The Good Faith Principle in the Context of the Enforcement of New York Convention Awards: An Analysis of Hong Kong’s Position in Light of the Apparently Conflicting Court Decisions

Abstract

In the recent landmark case Astro v. Lippo, the Hong Kong Court of Appeal adopted an approach of applying the good faith principle in the context of the enforcement of New York Convention awards that departed from the previous approach adopted by the Hong Kong Court of Final Appeal in the Hebei case. This article aims to ascertain Hong Kong’s position on the good faith principle in the situation that led to the apparently conflicting approaches. This is concerned with the situation where an award-debtor could have raised, but failed to raise, objections to challenge the award before the supervisory courts of the seat of arbitration, but applies to resist enforcement of the award before the enforcing court. This article argues that the apparently conflicting approaches should be reconciled by differentiating the grounds of resisting enforcement between jurisdictional and non-jurisdictional grounds. In the author’s view, the good faith principle is not applicable if the ground for objection relates to jurisdiction. The award-debtor can still seek resisting enforcement on jurisdictional grounds before the enforcing court. If the ground does not relate to jurisdiction, a breach of good faith would be established. The award-debtor would then be precluded from raising the relevant points (i.e., factual foundation) relating to the grounds of resisting enforcement that it could have, but did not raise at the supervisory courts of the seat before the enforcing court.