GAO HAIYAN V KEENEYE HOLDINGS LTD

Hong Kong Court of First Instance, Mr Justice Reyes, 12 April 2011

Arbitration - Enforcement of award - Med-arb - Whether appearance of bias from mediation - Curial court dismissing appeal against an award - Whether enforcing court estopped from refusing enforcement - Public policy

Arbitration proceedings were commenced in Xian before three arbitrators. The claimants sought an order setting aside share transfer agreements entered into by the parties. The tribunal suggested, in accordance with the rules of the Xian Arbitration Centre, that the parties should engage in "med-arb" so that there would be an attempt to resolve the dispute by mediation. After the first arbitration hearing, there was a meeting between one of the arbitrators, a representative of the arbitration centre and an associate of the respondents, at which the associate was asked to "work on" the respondents to accept a settlement under which they would pay RMB250 million to the claimants. This was rejected. The arbitration continued and the tribunal found in favour of the claimants, ordering the revocation of the share transfer agreements. The respondents appealed to the Xian Intermediate Court, alleging bias or apparent bias on the part of the tribunal, but the application was dismissed. The claimants sought to have the award enforced in Hong Kong. Reyes J refused enforcement.