Hong Kong Court of First Instance weighs up status of interim injunction. Was it an award?

Author(s): Alexander Lyall

In W v Contractor [2024] HKCFI 1452, an employer in a construction contract sought to appeal a decision made in arbitration regarding a call on a bond. In that decision, the arbitrator had made an interim injunction preventing the employer from calling on a bond for payment. The appeal rested on whether an interim injunction could be considered an award before a point of law could be examined.

The employer appealed the arbitrator’s decision on the grounds that the arbitrator had erred in law. Under section 6(4) of Schedule 2 of the Arbitration Ordinance, an appeal on law can only succeed if it was obviously wrong or the question is of general importance and the decision is open to serious doubt.

The Court noted that the threshold necessary to meet the standard of obviously wrong or open to serious doubt was high. As the first stage of the appeal is an application for leave, the Court is to look primarily at the arbitrator’s award and will limit the submissions by the parties. The Court applied the findings of an earlier judgment:

What has to be demonstrated to the Court, quickly and easily, without meticulous legal argument, is that the decision of the tribunal simply cannot be right, or that there are serious doubts as to the correctness or reasoning of the Award.

However, before considering whether the applied law met this standard, the Court directed that the fundamental status of the decision be examined. This is because, under section 6 of the Schedule, the Court is only able to consider an appeal on an arbitrator’s decision if that decision was an award. The question is, does this include interim injunctions? The Court referred to G v N [2024] HKCFI 721 to demonstrate the position that it did not.

The employer noted that in G v N, the decision was labelled as an interim injunction. In this case, the decision was called “an award”. However, the Court reiterated that it was concerned with the substance of the decision.

After assessing the decision’s nature, substance and form, the Court held that despite its name, the arbitrator’s decision was not an award. The Court noted that the injunction granted in the decision was interim in nature and was pending the conclusion of the resolution of the substantive dispute in the arbitration. The Court, therefore, found in favour of the contractor.

Other resources you might like

If you found this article helpful and are interested in learning more, there is a wealth of other resources available on our website. We have a wide array of articles and guides on a variety of topics, each designed to provide you with a deeper understanding of the subject matter. We encourage you to explore these resources and deepen your knowledge.

When the math matters: NZDRC arbitrator gets rent review right

Rent review disputes might not make headlines, but when they end up in arbitration — and then in the High Court — the details matter. A recent case involving a decision of one of NZDRC’s arbitrators, Catherine Green, is a good reminder of why getting the numbers right is so important.
A wide-angle view of a soccer match in a large stadium packed with spectators. The scoreboard shows a 0-0 scoreline. Players are actively engaged on the field, with one team in red and white and the other in black and white. Bright stadium lights illuminate the scene.

Arbitrator Breached Duty to Act Fairly by Seeking an Opinion From a Third Party and Conducting his Own Research

The Commercial Court has remitted an award to the arbitrator for reconsideration on the basis of serious irregularity after the arbitrator sought the opinion of a third party and conducted his own research without notifying the parties.
A man with glasses is sitting at a wooden table, looking surprised while peering at a laptop screen. He is lifting his glasses slightly off his face, eyes wide open, and the background is plain white.

It pays to check: US$54 million error a “simple” mistake

We all make mistakes – it’s human nature. However, some mistakes have bigger consequences and a London Court of International Arbitration (LCIA) panel recently had a US$54 million howler! When calculating the value of shares in assessing damages in a Russian commercial dispute, the tribunal of three arbitrators added a sum relating to historic tax labilities instead of subtracting it.

When the US$54 million error was brought to its attention, the tribunal sincerely apologised but refused to amend the award on the grounds it was a “fair assessment” of loss. Needless to say, the claimants weren’t happy. They asked the tribunal to correct the error. The tribunal refused. The claimants then filed a challenge to the award in the English High Court on the grounds that the mistake was a “serious irregularity”, causing “substantial injustice”, and the damages should be reduced to US$4 million. [1]

The challenge was heard by Sir Ross Cranston, who described how “a tribunal of leading arbitrators” made a “simple mistake” when assessing the damages. Sir Ross said it was “the sort of mistake any of us can make” but “with the most unfortunate of consequences”. The challenge was successful. The High Court remitted the award back to the tribunal for reconsideration.

Get in touch

Contact our team today to see how we can help

Contact us

This field is for validation purposes and should be left unchanged.