which its claims were determined gave rise to grounds to set aside the Partial Award under s.81 of the Arbitration Ordinance, Cap 609 (AO).
Background
The Plaintiff (P) and Defendants (Ds) were respectively Claimant and Respondents in the arbitration. By a Partial Award, P’s claims were dismissed entirely under the EDP, which procedure had been invoked by Ds under Article 43 of the Rules. P applied to the court to set aside the Partial Award and Costs Award under s.81 of the AO, which incorporates Article 34 of the UNCITRAL Model Law (ML). Ds cross-applied for enforcement of the Costs Award.
The Early Determination Procedure (EDP)
The EDP empowers an arbitral tribunal to determine a point of law or fact that is manifestly without merit or manifestly outside the tribunal’s jurisdiction, or a point of law or fact that, assuming it is correct, would not result in an award being rendered in favour of the party that submitted such point. It is a two-stage process. Stage one is a “screening stage” to determine whether a request for EDP should proceed and the form in which it should proceed and stage two is the “determination stage”, at which the tribunal determines the “relevant points of law or fact” under the EDP. Each stage has a prescribed time limit within which the tribunal has to make its determination.
P’s Grounds for Challenge
P’s challenge was based on several grounds under the ML:
1. Article 43 / Procedural Complaint: The Tribunal failed to comply with the agreed EDP procedures because no specific point(s) of law or fact were ever formally identified throughout the EDP process.
2. EDP Due Process Complaint: As a consequence of the above, P was unable to present its case, contrary to ML Article 34(2)(a)(ii).
3. Excess Of Submission Complaint: The Tribunal exceeded its jurisdiction by dismissing matters beyond what was submitted for EDP, when Ds only requested the tribunal to determine “some points of construction”.
4. Public Policy & Coherence: The Partial Award conflicted with Hong Kong public policy by reason of the above and was manifestly incoherent or infra petita because the tribunal failed to deal with issues submitted to it.
Key Legal Principles Applied
In dismissing P’s application to set aside and granting Ds’ application to enforce the Costs Award, the court outlined and applied several key principles governing the setting aside of arbitral awards:
1. High Threshold for Intervention: The court is concerned with the structural integrity of the arbitration proceedings. The conduct complained of “must be serious, even egregious” before the court will find that there was an error sufficiently serious so as to have undermined due process.
2. Breach of Agreed Procedure: Not every procedural breach inevitably leads to annulment of an arbitral award. The court’s jurisdiction to intervene is only engaged if a party demonstrates (i) a serious violation of agreed procedures; and (ii) that the violation gave rise to a flagrant breach of procedural fairness.
3. Unable to Present Case: A party has a right to be heard on every issue that may be relevant to the resolution of a dispute and the “unable to present his case” ground is not limited to situations where a party is prevented from presenting legal arguments or deal with evidence on an issue going to the substantive merits of a case, but extends to a party being prevented from presenting his case on a procedural issue taken by the arbitral tribunal against him of the tribunal’s own volition. Ultimately, the question is one of fairness in the arbitral process.
4. Scope of Submission: The phrase “decisions on matters beyond the scope of submission to arbitration” under Article 34(2)(a)(iii) of the ML is to be construed narrowly and only includes those decisions clearly unrelated to or not reasonably required for determination of the disputes, matters or issues submitted to arbitration
5. Public Policy: The public policy ground is limited to enforcement that would be repugnant to basic notions of justice or cause a substantial injustice shocking to the court’s conscience. It is limited in scope and must be sparingly applied and is not a catch-all provision.
6. Infra Petita (Failure to Deal with Issues): An infra petita complaint will only succeed if an issue submitted to the tribunal was not dealt with in a way that causes substantial injustice. The court’s approach should be to read the award generously so as to remedy only meaningful and apparent breaches of the rules of natural justice, rather than to comb through an award in to order to assign blame or to find fault in the process. It will usually be a matter of inference, rather than explicit indication, that an arbitrator missed one or more important issues, and an inference that an arbitrator missed an issue should not be drawn unless it is “clear and virtually inescapable”.
Court’s Findings
The court found as follows:
1. On the EDP Procedure: The points of law or fact were sufficiently identified in the EDP application. Article 43 of the Rules does not specify the level of precision to which the point of law or fact should be articulated. The degree of precision is clearly a matter of case management which is within the discretion of the Tribunal.
2. On Due Process: P had multiple fair and reasonable opportunities to present its arguments against the EDP application and on the merits. There was no procedural unfairness.
3. On Excess of Submission: The tribunal had not exceeded its mandate and its decisions fell within the scope of the arbitration. On its plain reading, ML 34(2)(a)(iii) only applies if the award contains matters “beyond the scope of the submission to arbitration”, rather than scope of the EDP application.
4. On Public Policy, Coherence and Infra Petita: The Partial Award was not manifestly incoherent and the infra petita complaint was not made out, as the tribunal had dealt with all essential issues.
5. On the Costs Award: P’s complaint that the Tribunal should have conducted a more detailed assessment was rejected. In the absence of a prescribed mechanism, the tribunal was entitled to adopt a broad-brush approach to costs.
Comment
This is perhaps one of the few Hong Kong decisions on the EDP under the Rules. The decision not only reinforces the Hong Kong Court’s pro-arbitration approach and the high threshold required to challenge an arbitral award but is also a clear indication of the Court’s support for the EDP regime which is to increase arbitral efficiency. There has been an increasing trend of using EDP in HKIAC arbitrations. The total number of EDP filed with the HKIAC up to 2025 was 21.
For further information, please contact:
Joseph Chung, Partner, Deacons
joseph.chung@deacons.com
