In K v JX, the Court of First Instance set aside enforcement of a Beijing Arbitration Commission award on public policy grounds after hearing evidence of collusion that had never been put to the tribunal. It has now granted leave to appeal because the point is one of public interest.
The Hong Kong Court of First Instance has granted leave to appeal its decision in K v JX [2026] HKCFI 2854, in which it set aside an order permitting enforcement of a Mainland arbitral award, Conventus Law reports. In K v JX [2026] HKCFI 4344 the court found that K's grounds of appeal had no reasonable prospect of success, but held that the exercise of the court's discretion to refuse enforcement on public policy grounds is a matter of public interest, and granted leave so that the Court of Appeal could consider the question.
The dispute arose from a cooperation agreement for land development, which led the PRC-incorporated company to commence Hong Kong proceedings, Hong Kong Lawyer reports. A settlement agreement, governed by PRC law and containing an arbitration clause referring disputes to the Beijing Arbitration Commission, was signed in the company's name by a former employee who had already resigned, using the company's old seal. The tribunal found no evidence of actual authority, but held that under PRC law it was enough that the counterparty had reason to believe the signatory was authorised, and ordered the company to discontinue the Hong Kong action and pay damages.
On the set-aside application, the court rejected the jurisdictional challenge, since no such challenge had been made in the arbitration and the arbitration agreement was severable from the settlement agreement. On public policy, it held that because the evidence of collusion and bribery emerged only after the award and had never been considered by the tribunal, the enforcement court could and should examine it. After hearing oral evidence from the company's beneficial owner, from K and from K's assistant, the court concluded that K had turned a blind eye to the question of authority and that enforcing the award would be contrary to fundamental conceptions of morality and justice. The former employee's affirmations admitting that he had been bribed were excluded from the evidence after he failed to attend for cross-examination.
Refusing K's argument that it had reopened the tribunal's findings, the court said the deciding factor is whether the question of illegality or corruption had been put to and determined by the tribunal, balancing the public policy in favour of finality against the public policy against illegality. It said it never condones attempts to reargue a case under the guise of public policy, but does not turn a blind eye when serious claims of fraud, corruption and bribery of witnesses are made.
