Competition Commission v W. Hing Construction & others [2022] HKCA 786 (judgment date: 2 June 2022) concerned an appeal from the first Hong Kong judgments concerning pecuniary penalties for contraventions of competition rules. The Court of Appeal held that pecuniary penalties for contraventions of competition rules are to be assessed based on the economic activities and conduct of the undertakings who are answerable for the contraventions, and that the legal or natural persons (entities) constituting such undertakings jointly and severally are liable for the pecuniary penalties. Accordingly, the Court of Appeal allowed the appeals by the Competition Commission (Commission) against two judgments in which the Competition Tribunal (Tribunal) reduced the pecuniary penalties ordered against the respondents in recognition of the respondents’ limited participation in the anti-competitive conduct because they had passed down various obligations through subcontracting and partnership arrangements in return for a portion of the value of sales related to the contravention.

Hong Kong court continued the validity of a Mareva injunction granted in connection with the enforcement proceedings of a CIETAC award, and dismissed an application for security or fortification in support of the cross-undertaking as to damages. This case confirms the Hong Kong courts’ pro-arbitration and pro-enforcement approach. G v X highlights that Hong Kong courts generally are more prepared to grant Mareva injunctions and other relevant orders in aid of enforcement proceedings of arbitral awards, in comparison with similar applications made at the interlocutory stage in court litigation. The judgment also illustrates how Hong Kong courts will apply the usual tests, and exercise its discretions, in respect of the grant of Mareva injunctions in the context of enforcement proceedings. The confirmation that parties may seek simultaneous enforcement in both the Mainland and Hong Kong under the Supplemental Arrangement is welcomed as a recognition of the continuous development of judicial cooperation and mutual legal assistance between Hong Kong and Mainland China, an important factor contributing to Hong Kong’s rightful place as an attractive seat of arbitration, particularly for cross-border disputes with elements relating to Mainland China.

In AW and others v PY and another [2022] HKCFI 1397 (judgment date: 13 May 2022), a Hong Kong court held that it has no power to extend the time to challenge an arbitral award under Article 34 of the Model Law, as adopted by Section 81 of the Arbitration Ordinance of Hong Kong. The present case is important in establishing that Hong Kong courts do not have the power to extend the time for making a setting-aside application under Article 34 of the Model Law. This serves as a reminder to parties seeking to challenge an award under the Article to act in a prompt and timely manner.

In Arjowiggins HKK2 Ltd v X Co [2022] HKCFI 128, after dismissing the claims and declining to grant the pleaded remedy, the tribunal invited submissions from the parties on an alternative remedy and ultimately granted relief that was not asked for in the pleadings. The respondent in the arbitration applied to set aside the award under Article 34(2)(a)(iii) of the UNCITRAL Model Law as incorporated by section 81(1) of the Arbitration Ordinance. In a judgment dated 12 January 2022, the Hong Kong Court of First Instance set aside the award on the ground that the award contained decisions on matters beyond the scope of the parties’ submission to arbitration.

Sampling and extrapolation is a common approach for presenting evidence in complex construction and commercial disputes. The exercise involves identifying and examining a properly representative set of sample allegations, and extrapolating the results of the detailed investigation into the entire pool of allegations. In Building Design Partnership Ltd v Standard Life Assurance Ltd [2021] EWCA Civ 1793, the UK Court of Appeal confirmed that, as matter of principle, in appropriate cases, a claimant may plead its claims on an extrapolated basis.

In 廣東順德展煒商貿有限公司 v Sun Fung Timber Company Limited [2021] HKCFI 2407, a Hong Kong court set aside an enforcement order in respect of an arbitral award, after finding that the shareholder-director of the respondent had colluded with or was assisted by the claimant to misuse the arbitral process and procure the award to further his own personal interest.

It is well-established in Hong Kong that the test for determining the validity of an opposition to a winding-up petition is whether the petition debt is disputed in good faith on substantial grounds. In Sun Fung Timber Company Limited and 廣東順德展煒商貿有限公司 [2021] HKCA 1660, the Hong Kong Court of Appeal confirmed that the same test applies in respect of a petition debt that is based on an arbitral award.

In the anonymised case of T v B [2021] HKCFI 3645, the High Court of Hong Kong ruled that a challenge concerning the non-compliance with a condition precedent for commencing arbitration (“pre-arbitration condition”) is a challenge of admissibility, rather than a challenge of jurisdiction. This is the second recent decision in Hong Kong to adopt the admissibility vis-à-vis jurisdiction distinction, affirming it status as part of Hong Kong arbitration law. The pre-arbitration condition in question in T v B was a restriction against commencing arbitration before the construction project is completed (“pre-completion restriction”). Pre-completion restrictions are common in construction and infrastructure contracts in Hong Kong. The court also commented on the nature and validity of such restrictions.

On 12 October 2021, the Competition Tribunal (“Tribunal”) handed down its judgment on the merits of the first private action in Hong Kong for a contravention of a competition rule (“contravention”). This case concerns an alleged contravention, which was raised as a defence in two High Court actions. The Court of First Instance (“CFI”) transferred the allegation to the Tribunal for determination. In the 12 judgments published over the course of three years, the CFI, the Tribunal and the Court of Appeal ruled on many important substantive and procedural issues. Our previous post (Part 1 of 2) provided an overview of the substantive issues. This post (Part 2 of 2) will discuss the procedural issues relating to the nature of the case as proceedings transferred from the CFI to the Tribunal, and the approach taken by the Tribunal in respect of confidential documents and information.