In the recent case, Arima Photovoltaic & Optical Corporation v Flextronics Computing Sales and Marketing (L) Ltd, CACV 194/2012, 4 June 2014, the Court of Appeal dismissed an appeal by the Plaintiff seeking to set aside an arbitral award on the basis that the arbitral tribunal’s ruling did not constitute a reasoned award and therefore breached Articles 34(2)(a)(iii) and (iv) and 34(2)(b)(ii) of the UNCITRAL Model Law on Arbitration which was given the force of law by the old Arbitration Ordinance (Cap.341).
At the arbitration, although the Plaintiff succeeded in its claim, it was held liable to the Defendant on some of the Defendant’s counterclaims. The Plaintiff sought to set aside the award in respect of the quantum of the Defendant’s counterclaims on the basis that the award was not reasoned i.e. it had not disclosed the basis on which the quantification of the Defendant’s losses in respect of the counterclaim was arrived at. The Court of First Instance dismissed the Plaintiff’s application and the Plaintiff then appealed to the Court of Appeal, which upheld the decision of the Court of First Instance, holding as follows:-
This is another case where the Court in Hong Kong rejected a party’s challange to enforcement of an arbitral award and ordered them to pay indemnity costs. Where a party challenges the sufficiency of reasons given by the arbitral tribunal for its decision, it is clear that the Court will not consider those reasons in a vacuum and will instead have regard to the manner in which the matter was dealt with at the arbitration. Here, where the form of the arbitration involved an adversarial process, with statements of case, evidence, cross-examination and submissions from both sides, in the absence of any challenge by the Plaintiff to matters put forward by the Defendant, the arbitrators were entitled to conclude that the Defendant’s case was made out.