Welcome to the second edition of Baker & McKenzie’s International Litigation and Arbitration Newsletter for Asia Pacific in 2012.
This edition features an article on the ongoing conflict within the China International Economic and Trade Arbitration Commission (CIETAC) and its implications, as well as key international arbitration and litigation rulings in Australia, Hong Kong, Philippines and Singapore.
We hope you will find this Newsletter useful. For related questions, concerns and subscription requests, please send an email to me or Johanna Morden.
Emmanuel S. Buenaventura
Rift within CIETAC Brings Uncertainty to Arbitration Agreements Selecting CIETAC Shanghai or Shenzhen Sub-Commissions
By Gary Seib, Anthony Poon and James Kwan, Hong Kong
The China International Economic and Trade Arbitration Commission (CIETAC) recently declared the suspension of the Shanghai and Shenzhen Sub-Commissions for accepting and administering arbitration cases against its will. This conflict has led to uncertainties on which institutions will administer CIETAC Shanghai and CIETAC Shenzhen arbitrations, and which CIETAC rules will apply – the 2012 Rules, Shanghai Rules, or 2005 Rules.
In this article, Gary Seib, Anthony Poon and James Kwan discuss the potential implications to arbitration disputes and the actions to consider in hedging these issues.
Court Decision Imparts Guidance on Public Policy
By Sarah Lancaster and Erika Hansen, Sydney
Sugar Australia Pty Limited vs. Mackay Sugar Ltd. (2012) QSC 38. The Courts of Queensland set aside an arbitrator's award for breach of natural justice, following recent amendments to the International Arbitration Act (Cth) 1974, finding a failure to comply with natural justice as a breach of public policy sufficient to allow a party to resist enforcement of a foreign arbitral award.
Court of Appeal's Refusal to Set Aside ICC Award Confirms Hong Kong's Pro-enforcement Approach
By Jasmine Chan, Hong Kong
Pacific China Holdings Ltd (In Liquidation) vs. Grand Pacific Holdings Ltd (CACV136/2011). The Hong Kong Court of Appeal reinstated an arbitral award which the Court of Instance set aside. Concerned with “the structural integrity of the arbitration proceedings,” the Court of Appeal states that the remedy of setting aside is not an appeal and the court will not consider the substantive merits of the dispute or the correctness of the award, whether concerning errors of fact or law.
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Too Much of the Same Thing is a Legal Disaster
By Andrew Chin, Hong Kong
Lin Ming and Fujian Yuansheng vs. Sequedge ASA Capital (Cayman) Ltd & Others (HCA 1900/2011). In the first case of its kind before the Hong Kong Court of First Instance, the Court tackles the issue of parallel proceedings in court and in arbitration. The Court upholds its mandatory obligation under Sec. 20 of the Arbitration Ordinance to stay court proceedings in favor of arbitration.
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Party’s Refusal to Arbitrate will not Stay the Proceedings or Bar Issuance of Arbitral Awards
By Emmanuel S. Buenaventura, Manila
Cebu Water District vs. Mactan Rock Industries, G.R. No. 172438 (July 2012). The Philippine Supreme Court rules that the Construction Industry Arbitration Commission has jurisdiction over reformation of contracts and a party’s refusal to arbitrate will not stay its proceedings or the issuance of an arbitral award.
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Foreign Corporation Doing Business in the Philippines without a License may Maintain Suit against an Estopped Domestic Corporation
By Lemuel D. Lopez, Manila
Steelcase, Inc. vs. Design International Selections, Inc., G.R. No. 171995 (April 2012). The Philippine Supreme Court declares that a foreign corporation doing business in the Philippines without the requisite license may sue in Philippine courts against a Philippine citizen or entity that had contracted with and was benefited by it. Likewise, a party is estopped from challenging the personality of a corporation after the party has acknowledged the same by entering into a contract with it.
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Court of Appeal Limits Extrinsic Evidence in Interpreting Performance Bond
By Gerald Kuppusamy, Singapore
Master Marine AS vs. Labroy Offshore Ltd Ors (2012) SGCA 27. Singapore’s Court of Appeal, recognizing that assurance of payment is a crucial attribute of a first demand performance bond, rules that courts should be restrained in examining the external context and extrinsic evidence when interpreting a performance bond and rejects the argument of unconscionability.