Hong Kong constitutionality challenge – leave to appeal denied

The Hong Kong Court of Appeal (CA) has rejected an application for leave to appeal to the Hong Kong Court of Final Appeal from its previous judgment that upholds the constitutionality of s.81(4) of the Arbitration Ordinance (Cap. 609), under which a party who wishes to appeal a Court of First Instance (CFI) decision on setting aside an arbitral award must obtain leave to appeal from the CFI.

In its 18 December judgment (HCMP2472/2014), the CA decided that it is not reasonably arguable that section 81(4) of the Arbitration Ordinance is unconstitutional.  It did not regard itself as wrong to have had regard to the alternative scheme in Schedule 2 of the Arbitration Ordinance and the existence of the residual jurisdiction in assessing the proportionality of section 81(4).  The CA repeated that, viewed in light of the overall statutory scheme of the Arbitration Ordinance, section 81(4) clearly comes within the range of reasonable options to achieve the legitimate aims of the Arbitration Ordinance.

This judgment confirms the limited rights of appeal in arbitration cases and the constitutionality of the relevant provisions. It is now clear that there will be only one chance for a losing party in an application to set aside an arbitral award to apply for leave to appeal, subject to the residual jurisdiction of the CA to review the process of the CFI in refusing leave (which will be rarely invoked).

Herbert Smith Freehills acted for the successful Respondent in the arbitration and court proceedings.

For further information, please contact Justin D'Agostino, Global head of dispute resolution, Dominic Geiser, Partner, Martin Wallace, Senior Associate, Carolyn Suen, Associate, or your usual Herbert Smith Freehills contact.