Arbitration'Set Aside Of Award'Multi-Tiered Arbitration Agreement (T v B)

• Published date: 20 January 2022
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Compliance, Contracts and Commercial Law, Arbitration & Dispute Resolution
• Law Firm: Stephenson Harwood
• Author: Mr Andrew Rigden Green

Arbitration analysis: An arbitration provision contained conditions precedent to the commencement of arbitration. These conditions were not met and arbitration was commenced in any event. The jurisdiction of the tribunal was challenged and the tribunal ruled that it did not have jurisdiction. The plaintiff (T) applied to the Hong Kong court to set aside the award under section 81 of the Hong Kong Arbitration Ordinance Cap 609 (AO) (which incorporates article 34 of the United Nations Commission on International Trade Law Model Law (the Model Law)). The defendant (T) also commenced a fresh action before the Hong Kong court for the same dispute as referred to arbitration. B defended the set-aside action and applied for a stay of the court action. The Hong Kong court refused the application to set aside the award and granted a stay of the court action in favour of arbitration. The court affirmed the principle set out in C v D and Kinli Civil Engineering Ltd v Geotech Engineering Ltd, that non-compliance with pre-arbitration procedures or conditions goes to admissibility of the claim not to the jurisdiction of the tribunal, Written by Andrew Rigden Green, partner, head of International Arbitration in Great China, at Stephenson Harwood, Hong Kong.

T v B [2021] HKCU 6361 (subscription to Lexis+ US required)

What are the practical implications of this case?

1. multi-tiered arbitration agreements have long been accepted as valid by the court. If a condition precedent raises a time bar issue this does not defeat the tribunal's jurisdiction to hear the claim. It only provides a defence to a claim
2. failure to follow the steps set out in multi-tiered arbitration agreements or conditions precedent to arbitration will not normally invalidate the jurisdiction of the arbitration tribunal. Questions of compliance with such steps are questions that go to the admissibility of the dispute before the tribunal
3. parties may agree that pre-arbitral procedural requirements go to the tribunal's jurisdiction but to do so will require clear and unequivocal language
4. a tribunal's decision on parties' compliance or non-compliance with pre-arbitration procedures or conditions is final and not subject to the court's review

What was the background?

On 25 April 2018 B, as the main contractor engaged for certain reclamation and advance works, entered into a sub-contract ('Sub-contract') with T for part of the works. The main contract and Sub-contract were 'back-to-back', with the same completion...