Hong Kong court backs HKIAC’s early determination procedure and rejects multi-ground challenge to summary award

The background

In A v B1 and B2 [2026] HKCFI 2444 (HCCT 113/2024 and 153/2024), the parties (anonymised in the judgment) were involved in an M&A transaction under which the respondents acquired corporate vehicles holding real estate assets through a merger agreement and a sale and purchase agreement. The transaction incorporated “Holdback Amounts”, being a portion of the consideration withheld from the claimant pending satisfaction of specified conditions by a contractual long stop date, which can be extended by the parties in writing “each acting reasonably”.

When a number of the conditions remained unsatisfied, the claimant commenced an HKIAC arbitration alleging, among other things, that the respondents had acted unreasonably in refusing to extend the long stop date, and that on a proper construction, the agreements did not entitle the respondents to retain the holdback amounts. 

The respondents invoked the EDP under Article 43 of the 2018 HKIAC Administered Arbitration Rules (the “2018 HKIAC Rules”), seeking summary dismissal of the claimant’s claims on the basis that they were “manifestly meritless as to both law and fact”. Following written and oral submissions during a one-day virtual hearing, an experienced tribunal issued a Partial Award dismissing all claims with prejudice, followed by a Final Award on Costs. The entire dispute was resolved without a full evidentiary hearing.

The challenge falls flat

The claimant applied to the Hong Kong Court to set aside both the partial award and the cost award under section 81 of the Arbitration Ordinance (Cap 609) (which incorporates Article 34 of UNCITRAL Model Law), raising challenges on the basis that (1) the tribunal failed to comply with the agreed procedures set out in Article 43 of the 2018 HKIAC Rules in that no point(s) of law or fact had ever been identified; (2) the tribunal exceeded its jurisdiction as it was only invited to determine “some points of construction” and no point of fact was submitted to the tribunal for determination by way of the EDP; (3) the Partial Award is in conflict with Hong Kong public policy; and (4) the Final Award on Costs was rendered without giving the claimant a fair and reasonable opportunity to respond as a result of the tribunal’s decision to refuse the request for a breakdown of the claimed fees. Deputy High Court Judge Jonathan Wong rejected all grounds and dismissed both applications.

On procedural compliance, the court held that the points of law and fact for early determination were plainly identified in the respondents’ EDP application through its headings and structure. Article 43 of the 2018 HKIAC Rules does not prescribe a particular level of precision; how concisely the points must be stated is a matter of case management within the tribunal’s discretion. The decision to proceed with EDP under Article 43.5 of the 2018 HKIAC Rules was characterised as “procedural” or “case management”. A tribunal is a “master of his own procedure” and it is not necessary for reasons to be given regarding why a particular procedural decision has been made.

Notably, the court further held that even though the respondents’ failure to propose any form for the EDP for adoption by the tribunal in their EDP application was a breach of Article 43.4(c) of the 2018 HKIAC Rules, such breach was “at most a minor and technical breach”. The claimant had waived its right to raise such complaint as it did not raise any such complaint in its written submissions or during the virtual hearing.

The claimant had been afforded multiple fair and reasonable opportunities to be heard, including written EDP submissions, further submissions, and an oral hearing at which it argued the dispute was unsuitable for early determination. There was no entrenched right to full discovery or a plenary oral hearing.

The ground of excess of jurisdiction was construed narrowly. The court found that the respondents had not abandoned any part of their EDP application and that the issues determined fell squarely within the claimant’s own submission to arbitration.

The court reaffirmed that the public policy ground is not a catch-all and that set-aside will only be granted where an award is repugnant to basic notions of justice. The Partial Award was read generously and found to address the factual dimensions of the dispute coherently. The court further noted, “if the tribunal has dealt with the issue in any way, it does not matter whether it has dealt with it well, badly or indifferently”.

Finally, the challenge to the costs assessment fared no better. The court endorsed the tribunal’s “broad-brush” approach and confirmed that a tribunal is not required to follow court taxation scales or to demand a granular per-stage breakdown from the successful party.

What this means for practitioners and parties 

• The Hong Kong court will look to uphold arbitral awards made under the EDP proceedings and will not second-guess a tribunal’s case-management decision to allow summary disposal. The parties can use the EDP with confidence that the Hong Kong court will support the tribunal’s autonomy and will not readily set aside awards rendered through summary procedures. 
• The points of law or fact under Article 43 of the 2018 HKIAC Rules may be identified by structure and headings in a party’s submissions.  While the court accepted that a high degree of precision is not mandatory, well-organised submissions reduce the risk of procedural challenge.
•  “Minor and technical” breaches of the procedural formalities do not amount to serious violations of the procedure sufficient to set aside the award under Article 34(2)(a)(iv) of the Model Law. The decision underscores the importance of raising procedural complaints timely before the tribunal. Objections not raised at the time are likely to be treated as waived and will not found a set-aside application.
• Tribunals are not bound by court taxation scales and may assess costs on a broad-brush basis consistent with international arbitration practice. Those resisting a costs claim should focus merits arguments on reasonableness and proportionality rather than demanding line-item breakdowns as a procedural lever.

This decision provides welcome clarity and real confidence for users of HKIAC arbitration, particularly in disputes arising out of M&A, funds, and leveraged finance transactions, on how and when to deploy the EDP. The judgment cements Hong Kong’s position as a robustly pro-arbitration seat where curial intervention remains the exception.

The parties to HKIAC arbitrations should be encouraged to make use of the EDP to save costs and time where the case is suitable for such applications. This decision also demonstrates the Hong Kong court’s determination to support the summary determination of entire cases through EDP proceedings, a move that will further enhance efficiency in arbitration proceedings seated in Hong Kong.

Authored by Byron Phillips and Eva Yao.