In A v B1 & B2 [2026] HKCFI 2444, the Hong Kong Court of First Instance considered a challenge to an arbitral award dismissing the entirety of a claimant’s case under the Early Determination Procedure (“EDP”) in Article 43 of the 2018 HKIAC Administered Arbitration Rules (“Rules”).
The EDP enables an arbitral tribunal to determine points of law or fact summarily, similar to summary judgment or striking-out under court procedures. In A v B1 & B2, the plaintiff attempted to set aside an arbitral award which had dismissed the entirety of the plaintiff’s claim by way of EDP (“Main Award”). The plaintiff argued that the request for EDP failed to comply with Article 43.4 of the Rules, in particular the requirements for the request to: (i) describe the “points of law or fact” to be determined (Art. 43.4(a)); (ii) propose the form of EDP to be adopted (Art. 43.4(c)); and (iii) comment on how the proposed form would achieve the objectives of the Rules (Art. 43.4(d)).
The plaintiff also challenged the Main Award on the ground of infra petita, i.e. that it failed to deal with the plaintiff’s case on a key issue (namely, whether the defendants had acted arbitrarily, capriciously or in bad faith in exercising their contractual discretion).
Finally, the plaintiff challenged the award on costs (“Costs Award”) (which had been made as a separate award) on the basis that the tribunal determined the amount of costs without any proper costs breakdown provided by the defendant. The plaintiff argued that, without a meaningful breakdown showing the hours incurred by each fee earner at each phase of the case, the plaintiff was deprived of a fair opportunity to respond to the claim for costs, and the tribunal was unable to properly discharge its duty to assess costs.
Deputy High Court Judge Jonathan Wong (“Judge”) dismissed the challenges to both the Main Award and the Costs Award, holding that:
- The “points of law or fact” had been sufficiently identified in the headings and sub-headings of the EDP application. Although the EDP application failed to propose the form of EDP to be adopted or comment on how the proposed form would achieve the objectives of the Rules, such failure was at most a minor and technical breach which did not cause any procedural unfairness, and in any event the plaintiff had waived any breach by failing to complain promptly.
- On the infra petita ground, applying AI v LG II [2023] HKC 656, the court’s approach should be to read the award holistically and generously. By finding that the defendants had acted reasonably, the tribunal implicitly rejected the plaintiff’s case that the defendants had acted arbitrarily, capriciously or in bad faith.
- Finally, on the Costs Award, the lack of a detailed costs breakdown did not prevent the plaintiff from presenting its case that the costs claimed were excessive. Further, the tribunal was entitled to adopt a broad brush approach in assessing the overall reasonable amount of costs without the need for a breakdown.
Key Takeaways
- First, this case is an important reminder that, while the EDP performs a similar function to summary judgment or striking out under court procedures, the procedural requirements are not the same. Practitioners should be careful to ensure that the requirements of Article 43 of the Rules are complied with, particularly the requirement of describing the “points of law or fact” to be decided. That being said, the judgment also confirms that the court will look to substance over form in assessing whether the requirement has been satisfied.
- Second, the judgment reaffirms the high threshold for challenging an award on the ground of infra petita. It shows that it is permissible for a tribunal to resolve an issue implicitly: it is not necessary for the tribunal to set out every step by which it reaches its conclusion.
- Third, this case is an example of the very wide latitude afforded to arbitral tribunals when it comes to assessing costs. An arbitral tribunal does not have to follow the court practices on taxation of costs and may instead make a broad-brush determination of costs based on the overall reasonableness even without an itemised costs schedule.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=180880&currpage=T
Dr Benny Lo and Mr Jiang Zixin, instructed by Messrs Simpson Thacher & Barlett, for the 1st – 2nd Defendants in 2 cases.
