In Lin Ming and another v Sequedge Investment Inc. and others, unreported, HCA 1900/2011, judgement of Deputy High Court Judge P Ng SC of 8 March 2012, the Hong Kong Court of First Instance allowed an application to stay court proceedings in favour of an arbitration, and consequently declined to grant an anti-arbitration injunction (see Legal update, Power of the Hong Kong courts to grant anti-arbitration injunctions). The court's willingness to stay the court proceedings is in line with the UNCITRAL Model Law and confirms that parties have a viable avenue to restrain parties from continuing with court proceedings which have been brought in breach of an agreement to arbitrate in Hong Kong.

The court also went on to suggest that the Hong Kong courts have jurisdiction, pursuant to the High Court Ordinance, to restrain arbitrations to which the Hong Kong Arbitration Ordinance applies. It remains to be seen whether this position will be affirmed by the higher courts in Hong Kong.

In May 2012, the Hong Kong Court of Appeal upheld an appeal against a decision of the Court of First Instance to set aside an ICC award (see Pacific China Holdings Ltd v Grand Pacific Holdings Ltd, CACV 136/201, discussed in Legal update, Hong Kong Court of Appeal declines to set aside ICC award). The Court of Appeal confirmed that even if there are grounds for setting aside an award under Article 34(2) of the UNCITRAL Model Law, the court still has a residual discretion to refuse to set aside an award, if it is satisfied that the outcome of the arbitration could not have been different.

Although the precise application of the law will vary depending on the facts of each case, this decision does go some way to confirming that the Hong Kong courts are reluctant to interfere in decisions made by an arbitral tribunal, unless it is fully justified in the circumstances.

In July 2012, the Hong Kong Court of Appeal issued another ruling in this dispute, this time in relation to costs (see Legal update, Hong Kong court orders indemnity costs against unsuccessful application to set aside arbitral award). In this decision, the Court of Appeal confirmed that indemnity costs are appropriate where a party unsuccessfully applies to set aside an arbitral award.

In Pang Wai Hak and Chu Sze Sum v 華允鑒 and Xu Xiao Lan HCCT 33/2011, the Hong Kong Court of First Instance refused to set aside an award of the Hong Kong International Arbitration Centre (HKIAC ) (see Legal update, Hong Kong Court of First Instance declines to set aside HKIAC award). In this case, the application to set aside the award was brought on the basis of the last part of Article 34(2)(a)(ii), namely that the losing parties to the arbitration were unable to present their case. The court held that the failure of the arbitrator to provide the parties with an opportunity to address a point (a limitation defence) amounted to a denial of due process. Had the pleading point been the only reason given by the arbitrator to reject the limitation defence, the court would have set aside the award. However, since the arbitrator gave a second, and independent, reason to reject the limitation defence, it was clear to the court that the arbitrator would have reached the same conclusion even if he had ignored the pleading point.

This judgment again confirms the residual discretion of the court to refuse to set aside awards where the tribunal would not have reached a different conclusion even though there has been a violation of Article 34(2) of the UNCITRAL Model Law. It also serves as a reminder that arbitral tribunals must be careful to allow the parties the opportunity to address any points which the tribunal intends to rely on in its final award.

The Hong Kong International Arbitration Centre (HKIAC) is finalising new Administered Arbitration Rules (see Legal update, HKIAC consults on revisions to its Administered Arbitration Rules). In October 2012, the HKIAC published a "near-final" draft of the new rules, and invited comments on that draft by 26 November 2012 (see Legal update, Near-final draft of amendments to HKIAC Administered Rules open for comment). The new rules are expected to come into force in early 2013.

Relatively minor amendments to the Hong Kong Arbitration Ordinance (Cap. 609) are planned in 2013. The Arbitration Ordinance came into effect in Hong Kong on 1 June 2011 (see Legal update, Hong Kong's new Arbitration Ordinance comes into effect). The planned amendments were introduced in a Legislative Council Panel on Administration of Justice and Legal Services on 14 December 2012 (see Proposed Amendments to the Arbitration Ordinance (Cap 609)). Briefly, the amendments would include provisions for emergency arbitrators; changes to taxation of costs of arbitral proceedings; and they also deal with enforcement of Macau arbitral awards.