HONG KONG’S TOP COURT FURTHER SCRUTINISES INSTANCES JUSTIFYING JUDICIAL INTERVENTION IN ARBITRATIONS
In June 2023, the Hong Kong Court of Final Appeal issued its long-awaited judgment in the case of C v D – a case that concerned the reviewability of pre-arbitral conditions in escalation clauses (also known as multi-tiered clauses). It is well-established in arbitration that a tribunal has the power to rule on its own jurisdiction. It is also clear in most jurisdictions (including Hong Kong) that the supervisory court of an arbitration can hear challenges to a tribunal’s jurisdiction and consider this matter afresh (i.e., on a de novo basis).
In C v D, the issue that was put before the Hong Kong courts was whether it was open for them to review an arbitral tribunal’s decision that preconditions to arbitrate had been satisfied. The Court of Final Appeal unanimously held that such a decision was not open to review. In other words, the tribunal’s decision was not (and should not be) subject to judicial interference.
What did divide the top court, however, was why each judge examined the difference between the two concepts of ‘admissibility’ and ‘jurisdiction’ and considered whether this distinction should be adopted when deciding what matters could and could not be reviewed by the courts. In general terms, issues of ‘jurisdiction’ go to the existence of a tribunal’s power to judge the merits of a dispute, while issues pertaining to ‘admissibility’ go to whether the tribunal will exercise that power in relation to the claims submitted.
By a four to one majority, Hong Kong’s top court found that the distinction served as a useful aid in determining when judicial interference was warranted under the Hong Kong Arbitration Ordinance.
Oct-Dec 2023 issue
Quinn Emanuel Urquhart & Sullivan LLP