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Since January 2026, China International Economic and Trade Arbitration Commission (“CIETAC”) officially launched a regular publication of selected cases. Through its official website and WeChat official account, CIETAC will periodically and continuously publish representative arbitration cases, presenting arbitration “in action” with broad coverage and in-depth content, helping enterprises enhance risk prevention capabilities, promoting exchanges between China and the world in arbitration culture, and leading to an overall improvement in the credibility of arbitration. CIETAC will, through institutional innovation, unleash the energy of seventy years of arbitral practice and provide reliable solutions for global commercial dispute resolution with “China’s arbitration wisdom”.
Case Overview
This case concerns the recognition and enforcement of a CIETAC arbitral award in the Hong Kong Special Administrative Region of the People’s Republic of China (hereinafter “Hong Kong”) arising from a sale of goods dispute. The Respondent sought to set aside the court's order granting leave to enforce the award in question, contending that it was unable to present its case during the arbitration proceedings and that enforcement of the arbitral award would contravene public policy. In its judgment, the judge of the Court of First Instance of the High Court of Hong Kong, pursuant to the Hong Kong Arbitration Ordinance (Cap. 609) and the specific circumstances of the case, clarified the criteria for determining whether a party had failed to present its case and defined the manner and scope of an arbitral tribunal's procedural discretion. From the perspective of enforcement, this case offers valuable insights into the timely and reasonable exercise of procedural rights by parties and the balanced and efficient management of proceedings by arbitral tribunals.
Factual Background
From January 2011 to December 2014, the Claimant and the Respondent entered into 64 contracts for the sale and purchase of electrolytic copper, involving a total volume of 100,000 tons of copper and a transaction value exceeding USD700 million.
At the end of 2020, the Claimant commenced arbitration, alleging that the Respondent had failed to fulfill its payment obligations under Contract No. 105 and sought approximately USD25 million in arrears plus liquidated damages for delayed payment. The Respondent, however, contended that, based on the parties' course of dealing and the overall reconciliation of the 64 contracts, the majority of the claimed amount by the Claimant had been set off.
Upon receipt of the Notice of Arbitration and Claimant’s Request for Arbitration, the Respondent applied for an extension to file its defense and evidence. It further requested that its defence be stayed until the Claimant made full disclosure of all relevant documents.
The arbitral tribunal was constituted in May 2021. In June 2021, the tribunal issued procedural orders for the Respondent to file its defense and evidence, which were duly submitted by the Respondent by the end of June 2021. In July 2021, the hearing was held as scheduled, during which both parties confirmed they had no objections to the pre-hearing procedures. Prior to the conclusion of the hearing, the tribunal gave directions for post-hearing procedures. Both parties agreed to conduct written cross-examination on any supplementary evidence submitted after the hearing, and acknowledged that either party could apply for a further hearing if necessary. By early September 2021, the parties had completed the exchange of post-hearing written submissions. In early November 2021, the Respondent applied for a second hearing on the grounds that certain facts remained unclarified. The Claimant expressly objected to this application. Subsequently, the tribunal notified the parties that: "Having considered the circumstances of the case and the parties’ submissions, the tribunal deems a further hearing unnecessary and therefore decides to reject the Respondent's application for a second hearing." On 11 November 2021, the tribunal rendered its award, ordering the Respondent to pay approximately USD21 million for the goods and corresponding liquidated damages for delayed payment.
Thereafter, the Claimant applied to the High Court of Hong Kong for enforcement. The Court subsequently issued an order granting leave to enforce the award (hereinafter the "Enforcement Order").
The Respondent immediately applied to set aside the Enforcement Order. The Respondent argued that without a full examination of all 64 contracts and their performance, the tribunal could not properly adjudicate the payment issues. The Respondent maintained that, given the complexity of the dispute and the voluminous evidence, it lacked sufficient time to prepare its case prior to the first hearing. The Respondent further contended that since new materials were submitted by both parties after the first hearing, the tribunal’s rejection of a second hearing without adequate explanation deprived it of a fair opportunity to present its case, and that enforcing the award under such circumstances would contravene public policy.
Upon deliberation, the Court of First Instance of the High Court of Hong Kong dismissed the Respondent's setting aside application. The Court held that the award was manifestly valid and should be enforced forthwith.
