A Warning Against Procedural Non-Compliance: Hong Kong Court Reaffirms Procedural Rigour and Narrow Public Policy Ground in Enforcement Challenge

(1) Introduction

In V v. M (HCCT 26/2025, judgment dated 16 March 2026),[1] the Court addressed the summons of the Respondent (“M”) to set aside an order granting leave to enforce an arbitral award (the “Award”) made in an arbitration at the Shanghai International Economic and Trade Arbitration Commission (“SHIAC”) (the “Arbitration”). M relied on four grounds: (i) the Award “will be set aside” pursuant to M’s intended application to the Shanghai First Intermediate People’s Court (“Shanghai Court”) to set aside the Award (“Ground 1”); (ii) M was unable to present its case in the Arbitration (“Ground 2”); (iii) the arbitral procedure was not in accordance with the parties’ agreement and/or the law of the Mainland (“Ground 3”); and (iv) it would be contrary to public policy to enforce the Award (“Ground 4”). Ultimately, the Court rejected all the grounds and dismissed M’s summons to set aside the enforcement order.

This case serves as an important reminder on the proper conduct of set aside applications. The Court underscored the requirements of Order 73, rule 10(6A) of the Rules of the High Court (“RHC”): (1) the supporting affidavit must be filed at the same time as the summons; and (2) both the summons and the affidavit must set out the grounds relied upon and all the facts supporting them. The Court held that it is “inadequate and an abuse” to assert public policy in general terms without specifying the facts showing how enforcement would be contrary to public policy, and that a party cannot later “comb through” the arbitral record to find defects. Such conduct is totally contrary to the aims of the Arbitration Ordinance to uphold arbitration agreements and awards, and against the RHC objectives of speedy resolution of disputes and avoiding the waste of judicial resources and costs.

(2) Facts

In 2018, the Applicant (“V”) and M entered into an asset purchase agreement concerning a mining project in Australia (the “Agreement”). [2] The Agreement was governed by Mainland law and contained an arbitration clause providing for arbitration at the SHIAC.

Pursuant to the Agreement, V paid M a total of over AUD 6.3 million, but M never transferred the assets. [3] Disputes arose as to whether M breached warranties regarding third-party consents and whether the failure to complete the transaction was due to V’s refusal to pay capital gains tax. [4]

V commenced SHIAC arbitration in March 2022. [5] A three-member tribunal (the “Tribunal”) was constituted and two oral hearings were held in 2022 and 2023. [6] Both parties filed written submissions and evidence.

During the Arbitration, M made various procedural applications: to suspend the proceedings pending an Australian court case concerning the consent of a third party; to hold a third hearing after a late valuation report was submitted; and to have experts appointed on foreign law and valuation. The Tribunal refused the applications, but allowed the parties to file written submissions on the new valuation report. [7]

On 2 December 2024, the Tribunal issued the Award in favour of V. [8] V obtained leave from the Hong Kong Court to enforce the Award as a judgment on 6 March 2025 (the “Enforcement Order”). [9] M applied to set aside the Enforcement Order on 19 March 2025 (the “Set Aside Summons”). [10]

On 22 April 2025, M applied to the Shanghai Court to set aside the award. That application was dismissed on 17 June 2025. [11] Subsequent supervision applications to the Shanghai procuratorate were also rejected. [12]

On 29 April 2025, V took out a summons to dismiss the Set Aside Summons or, alternatively, for payment of security. [13]

(3) Decision

Set Aside Summons

The Court dismissed the Set Aside Summons on the following grounds:

(1) Ground 1: The Court held that enforcement of a Mainland award may be refused only on the grounds expressly set out in Section 95 of the Arbitration Ordinance (the “Ordinance”). [14] Under Section 95(2)(f) of the Ordinance, refusal is permitted only if the award “has been set aside or suspended” by a competent Mainland authority. An intention to apply to set aside, or a pending application that is subsequently dismissed, does not satisfy this requirement. [15] Further, the Shanghai Court had already dismissed M’s application to set aside the Award. [16] The Court gave “due regard and weight” to that decision, treating it as evidence of the applicable Mainland law and of whether there had been any breach of the SHIAC Rules. [17] As such, there was no basis to refuse enforcement under Section 95(2)(f) of the Ordinance. [18]

