Companies often choose to resolve disputes by way of international arbitration because awards granted by an international arbitration tribunal may be enforced worldwide. Recognition and enforcement of arbitration awards in domestic courts is one of the most valuable aspects of arbitration proceedings.
In Hong Kong, if a winning party looks to enforce an arbitration award granted by an arbitration institute other than the Hong Kong International Arbitration Centre, it has to rely on the worldwide mutual enforcement of treaty for arbitration – the New York Convention of Enforcement of Arbitral Awards 1958 (the “New York Convention”).
Under the New York Convention, over 150 countries (including the UK, Singapore, Switzerland and the US) agreed to allow the enforcement of arbitration awards from other New York Convention signatories in their respective jurisdictions as if they were local judgments. As long as the parties of the arbitration proceedings are signatories to the New York Convention and there is a written arbitration award, the award will be recognized as binding and can be enforced by the party in any other signatory states or jurisdictions.
As Hong Kong is also one of the signatories of the New York Convention subject to two reservations made by China – the reciprocity reservation and the commercial reservation – the above reciprocity of enforcement is applicable in Hong Kong.
The procedure of enforcing a New York Convention award is stipulated in Division 2 of Part 10 of the Hong Kong Arbitration Ordinance (Cap. 609)(the “HKAO”). Under section 88 of the HKAO, the party seeking to enforce a New York Convention award must produce: (a) the duly authenticated original award or a duly certified copy of it, (b) the original arbitration agreement or a duly certified copy of it, and (c) if the award or agreement is not in either or both of the official languages, a translation of it in either official language certified by an official or sworn translator or by a diplomatic or consular agent.
The enforcement of a New York Convention award may however be refused for a number of reasons set out under section 89 of the HKAO. For instance, it may be refused if the award is in respect of a matter which is not capable of settlement by arbitration under the law of Hong Kong, or if it would be contrary to public policy in Hong Kong to enforce the award.
If you have any questions in relation to the enforceability of an arbitral award, please contact us today for a discussion.