Key Issues
1. Whether the Respondent was deprived of a “reasonable opportunity” to present its case, and what are the legal criteria for determining such a "reasonable opportunity"?
2. Whether the arbitral tribunal was obligated to provide detailed reasons for its decision to refuse a second hearing?
3. How should the arbitral tribunal's procedural discretion be exercised?
Judicial Reasoning and Approach
I. The Opportunity to Present One’s Case
Regarding the Respondent's contention that it was deprived of an opportunity to present its case, the Court held as follows:
First, if the Respondent required further time to prepare for the hearing, it was well within its right to apply for an adjournment. However, the Respondent failed to request additional preparation time or an adjournment either during or before the first hearing, thereby depriving the tribunal of the opportunity to address any alleged procedural irregularities at the time. Consequently, the Respondent is precluded from belatedly claiming a lack of preparation time for the hearing at the enforcement stage, and such a defence by the Respondent is without merit.
Second, Article 42 of the CIETAC Arbitration Rules (2015) stipulates that for evidence submitted after the hearing, written cross-examination may be conducted provided that the parties agree. During the first hearing of this case, both parties, through their respective representatives, expressly consented to the written cross-examination of supplementary evidence submitted after the hearing. Pursuant to the aforementioned Arbitration Rules, the tribunal was fully entitled to exercise its discretion to decline a second hearing for cross-examination on the supplementary evidence.
Third, Section 95(2)(c)(ii) of the Hong Kong Arbitration Ordinance (Cap. 609) allows the court to refuse enforcement of an award if a party was unable to present its case. However, the court must apply the standard of “Due Process” to evaluate whether the fundamental minimum requirements essential to a fair trial were satisfied. In this context, Section 46 of the Ordinance is pivotal, as it mandates that the arbitral tribunal offer the parties a "reasonable opportunity" to present their case and deal with the cases of their opponents. Under this provision, the scope and extent of a party's right to present its case is not entirely unlimited. Exercising such a right must not lead to unreasonable demands or the neglect of other relevant principles, as well as the objective of efficiency and expeditiousness in dispute resolution. The court determines what constitutes a “reasonable opportunity” based on the specific facts and circumstances of each case. Given that the Respondent in this case filed its defence, attended the hearing, and consented to written cross-examination of post-hearing supplementary evidence, the arbitral tribunal cannot be faulted for refusing the Respondent's application for a second hearing. The Respondent was indeed given and did enjoy a reasonable opportunity to present its case.
Fourth, as a general rule, the role of an enforcing court is not to review the substantive merits of an award or to re-examine the arbitral tribunal's findings of fact based on the evidence. However, in the present case, the tribunal’s finding that the parties had not reached any agreement on the set-off of amounts under the 64 contracts further reinforces the reasonableness of the tribunal's decision to refuse the Respondent's application for a second hearing.
Furthermore, the Court also observed that the Respondent had failed to raise any counterclaim regarding the alleged set-off of amounts under the 64 contracts, and therefore the Respondent could not justify its proposal to stay or delay the enforcement of the award pending a new, separate arbitration to be commenced at a later date.
II. On the Arbitral Tribunal's Reasons for Refusing a Second Hearing
Regarding the Respondent's contention that the arbitral tribunal breached due process by failing to provide an adequate explanation for its decision not to hold a further hearing, the Court held as follows:
Decisions rendered by an arbitral tribunal during the proceedings are addressed to the parties themselves, who are inherently familiar with the underlying background and the specific circumstances of their dispute. The manner in which a tribunal provides reasons for a particular issue should be proportionate to the complexity of that issue. Provided these reasons can be understood in their proper context, such reasons need not be exhaustive or lengthy. This is especially true given that arbitration is a private and consensual dispute resolution mechanism, which prioritizes cost-effectiveness and the reduction of complexity and technical difficulty.
Regarding the Respondent's application for a second hearing following the submission of new materials by both parties, the arbitral tribunal stated: "Having considered the actual circumstances of the case and the parties’ submissions, the arbitral tribunal finds a further hearing is unnecessary." The tribunal’s reference to the actual circumstances of the case and the parties' submissions inherently encompasses an assessment of the new evidence and materials, related issues, and the matters addressed by the parties during the first hearing. Such reasoning was both adequate and appropriate, enabling the Respondent with a sufficient basis to understand why its application was declined.