(2) Ground 2: The Court found that M had been given ample reasonable opportunity to present its case through two oral hearings and multiple rounds of written submissions. [19] The number of hearings to be held, the admission of evidence and the refusal to suspend proceedings were matters of case management falling within the Tribunal’s broad discretion. [20] M had never applied for the appointment of experts or for witness cross‑examination during the Arbitration, and could not belatedly complain about the absence of such procedures. [21] As such, there was no basis to refuse enforcement under Section 95(2)(c)(ii) of the Ordinance. [22]

(3) Ground 3: M failed to identify any agreement of the parties or provision of Mainland law that mandated further hearings or the appointment of experts. [23] The Shanghai Court had already ruled that the Tribunal’s conduct was consistent with the SHIAC Rules, and the Hong Kong Court gave weight to that finding. [24]

(4) Ground 4: The Court reiterated that the public policy ground is narrow and must be “sparingly applied”. [25] It is not for a party or the Court at the enforcement stage to “plough through the bundles of documents” in the arbitration to search for defects that might support a public policy challenge. [26] The party invoking public policy bears the burden of clearly identifying the facts that allegedly render enforcement contrary to public policy. M’s invocation of public policy was merely a repackaging of its other complaints, none of which disclosed any egregious breach of due process. [27]

Rejection of M’s Late Affidavit

The Court disregarded M’s third affirmation (“Hung 3”) in its entirety on the following grounds:

(1) Hung 3 was filed after the issuance of the Set Aside Summons and therefore did not comply with the mandatory requirement of Order 73, rule 10(6A) of the RHC that the supporting affidavit be filed at the same time as the summons. [28]

(2) The Court ordered on 9 May 2025 that all affidavits to be filed shall be confined only to matters of fact. However, Hung 3 entirely of legal submissions and arguments, rather than facts or evidence relevant to the determination of the Set Aside Summons.  [29]

(3) Hung 3 sought to introduce new facts and grounds, which were not set out in the Set Aside Summons or the supporting affidavit. [30]

(4) Key Takeaways

This case highlights the following significant principles for parties seeking to resist enforcement of an arbitral award in Hong Kong:

(1) Strict compliance with procedural requirements: An application to set aside an enforcement order must comply strictly with Order 73, rule 10(6A) of the RHC. All grounds relied upon and all supporting facts must be set out in the summons and the affidavit filed at the same time. New grounds or evidence cannot be introduced later. Failure to comply may result in the evidence being disregarded and the application being dismissed. The Court emphasized that it is “inadequate and an abuse” to later “comb through” the arbitral record to find defects, particularly under the guise of public policy.

(2) The public policy ground is narrow: The Court reiterated that public policy is a narrow ground,. A party cannot simply assert “public policy” in general terms without clearly specifying the facts that allegedly make enforcement contrary to public policy. Where the ground merely repackages other unsubstantiated complaints, it will not succeed.

(3) Parties must raise procedural objections during the arbitration: If a party wishes to call witnesses, appoint experts, or seek further hearings, it must do so during the arbitration. A party cannot remain silent on such matters and later argue that the tribunal denied it a fair opportunity to present its case. The Court held that matters which should have been raised with the tribunal but were not, should not be brought before the Court at the enforcement stage.

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[1] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=178619

[2] V v. M (HCCT 26/2025, judgment dated 16 March 2026), §8

[3] Ibid, §13

[4] Ibid, §14

[5] Ibid, §15

[6] Ibid, §17-§18

[7] Ibid, §23

[8] Ibid, §25

[9] Ibid, §1

[10] Ibid, §2

[11] Ibid, §26

[12] Ibid, §27

[13] Ibid, §4

[14] Ibid, §42

[15] Ibid, §47

[16] Ibid, §48

[17] Ibid, §50

[18] Ibid, §51

[19] Ibid, §52

[20] Ibid, §53

[21] Ibid, §60

[22] Ibid, §72

[23] Ibid, §73

[24] Ibid, §75

[25] Ibid, §38

[26] Ibid, §90

[27] Ibid, §91

[28] Ibid, §35

[29] Ibid, §36

[30] Ibid, §35

The Interplay Between Birthright Membership and the Limitation Period: Why Adverse Possession Claims Against Business T'ongs with Tso Members May Never Succeed

