12 MARKET COMMENTARY
INTERNATIONAL ARBITRATION 1/3LY
THE DECI S ION UNDERL INES HOW IMPORTANT I T I S FOR PART IES TO ADHERE TO THE RULES APPL I C ABLE TO THE IR CHOSEN PROCEDURE .
THE COURT ’S DECISION The Court first consideredwhether it had jurisdiction to intervene in the arbitral proceedings. Section 12 of the Arbitration Ordinance (Cap 609) prohibits intervention except in circumstances provided for either in the Ordinance itself or in the UNCITRALModel Law, to which it gives effect. Mr Gong’s applicationwas not made within 30 days of him receiving notice of HKIAC’s decision on his challenge, as required under article 13(3) of theModel Law (s.26(1) Arbitration Ordinance (Cap 609)). As a result, the Court decided that the claimwas time-barred and it could not render judgment. The Court went on to point out that even if the application had beenmade in time, it would have dismissed it on other grounds. The Court found that HKIAC is not the proper defendant in the context of this type of challenge, stating that the respondent must be a party to the relevant arbitration proceedings. The Rules of the High Court (O73, r.5) provide that the originating summonsmust be served on the challenged arbitrator(s), the tribunal and all other parties to the relevant arbitration proceedings. Mr Gong clearly failed to complywith these requirements. The Court also pointed out that errors of law or fact or alleged procedural errors relating to disclosure of evidence, do not qualify as proper grounds for the challenge of an arbitrator under article 12 of theModel Law (s.25 Arbitration Ordinance (Cap 609)). Further, the Court noted that arbitral institutionsmay only be held liable for administrative decisions where it is proven that they have been reached dishonestly (s.105 Arbitration Ordinance (Cap 609)). The Court highlighted that the absence of any evidence indicating any such dishonesty on the part of HKIACwas yet another reasonwhyMr Gong’s claimought to be dismissed. In rejectingMr Gong’s other demands, the Court noted that the HKIAC rules do not require HKIAC to provide reasons for administrative decisions of this nature (s.8 HKIAC Challenge Rules). It also noted that in the event of a challenge being brought in time under article 13(3) of theModel Law, the tribunal, including the challenged arbitrator(s), may continue the arbitration concurrently and render a decisionwhilst the challenge is pending.
BE ARING ON ARBITRAL INDEPENDENCE A necessary tension has always existed between the independence of arbitral proceedings and the involvement of courts. As Professor Jan Paulsson has noted: “the great paradox of arbitration is that it seeks the cooperation of the very public authorities fromwhich it wants to free itself”. 1 Although arbitral practitioners have long sought independence frompublic authorities, ultimately laws give effect to and govern arbitrations and courts play an essential role in giving effect to arbitral awards in any given jurisdiction. Courts also provide a necessary avenue for challenges to arbitral proceedings and their administration, as was the case here. Hong Kong has long been seen as an arbitration-friendly jurisdiction, and one inwhich there has been a notable reluctance by the courts to go beyond the limited scope afforded to them for intervention in arbitral proceedings. Although there was likely little worrywithin the HKIAC Council about Mr Gong’s challenge, given the state of the law, the decision of the Court is nevertheless awelcome recognition of the independence of the HKIAC in administering arbitrations and the limited basis uponwhich such administration can be challenged. The decision underlines how important it is for parties to adhere to the rules applicable to their chosen procedure, as theywill not be able to circumvent themby resorting to the Hong Kong courts when decisions go against them.
1 Paulsson, Jan “Arbitration in Three Dimensions” (LSE Legal Studies Working Paper No. 1 2.2010
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