Hong Kong court upholds deemed service of notice of arbitration and rejects enforcement challenge

The Hong Kong Court of First Instance has rejected a challenge to the enforcement of an Asian International Arbitration Centre award on the basis of an alleged lack of notice of the appointment of the arbitrator and the arbitral proceedings (CC v. AC [2025] HKCFI 855).

The decision draws upon international jurisprudence and helpfully illustrates key legal principles in relation to effective notice of arbitral proceedings and related challenges to awards.

Background

The Singapore award creditor had sent the notice of arbitration to the address specified in the contract (pursuant to which it was "deemed to be sufficiently served"), an additional postal address and a general email address both listed on the award debtor's website, and a director's email address obtained from the website of the Hong Kong Securities & Futures Commission.

The Hong Kong award debtor nevertheless argued that it had not received actual notice of the proceedings by any of those means, because the postal addresses were out-of-date, personnel changes meant it had no access to the email addresses, and one of the email addresses might have ceased to be operable and accessible.

Decision

Mimmie Chan J dismissed the award debtor's contention that "proper notice" had not been given, such that it had been denied an opportunity to present its case, and enforcement of the award would be contrary to public policy and should be refused, pursuant to section 86(1) of the Hong Kong Arbitration Ordinance.

The court's reasoning reflected the following propositions:

1. The concept of "proper notice" does not necessarily require "actual notice" and is instead concerned with fairness. The usual question will be whether the notice given was "likely to bring the relevant information to the attention of the person notified", taking into account any contractually agreed notice provisions, agreed dispute resolution mechanism and relevant institutional rules (OUE Lippo Healthcare Ltd v. David Lin Kao Kun [2019] HKCFI 1630). The court took account of authorities to similar effect from other UNCITRAL Model Law jurisdictions (Singapore, Ontario and Germany) as well as the USA;
2. Where a party specifies a service address in a contract, that party will generally be taken to have agreed, and the counterparty will be entitled to assume, that documents sent to that address will be received by or at least brought to the notice of the addressee. The award creditor in this case having sent the notice of arbitration to the address for the award debtor specified in the contract, therefore, the notice was deemed to have been delivered and the manner of service satisfied all the criteria set out in the authorities on "proper notice";
3. Presumed or deemed receipt can be rebutted, but only by "appropriate, sufficient and credible evidence of actual non-receipt", with the burden of proof lying squarely on the party seeking to show that it did not have actual notice. That party cannot rely for this purpose, moreover, on its own breach of contract or failure to communicate updated contact details. In the present case, any non-receipt was entirely the fault of the award debtor (which had inserted an outdated address in the agreements, breached a contractual obligation to notify the award creditor of its change of address, and failed to maintain and access its own emails and website), and in any event the award debtor's allegation of non-receipt was discredited by the award creditor's evidence (which included a "read receipt" for one of the email addresses to which the notice had been sent); and
4. Where alternative means of service have been attempted (in addition to service according to the contract), this will be relevant to the court's assessment of whether "proper notice" has been given. By sending the notice of arbitration to an additional postal address and two separate email addresses (none of which were required by the contract), the award creditor had taken all reasonable endeavours, and all the steps reasonably calculated, to bring the notice to the attention of the award debtor.

The court concluded that the award debtor's claim of non-receipt was neither credible nor reliable. Holding the parties to their agreement was not a denial of due process, there was no evidence of bad faith on the part of the award creditor (contrary to an allegation by the award debtor), and it would be grossly unfair for the award debtor to be permitted to avoid the effect of the award by taking advantage of its own wrongs. The challenge to enforcement was therefore dismissed, with indemnity costs awarded against the award debtor.

Comment

At the drafting stage, parties can maximise the prospects of effective service in the event of a future arbitration by including "deemed service" provisions in their contracts or satisfying themselves that equivalent language is included in the selected arbitration rules (see for example Article 3 of the HKIAC Rules) or the arbitration legislation of the chosen seat (see for example section 10 of the Hong Kong Arbitration Ordinance, giving effect to Article 3 of the UNCITRAL Model Law).

Once a dispute arises, claimant parties may also wish to consider whether it would be prudent, in the circumstances of the case, to complement contractually-mandated service with additional means of service, with a view to minimising risks in relation to allegations of non-receipt.

Although the contract in this case included "deemed service" language of the type which is commonly seen in commercial agreements, the court stressed in its reasoning that a party is entitled to assume that effective service can be achieved at an address stated for that purpose by its counterparty in the contract.

This may suggest that, even without a contractual deeming provision, service at an address specified in the contract could constitute "proper notice" for the purpose of resisting challenges to awards (provided the award debtor could not prove actual non-receipt for reasons not attributable to it). This may be of limited relevance in practice, however, given the incorporation of deeming provisions in many institutional rules and national arbitration laws.

The outcome in this case is consistent with that in Pan Ocean Container Suppliers Co Ltd v. Spinnaker Equipment Services Inc [2024] HKCFI 1753 (reported here), in which the court found that written communications were deemed to have been received under the HKIAC Rules and rejected an "entirely opportunistic" argument by the award debtor that it was not given proper notice of the proceedings.

In contrast, the "very exceptional" circumstances in Sun Tian Gang v. Hong Kong & China Gas (Jilin) Ltd HCCT 46/2015 led the court to set aside an award against an award debtor who had been in prison when the notice of arbitration was delivered, with arguments based on deeming language being rejected because "[f]ictional notice deemed by purported delivery to an address at which the recipient could not be found and, in this case, was known by [the award creditor] not to have been found, cannot be 'proper notice'."