(A) Introduction
 
In Man Chung Lap v. Man Shui Tong Wui with Man Ping-name and Man Tai-sang as Managers, HCA 1736/2024, date of judgment: 13 March 2026, [1] the Court addressed an interesting and novel question of law, namely, under customary Chinese laws which are an integral part of the general body of Hong Kong laws, whether the undisputed legal principle that the limitation period runs afresh in adverse possession claims against a tso where a new member of the tso is born, which creates a new equitable interest in the tso property extends and applies to a business t’ong with a tso as one of its members. [2]
 
The Plaintiff claimed to have acquired a piece of land in the New Territories by adverse possession. The Defendant argued that as its membership includes several ancestral tsos, the birth of new male descendants into those tsos after the Plaintiff took possession created new equitable interests in the land. This prevented the limitation period from ever expiring. 

Ultimately, the Court struck out the Plaintiff’s action on the ground that the limitation period for an adverse possession claim against the Defendant could never expire.
 
(B)  Facts
 
The Plaintiff is and was at all material times a member of San Yeah Tso (莘野祖), an ancestral tso .  The Defendant, Man Shui Tong Wui (文水塘會, the “Wui”), is a business t'ong whose membership consisted and still consists of ancestral tsos/t'ongs, business t'ongs, individuals (including male and females), and a limited company. Its managers are Man Ping Nam and Man Tai Sang. The Wui’s members include 18 ancestral tsos, two of which are San Yeah Tso (莘野祖) and Yee Fong Tung Sheung Tso (二房通常祖). [3]
 
In 1986, the Wui granted a 10-year tenancy to four tenants, including Man Ching Yip (文正業), father of Man Whi Chung (文偉昌), in respect of all its land lots (consisting of 48 Dam (擔) in area, including the disputed lot) for use as fishponds (the “1986 Tenancy”). [4] The Plaintiff accepted the 1986 Tenancy at face value and that it was performed by the 4 tenants and their successors. However, he maintained his claim to have adversely possessed the land for over 20 years or 12 years since sometime on 1 July 1991. [5]
 
On 29 August 2024, the Plaintiff issued a writ against the Defendant claiming adverse possession of the disputed land lot “since the late 1990s”. [6]
 
Subsequently, the Defendant applied to strike out the claim under Order 18, rule 19 of the Rules of the High Court on the ground that the limitation period for an adverse possession claim against the Wui could never expire. [7] New male descendants were born into the member tsos on 23 January 1990, 12 February 1991, 20 September 1992, 24 February 1993, 7 December 1994, 6 September 1999, 17 October 2006 and 4 August 2016, with no gap of 12 years between any of them. [8] As each birth created a new equitable interest in the Wui’s land and therefore a new right of action to recover it. The limitation period was prevented from ever running its course.
 
(C) Decision
 
The Court struck out the Plaintiff’s claim on the ground that the limitation period for an adverse possession claim against the Wui could never expire. Its reasonings was as follows:

(1) The Nature of the Wui: The Court held that the Wui is a business t'ong on the ground that it was formed for a profit-making purpose as evidenced by the bi-annual distribution of rental income from leasing out its landed properties and it has a non-ancestral membership, which includes females and a limited company as well as members of the Wui having definite and freely transferrable shares of interest. [9] 

(2) Beneficial Ownership: The Court held that the members of a business t’ong are the beneficial owners of its property. [10] Given that a tso (for example, San Yeah Tso) is not a legal entity captioned of holding property in its own property interests directly, its individual members directly hold this beneficial interest in the Wui’s land. [11]

(3) Application of the Wui: The Court applied the principle from Leung Kuen Fai v Tang Kwong Yu (or U) T'ong or Tang Kwong Yu Tso [2002] 2 HKLRD 705, which held that for a tso, a new equitable interest in the land is created each time a male descendant is born, starting a fresh limitation period, to the Wui (a business t’ong with a tso as its member).  Although the Wui itself is a business t'ong with freely transferable shares, the presence of tsos as its members was decisive because a tso itself is not a legal entity capable of holding property in its own right. Instead, it is a collective body whose members are the ultimate beneficial owners of any property held in the tso’s name. Where a tso holds a membership interest in a business t'ong, the individual members of that tso are the true beneficial owners of the t'ong's underlying assets. As such, when a new male is born into a member tso, that person automatically acquires a direct beneficial interest in the Wui's land. This creates a new equitable interest in the land and a new right of action to recover the land. Each such birth resets the limitation period. [12]