III. On the Arbitral Tribunal's Procedural Discretion
Having determined that the parties were offered a “reasonable opportunity” to present their case in a manner tailored to the substantive circumstances of the dispute, and that the tribunal's procedural decisions were both proportionate to the complexity of the dispute and sufficient to enable the parties to understand, the Court accorded full deference to the tribunal's procedural discretion. The Court held that the arbitral tribunal's decision to decline a further hearing was a case management decision. The tribunal was entitled to make such a decision by taking into account the parties' submissions, the issues in dispute, and the specific circumstances of the case. Absence of any serious breach of natural justice, the court should not easily interfere with or overturn the tribunal's procedural decisions.
Case Insights and Practical Recommendations
Whether a party was offered a "reasonable opportunity" to present its case and whether the tribunal’s procedural powers were properly exercised are relatively common grounds for challenge in the judicial review of arbitration. The reasoning of the High Court of Hong Kong not only reflects a pro-arbitration judicial policy but also demonstrates that CIETAC is professional and rigorous in procedural management. This case offers valuable insights for participants on facilitating fair and efficient dispute resolution, specifically in the following aspects:
First, while the right to present one's case is a fundamental right of parties in arbitration, its exercise is not governed entirely by the party's subjective wishes. It is not an absolute entitlement for a party to make submissions at any time of its own choosing. Rather, this right is circumscribed by the "reasonable opportunity" determined under the objective circumstances of the case. What constitutes a "reasonable opportunity" is a fact-specific inquiry, and the exercise of this right must not result in unreasonable demands or the disregard of the objective of efficiency and expeditiousness of the dispute resolution. Where the arbitral tribunal has already provided a "reasonable opportunity", parties are expected to present their case and adduce relevant evidence in a proactive and timely manner. Any objections to procedural arrangements should also be raised in a timely manner. Failure to raise such objections during the arbitration will generally preclude them from being spported in subsequent judicial review proceedings. If, as in the present case, the parties involved in a complex transactional background and wish to have related disputes resolved together, they should timely initiate counterclaims or corresponding arbitral claims in respect of related disputes. In this regard, Article 14 of the CIETAC Arbitration Rules (2024) introduces provisions for the joinder of additional contracts in arbitration, facilitating the resolution of related contractual disputes in a single proceeding.
Second, to promote the efficient and fair conduct of arbitral proceedings, arbitral tribunals are vested with broad discretion over arbitration procedure. While party autonomy is the cornerstone of arbitration and the parties are the masters of the arbitration, this does not entitle them to act arbitrarily in the arbitration or abuse or delay the proceedings at will. If the parties are able to reach a consensus on the conduct of the procedure that does not contravene mandatory legal provisions, the arbitral tribunal will respect their autonomy. However, in the absence of such a consensus, as in the present case, where the Claimant opposed the Respondent's application for a second hearing, the tribunal must issue procedural rulings promptly and accurately by having regard to the specific circumstances of the case to ensure procedural efficiency and fairness. When ruling on a specific procedural matter, the tribunal's reasoning need not be exhaustive or lengthy; overly detailed reasoning may risk drawing the tribunal into confrontation with the parties and thereby complicating the dispute resolution process. This is particularly true for decisions such as whether to hold a further hearing after the main hearing, which often require comprehensive assessment of the substantive merits of the dispute and are no longer merely a matter of routine procedure.
Third, the role of a court in judicial review is not to reconsider the substantive merits of the award or the tribunal's findings of fact based on the evidence. in this judgment, the reference to the substantive content of the award was intended solely to illustrate the reasonableness of the tribunal's decision to refuse the Respondent's application for a second hearing. Parties should respect the finality and binding nature of arbitration and should avoid treating judicial review as equivalent to an appeal on the merits or a second instance.
*This case overview and the High Court of Hong Kong's judgment have been included in the "Selected Cases Regarding Cross-Jurisdictional Recognition and Enforcement of CIETAC Awards" (hereinafter the “Selected Cases”) edited by China International Economic and Trade Arbitration Commission (“CIETAC”). The Selected Cases is available for reference on the official website of CIETAC under the "Research and References" section.
Source: CIETAC