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.

A person in a suit is sitting at a table with a gavel in the foreground and a book in their left hand. The focus is on the gavel, suggesting a legal or judicial setting. The background is blurred, emphasizing the foreground objects.

What are the cost implications of challenging an arbitral award through the courts?

A recent decision of the Singapore High Court shone a spotlight on indemnity costs and when they will, and won’t, be granted following the unsuccessful challenge of an arbitral award. The decision highlighted the opposite principles in place between Singapore and Hong Kong when a losing party challenges the arbitrator’s award through the court system and fails. What are the underlying motivators for these differences, and how do they reflect the situation in New Zealand?
Three people in business attire gathered around a table. Two are shaking hands while standing, and the third person, holding a laptop, stands nearby. A smartphone, coffee cup, and a rectangular planter are visible on the white conference table.

Court orders parties back to arbitration

The recent case of Sesderma, S.L. v Seeky International Limited and Golong Co. Ltd [2023] HKCFI 1619, heard in the Hong Kong Court of First Instance, examined the law of issue estoppel and the governing law of arbitration agreements.

An issue estoppel arose as a prior Hong Kong Court ruling held that the contract between the disputing parties which contained an exclusive jurisdiction clause had been superseded by the contract containing a China International Economic and Trade Arbitration Commission (CIETAC) arbitration clause.

The Court found that regardless of the issue estoppel the parties were bound by the arbitration clause and the proceedings were stayed.
A close-up of a silver house key inserted into a round, silver door lock, symbolizing the absence of an "access clause" often implied in commercial leases. The key has a key ring attached, holding several smaller metal rings that reflect light against a plain, dark background.

No access clause implied in commercial leases

On 28 October 2021, the Government amended the Property Law Act to imply a ‘no access in an emergency clause’ into commercial leases which do not already provide for adjusted rent payment terms during an epidemic emergency. The implied clause applies from 18 August 2021, which was the start of the most recent rise in Alert Levels, but will not affect agreements between landlords and tenants to adjust rent obligations made prior to that date.

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.