(4) Factual Findings: The Court found that the eight male descendants were born to the member tsos between 1990 and 2016, with no gap of 12 years between any of these births. As such, the limitation period had never expired. [13]
 
(D) Key Takeaways
 
This case demonstrates the interplay between Chinese customary law (the nature of tsos and birthright membership) and the Limitation Ordinance. The Court clarified that it is impossible to acquire land by adverse possession against a business t’ong if one of its members is an ancestral tso (or, by extension, any hereditary body). As long as new males continue to be born into the member tso, the limitation period will restart perpetually.

 
In light of the above, this case provides helpful guidance for claimants considering adverse possession against any land in the New Territories. Claimants should:

(1) Investigate the registered owner and its constituent members. If the registered owner is a t'ong, ascertain whether any of its members are tsos or other hereditary bodies. If it is a business t'ong with a tso as a member, the limitation period may never expire. The birth of any male descendant into that tso, even decades after the claimant took possession, will reset the clock.

(2) Verify whether any males have been born into the member tso during the claimant’s period of possession.  In particular, ascertain whether there is any gap of 12 years or more between such births, as continuous births without such a gap will defeat the claim.

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[1] https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2024/HCA001736_2024.doc

[2] Man Chung Lap v. Man Shui Tong Wui with Man Ping-name and Man Tai-sang as Managers, HCA 1736/2024, date of judgment: 13 March 2026, §1

[3] Ibid, §4

[4] [Ibid, §6

[5] [Ibid, §5

[6] [Ibid, §6

[7] [Ibid, §2

[8] [Ibid, §6

[9] [Ibid, §11

[10] [Ibid, §42

[11] [Ibid, §47

[12] [Ibid, §52

[13] [Ibid, §63

Section 6 vs Section 91 of the Competition Ordinance: Hong Kong Competition Tribunal Clarifies Scope of Facilitator Liability

(A) Introduction

The First Conduct Rule (the “FCR”) in Section 6(1) of the Competition Ordinance (Cap. 619) (the “Ordinance”) prohibits undertakings from making or giving effect to agreements that have an anti-competitive object or effect. [1] However, can an undertaking which is not a party to such an agreement and is not a participant in the market on which the contravention is alleged to have occurred be liable under Section 6 of the Ordinance merely on the ground of facilitation?

Competition Commission v. Gray Line Tours of Hong Kong Ltd and others [2026] HKCT 1 (date of judgment: 4 March 2026) [2] is the first competition case in Hong Kong which the Competition Commission (the “Commission”) commenced proceedings against alleged cartel facilitators. In this case, the Competition Tribunal (the “Tribunal”) addressed the above question. The Commission argued that two hotel operators facilitated a price-fixing arrangement between two competing ticket sellers by relaying pricing information and mediating between them and that such facilitation alone constitutes a contravention of the FCR under Section 6 of the Ordinance.

The Tribunal answered “No”. It held that Section 6 of the Ordinance does not extend to facilitation and that such a complaint in Hong Kong must be brought under Section 91 of the Ordinance, which specifically deals with persons “involved in a contravention” and requires proof of both knowledge and intent. Given that the Commission accepted that it had not advanced an alternative case under Section 91 of the Ordinance, the Tribunal dismissed the Commission’s application.

