Hong Kong is a major legal and financial center, serving as the world’s gateway to the People’s Republic of China (the “PRC”) by virtue of its unique position as a Chinese territory but with an autonomous legal system based on the English common law. Hong Kong is bound by the New York Convention, and has enacted legislation governing arbitration based on the United Nations Commission on International Trade Law (“UNCITRAL”) Model Law (the “Model Law”). This internationalized regime, coupled with an independent and efficient judiciary that has generally adopted a pro-arbitration stance, has made Hong Kong one of the most popular seats in the world for international arbitration.
Hong Kong’s approach to iura novit curia in arbitration is reflective of its pro-arbitration policy; courts have generally upheld awards even if the arbitral tribunal considered facts, law, or issues that had not been raised by the parties. However, Hong Kong courts have not hesitated to intervene by setting aside or refusing to enforce awards in which arbitrators have taken excessive liberty in exercising their decision-making power, at the expense of the parties’ due process rights and/or their right to delineate the scope of the tribunal’s mandate. This reflects the view that arbitration is first and foremost a consensual form of dispute resolution, founded upon the will of the parties. An over-enthusiastic application of iura novit curia could undermine party autonomy and thereby reduce the attractiveness of arbitration in Hong Kong as an alternative to other methods of dispute resolution.