ARTICLE
2 September 2025

The Unappealable Order: Interim Measures In Arbitration

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In the decision of W v Contractor [2024] HKCFI 1452, the Hong Kong Court of First Instance dismissed an application for leave to appeal against an interim injunction granted by an arbitrator.
Hong Kong Litigation, Mediation & Arbitration

Introduction

In the decision of W v Contractor [2024] HKCFI 1452, the Hong Kong Court of First Instance dismissed an application for leave to appeal against an interim injunction granted by an arbitrator. This ruling underscores the distinction between an arbitral "award" and an interim order, reinforcing the principle of minimal judicial intervention in arbitration proceedings. The case highlights that even if labeled as an "award", a decision granting interim measures to preserve the status quo is not subject to appeals on questions of law under Schedule 2 to the Arbitration Ordinance (Cap. 609) ("AO").

Background

The dispute arose from a construction contract between the Plaintiff (the "Employer") and the Defendant (the "Main Contractor"). The contract included an arbitration agreement that opted into Schedule 2 of the AO, allowing for appeals on questions of law arising from arbitral awards. Additionally, the Main Contractor had provided an on-demand performance bond issued by a bank in favor of the Employer, which was governed by Hong Kong law and contained an exclusive jurisdiction clause in favor of the Hong Kong courts.

A dispute over the contract led the Main Contractor to commence arbitration against the Employer in Hong Kong. The Employer subsequently made demands for payment under the bond, prompting the Main Contractor to seek urgent interim relief from the arbitrator to restrain further calls on the bond.

In November 2023, the arbitrator granted the Main Contractor's application for interim measures under Articles 17 and 17A of the UNCITRAL Model Law (as incorporated by sections 35 and 36 of the AO). The decision restrained the Employer from demanding payment under the bond and was titled "Award and Reasons In Respect of Applications for Interim Measures".

The Employer challenged the decision, arguing that it constituted an "award" appealable under sections 5 and 6 of Schedule 2 to the AO. The Employer sought leave to appeal on three questions of law, including the interpretation of "claim" under Article 17A of the UNCITRAL Model Law and whether the bond's exclusive jurisdiction clause ousted the arbitrator's power to grant the injunction.

Legalframework

Under the AO, the parties may opt into Schedule 2 to permitappealson questions of law from arbitral awards. However, the key issue is whether a tribunal's decision qualifies as an "award" (appealable) or an interim order (generally not appealable). The Court drew on principles from the English case ZCCM Investments Holdings v Kansanshi Holdings [2020] 1 All ER (Comm) 132, which emphasize substance over form in classification. Relevant factors include:

·The form and label of the decision (relevant but not conclusive);

·The nature of the issues decided (substantive rights vs. procedural matters);

·The finality of the decision (whether it disposes of claims finally or is interlocutory and variable); and

·How a reasonable recipient would view it in context.

Interim measures under Articles 17 and 17A of the UNCITRAL Model Law aim to maintain the status quo and arewithinthe tribunal's procedural discretion, aligning with the AO's objective of fair and speedy resolution without unnecessary expense.

Court'sdecision

The Court rejected the Employer's contention that the decision was an "award" for the following reasons:

·Despite the "award" label, the decision was interim in nature: it could be varied or revoked, did not determine substantive rights or liabilities under the contract, and did not render the arbitrator having performed his work;

·The injunction merely preserved the status quo pending the final arbitral award, consistent with interim measures under the Model Law;

·The Court distinguished this from a decision as to the jurisdiction, which may be reviewable under Article 16(3) of the Model Law (section 34 AO), but held that appeals on points of law under Schedule 2 apply only to true awards;

·Comparisons were made to Singapore (CXG v CXH [2023] SGHC 244) and Australian (Resort Condominiums International Inc v Bolwell (1993) ALR 655) authorities, which support non-appealability of interim orders; and

·The application for leave to appeal was dismissed, with costs awarded on an indemnity basis to the Main Contractor.

Takeaway

This decision reaffirms Hong Kong's pro-arbitrationstance by limiting judicial interference in interim arbitral measures. Parties should note that labelling a decision as an "award" does not make it appealable if its substance is interlocutory. For those involved in arbitrations under the AO, especially with opt-in provisions for appeals, it is crucial to distinguish between final awards and procedural orders. Delays caused by unwarranted appeals may attract adverse costs orders, normally on an indemnity basis. Parties are advised to seek legal specialist advice early to navigate such distinctions effectively.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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