(B) Facts

The Commission’s case concerns the alleged facilitation of a price-fixing arrangement by two hotel operators, Harbour Plaza 8 Degrees Limited (“HP8”) and Harbour Plaza Hotel Management Limited (“HPM”) (collectively, the “Respondents”), at the Harbour Plaza 8 Degrees hotel (the “Hotel”), which was owned by HP8 and managed by HPM. [3]

The underlying arrangement was between two competing ticket sellers, Gray Line Tours of Hong Kong Limited (“Gray Line”) and Tink Labs Limited (“Tink Labs”). Gray Line operated a tour counter at the Hotel selling attraction tickets at published prices, while Tink Labs provided “handy devices” in hotel rooms through which guests could purchase the same tickets, often at discounted rates. [4]

Gray Line and Tink Labs had no direct contact. All communications regarding the price-matching arrangement were channelled through the Hotel’s staff. By relaying pricing information and mediating between the parties, the Respondents allegedly facilitated the price-fixing arrangement, which contravened the FCR under Section 6 of the Ordinance. [5]

(C) Decision

The Standard of Proof

The Commission accepted that the Tribunal proceeded on the basis that the criminal standard of proof applies. [6] Accordingly, the Tribunal must be satisfied beyond all reasonable doubt that each element of the alleged contravention has been proved. The Respondents do not have to prove anything and are entitled to the benefit of any doubt. [7]

The Tribunal also explained that the existence of an anti-competitive agreement may be inferred from a combination of coincidences and indicia which, taken together and in the absence of any plausible alternative explanation, constitute evidence of an infringement. [8]

Where the criminal standard applies, three conditions must be satisfied for an inference to be drawn: [9]

(1) the inference must be grounded on clear findings of primary facts;

(2) it must be a logical consequence of those facts; and

(3) it must be irresistible, in other words the only inference that can reasonably be drawn.

It is sufficient if the body of evidence, viewed as a whole, satisfies the burden, even if each individual item does not. Common sense inferences, including adverse inferences, may be drawn under the criminal standard. [10]

Further, the Tribunal noted that even under the civil standard, a disciplined approach is required when drawing inferences. Serious misconduct is less likely than lesser misconduct, and therefore requires evidence of commensurate cogency. In practice, the above three conditions must be satisfied regardless of the applicable standard. [11]

Section 6 and Section 91 of the Ordinance

The Tribunal held that Section 6 of the Ordinance does not extend to facilitation of an anti-competitive agreement by an undertaking that is not a party to that agreement on the following grounds:[12]

(1) The language of Section 6 prohibits undertakings from making or giving effect to an agreement or engaging in a concerted practice that has an anti-competitive object or effect. By its terms, it does not cover the conduct of an undertaking that merely facilitates such an agreement without being a party to it. 

(2) Section 91 is the relevant provision for facilitators. It requires proof of knowledge and intent. It also defines when a person (including an undertaking) is “involved in a contravention” and includes:

(a) aiding, abetting, counselling or procuring a contravention (Section 91(b)); and

(b) being in any way, directly or indirectly, knowingly concerned in or a party to the contravention (Section 91(d)). 

(3) It would be anomalous for the Commission to proceed under Section 6 in respect of involvement that constitutes aiding and abetting, thereby avoiding the need to prove knowledge and intent to the criminal standard, which are the requirements under Sections 92(1)(b) and 91(b).

(4) The inclusion of Section 91 in the Ordinance is a material difference between the Hong Kong and the EU statutory regimes. The Tribunal rejected the Commission’s submission to follow EC case law, where facilitators have been held liable under Article 101 Treaty on the Functioning of the EU. This is because the Hong Kong legislature chose to include a specific provision for involvement in a contravention. It would be wrong to interpret Section 6 in a way that allowed the Commission to bypass the requirements of Section 91. As such, EU case law is of limited assistance in construing Sections 6 and 91.

Given that the Commission accepted that it had not advanced an alternative case under Section 91 of the Ordinance, the Tribunal dismissed the Commission’s application. [13]

The Court’s Findings

On the assumption that facilitation constitutes a contravention of the FCR, had Section 6 applied, the Tribunal would have found the contravention proved beyond all reasonable doubt and held the Respondents liable from 1 August 2016 to 7 March 2017. Its reasonings are as follows:

(1) The Tribunal found that Mr. Kenneth Chan Kai Chiu (“Mr. Chan”), acting on behalf of HP8, played a central role in facilitating the price-matching arrangement. [14]

(2) Gray Line and Tink Labs had no direct contact. All communications were channelled through the Hotel’s staff, with Mr. Chan acting as intermediary. [15]

(3) In May 2016, Gray Line first raised its concerns with Mr. Chan requesting that the ticketing function on the handy devices be removed. Mr. Chan knew that Gray Line's complaint stemmed from the fact that Tink Labs was offering tickets at lower prices, which Gray Line considered unfair. He also understood that an alternative solution was to have Tink Labs adjust its prices to match Gray Line's published prices. [16]

(4) On or about 1 August 2016, Ms. Agnes Poon of Tink Labs informed Mr. Chan that Tink Labs’ management agreed to adjust its prices to match Gray Line’s and requested Gray Line's price list. Mr. Chan confirmed HP8’s acceptance of the price-matching proposal. [17] Following the call, Mr. Chan personally verified Gray Line’s prices at the Hotel’s tour counter and emailed Ms. Poon with a price list copied from an earlier Gray Line email. [18]

(6) On 12 August 2016, Mr. Eddie Wu (“Mr. Wu”) of Gray Line reported that at HP8, “theme park ticket is selling original price”, which was a compelling inference that Mr. Chan had informed him of this. [19]

(7) On 29 September 2016, after being alerted by Mr. Wu that handy devices at some hotels had reverted to discounted rates, Mr. Chan personally checked a handy device at the Hotel and confirmed the prices remained matched. Mr. Chan reported back to Gray Line, and Mr. Wu replied: “Many thanks for your help again, great[ly] appreciated.” [20]

(D) Key Takeaways

This case is significant on the following grounds:

(1) Liability of facilitator falls under Section 91, not Section 6: 

The Tribunal held that Section 6 of the Ordinance does not extend to facilitation. Any complaint against an alleged facilitator must be brought under Section 91 of the Ordinance, which specifically defines when a person is “involved in a contravention”. This includes aiding, abetting, counselling or procuring a contravention. To establish liability under Section 91 of the Ordinance, the Commission must prove that the facilitator:

(a) knew the essential facts constituting the contravention; and

(b) intended to contribute to the anti-competitive objective.

(2) Standard of Proof: 

This case reaffirmed the application of the criminal standard of proof, namely, beyond all reasonable doubt, to competition proceedings before the Tribunal. The Commission must prove all the elements of the alleged contravention to this high standard and respondents are entitled to the benefit of any doubt.

(3) Facilitators Remain at Risk

Although the Commission failed in this case on procedural grounds, this case confirms that facilitators can still be liable under Section 91 of the Ordinance. Undertakings that assist competitors in reaching anti-competitive arrangements, for example, by passing pricing information and mediating between parties, will be exposed to enforcement action, provided the requisite knowledge and intent can be proved.

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[1] https://hkiac.org/arbitration/what-is-arbitration/

[2] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=177994

[3] Competition Commission v. Gray Line Tours of Hong Kong Ltd and others [2026] HKCT 1 (date of judgment: 4 March 2026), §1

[4] Ibid

[5] Competition Commission v. Gray Line Tours of Hong Kong Ltd and others [2026] HKCT 1 (date of judgment: 4 March 2026), §7

[6] Ibid, §29

[7] Ibid, §30

[8] Ibid, §31

[9] Ibid, §32

[10] Ibid

[11] Competition Commission v. Gray Line Tours of Hong Kong Ltd and others [2026] HKCT 1 (date of judgment: 4 March 2026), §33

[12] Ibid, §73-§74

[13] Ibid, §75

[14] Ibid, §112

[15] Ibid, §114

[16] Ibid, §115

[17] Ibid, §120

[18] Ibid, §121

[19] Ibid, §128

[20] Ibid, §130

The End of Enforcement War: Hong Kong Court Reaffirmed Finality of Arbitral Award

(A) Introduction
 
The finality of arbitral awards is a main advantage of arbitration.[1] The statutory mechanism for challenging an arbitral award is narrow and time-bound.
 
In G, G v. CNG and SIL, [2026] HKCFI 902, date of judgment: 11 February 2026, [2] the Hong Kong Court addressed a fundamental question: can a party, which missed the three-month deadline to set aside an award under Section 81 of the Arbitration Ordinance (Cap. 609) (the “Ordinance”), circumvent that statutory regime by commencing a fresh arbitration on the ground that the underlying contracts and the awards themselves were procured by fraud? In other words, does fraud “unravel all” so as to create a standalone cause of action outside the exclusive recourse provisions of the Model Law, or must any such challenge be brought before the supervisory court within the prescribed time limits?  
 
The Hong Kong Court answered “No”. It held that any challenge to an arbitral award must be brought before the supervisory court within the three-month time limit prescribed by Section 81 of the Ordinance. This exclusivity cannot be circumvented by reframing a challenge as an independent cause of action in a fresh arbitration, even where grave allegations of fraud or bribery are raised. Otherwise, the finality and certainty of the arbitral process would be undermined. Ultimately, the Court granted an anti-arbitration injunction and dismissed the application to stay enforcement of the original arbitral awards.
 
(B)  Facts
 
The dispute arises from a Share Purchase Agreement dated 18 December 2013 (“SPA”) made between the G Parties and CNG and a Shareholders Agreement dated 17 March 2014 (“SHA”). Both agreements contained arbitration clauses providing for Hong Kong-seated arbitration. [3]
 
In November 2020, the G Parties commenced arbitration against CNG (the “Original Arbitration”), which resulted in four partial awards (collectively referred to as “Awards”). [4]
 
In February and March 2025, the Hong Kong Court granted leave to enforce the 1^st and 3^rd Partial Awards as judgments (the “Enforcement Orders”). [5] CNG applied to stay the Enforcement Orders. Initially, the stay was sought on the ground of impossibility due to a foreign receivership order over the SIL shares. [6] After that ground failed, CNG relied on a new allegation that the G Parties bribed Mr. A, a key CNG negotiator during the 2010-2013 negotiations and that this fraud tainted both the underlying contracts and the arbitration process itself. [7]
 
On 26 June 2025, CNG applied for a stay of execution of the Enforcement Orders (the “Stay Application”). [8]

On 23 July 2025, it commenced a new arbitration (the "Bribery Arbitration"), seeking: [9]

(1)  The Set Aside Claim: A declaration that the Awards were procured by fraud and should be set aside.

(2) The Rescission/Damages Claim: An order rescinding the SPA and SHA due to bribery, with consequential relief including restitution of all sums paid and damages.
 
The G Parties objected to the Bribery Arbitration and applied for an anti-arbitration injunction (“Injunction Application”) on the following grounds: [10]

(1) Contractual Ground: Under the Arbitration Agreements in the SPA and the SHA, CNG agreed to Hong Kong as the seat of arbitration and accepted that the Hong Kong courts should have exclusive supervisory jurisdiction over any challenge that may be made to the awards made in the arbitration (pursuant to section 81 of the Ordinance and Article 34 of the Model Law). As such, it was a breach of the Arbitration Agreement to challenge the Awards in any other forum, whether by way of a fresh arbitration, or otherwise.

(2) Abuse Ground: The claim to set aside the Awards on the ground of alleged fraud/bribery was: (i) collateral attack abuse, as it sought to collaterally attack the Awards and the Enforcement Orders; (ii) inconsistency abuse, since CNG affirmed the SHA and SPA because of its position taken in the related arbitrations, and cannot be permitted to raise the alleged bribery; and (iii) Finzi abuse, because CNG’s claim was based upon materials and evidence which could have been raised in the Original Arbitration, and it failed to show why the relevant evidence now relied upon could not have been obtained earlier, with reasonable diligence.
  
(C) Decision
 
The Court granted the Injunction Application and dismissed the Stay Application on the following grounds:

(1)  Contractual Ground: The Court held that under Section 81 of the Ordinance, the application to set aside an award was the exclusive recourse against any arbitral award. [11] Article 34 of the Model Law was intended to provide the only permissible method to challenge an arbitral award once made, in the interests of universal clarity, certainty and finality. Such challenge must be made by way of an application to the Court of First Instance (being the competent authority designated under Section 13(5)(b) of the Ordinance), on the grounds exhaustively set out in Article 34(2) of the Model Law and within the strict three-month time limit prescribed by Article 34(3) of the Model Law. [12] The alleged fraud itself did not take the recourse outside the scope of Article 34(1) of the Model Law. [13] The Bribery Arbitration, which commenced after the expiration of three-month period, was therefore non-compliant with Article 34(1) of the Model Law. [14]

(2) Abuse Ground: The Court found that the Bribery Arbitration was an abuse of process on the following grounds:

(i)  The “Set Aside Claim” was a direct challenge to the Awards. The “Rescission/Damages Claim” was , in substance, an indirect attack, as it sought to unwind the obligations and rights that the Awards had definitively established. Granting rescission of the contracts or repayment of damages awarded would fundamentally nullify the effect of the Awards. [15] 

(ii) CNG's conduct after discovering the alleged fraud was inconsistent with any genuine belief that the contracts or Awards were tainted. CNG took steps affirming the validity of the SPA, SHA and the Awards and pursuing claims under the same agreements. Such inconsistent conduct amounted to an abuse of process. [16]

(iii) CNG’s delay in raising the bribery allegations was not satisfactorily explained. Despite allegedly receiving a whistleblower tip-off in April 2024, CNG did not raise the allegations until its Stay Application in May 2025 and did not commenced the Bribery Arbitration until July 2025. Meanwhile, it took active steps in the related arbitrations that affirmed the contracts. This delay was inconsistent with any genuine belief in the seriousness of the alleged fraud. [17]

(iv) The Court found that the evidence adduced in support of the bribery allegations was weak and contradictory. This supported that the Bribery Arbitration was a vexatious tactic designed to delay enforcement rather than a genuine claim. [18]
 
(D) Key Takeaways

Implications

 
This case is significant on the following grounds:
 
(1) Exclusive Recourse and Absolute Time Limit

The three-month time limit to challenge an arbitral award under Section 81 of the Ordinance is absolute. The Court has no discretion to extend it, even where fraud is discovered after the arbitral award. The statutory regime provides the sole and exclusive route to challenge an arbitral award seated in Hong Kong. This exclusivity cannot be circumvented by framing a challenge as a new and independent cause of action in a fresh arbitration. Any attack on an award, whether direct or indirect, must be brought before the supervisory court within the prescribed time limits.

(2) Inconsistent Conduct Precludes Relief

A party cannot simultaneously affirm a contract by seeking benefits under it and later seek to rescind it on the ground of fraud. Where a party takes active steps in ongoing proceedings that are consistent with the validity of the contracts and awards, such as pursuing claims under the same agreements, it will be precluded from later mounting a challenge based on alleged fraud. Such inconsistent conduct amounts to an abuse of process.

(3) Allegations of Fraud will be Scrutinized by the Court

Serious allegations of fraud/ illegality do not automatically entitle a litigant to reopen final proceedings. The threshold for setting aside a judgment or award on the ground of fraud is very high. Unexplained delay in raising such allegations and weak or contradictory evidence will support a finding that the challenge is vexatious and designed to delay enforcement rather than a genuine claim.

Practical Guidance

The above case provides valuable guidance for parties seeking to challenge an award and drafting arbitration agreements.
 
(1) For Parties Drafting Arbitration Agreements
 
The arbitration agreement must clearly designate the seat and confirm that the courts of the seat shall have exclusive supervisory jurisdiction over any challenge to an award.
 
(2) For Parties Seeking to Challenge an Award

(a) Act within three months: The clock starts running from the date on which the party making the application received the award. There are no exceptions.

(b) Do not affirm the contract or arbitral awards if you have doubts: If you believe the underlying contract and/or arbitral awards were procured by fraud, you must immediately stop taking steps that rely on their validity, for example, pursuing claims under the same agreement, or seeking benefits thereunder. Failure to do so will likely constitute an abuse of process and bar any subsequent challenge.

 

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[1] https://hkiac.org/arbitration/what-is-arbitration/

[2] https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=177649

[3] G, G v. CNG and SIL, [2026] HKCFI 902, date of judgment: 11 February 2026, §3

[4] Ibid, §4

[5] Ibid, §14

[6] Ibid, §11

[7] Ibid, §15

[8] Ibid, §2

[9] Ibid

[10] G, G v. CNG and SIL, [2026] HKCFI 902, date of judgment: 11 February 2026, §31-§32

[11] Ibid, §40

[12] Ibid, §45

[13] Ibid, §51

[14] Ibid, §60

[15] Ibid, §108

[16] Ibid, §111

[17] Ibid, §132

[18] Ibid, §163