Giving due and fair notice of arbitral proceedings is critical when commencing an arbitration, as a failure to do so can affect the validity and enforceability of any arbitral award. Under Article 34(2) of the UNCITRAL Model Law, adopted by section 81(1) of the Arbitration Ordinance (Cap. 609), the Hong Kong court may set aside an award if the applicant proves that it was not given “proper” notice of the proceedings or the appointment of the arbitrator. This is also one of the grounds in section 86(1) on which the court may refuse enforcement of a New York Convention award.
In CC v AC [2025] HKCFI 855, the Defendant (D) sought to set aside an order of the Court of First Instance granting leave to the Plaintiff (P) to enforce an award due to lack of proper notice of the arbitral proceedings. The court dismissed D’s application because D failed to prove that it was not given proper notice. The court’s decision provides helpful guidance on the applicable principles to the proper notice requirement under the Model Law and Arbitration Ordinance.
Factual Background
P and D entered into a series of Master Service Agreements in 2018 and 2020. Under the Agreements, D managed a trust fund with P’s money to generate returns and pay them monthly to P. However, D failed to pay various sums to P.
In February 2023, P commenced an arbitration against D in the Asian International Arbitration Centre by serving a Notice of Arbitration (NOA). The NOA was served on D by registered mail to Address A, an address which was stated in the Agreements as D’s address and its “principal address”. P also served the NOA by registered mail to Address B as well as by email to a general and a specific email address. P had obtained Address B and the general address from D’s website and the specific address from a letter that was posted on the website of the Securities and Futures Commission (SFC).
D’s registered office in Hong Kong was at Address A until October 2018, then at Address B until October 2022 and thereafter at Address C.
The Agreements contained a notice provision which required that any notice, request or demand under the Agreements to be in writing and “shall be deemed to be sufficiently served” if sent “by registered post addressed to the other party’s address” stated in the notice provision. For D, the provision stated Address A. It also provided that the notice shall be deemed to have been received upon the expiry of two days after posting the registered letter.
D claimed that it had not received the NOA or any other documents sent by registered post because its registered office was no longer at Addresses A or B in February 2023 when the NOA was served. D claimed it no longer had any tenancy at these two addresses, that it had no control of or access to either of them, and that the NOA sent to these addresses could not have reached D.
D further claimed that it had not received such documents by email because none of the two email addresses used by P was among D’s three “official” email addresses at the SFC’s Public Register. Although the general address might have been tied to D’s website, D lost access to the website in around June 2023 as a result of non-payment of maintenance fees due to a change of D’s management in late 2022. Further, D no longer had any employee or agent who knew of, or had access to, the specific address.
P submitted that it had no knowledge or control of these matters which were all internal problems of D. These alleged problems, which led to D’s alleged ignorance of the service of the NOA, could not be accepted as valid or good reasons, nor were they sufficient for D to discharge its burden of proving, that it had no proper notice of the arbitration.
The court’s findings
Under section 86(1) of the Ordinance, enforcement of a Convention award “may” be refused if the party against whom it is invoked proves that it was not given “proper” notice of the proceedings or the appointment of the arbitrator. But even if this ground is established, the court has a residual discretion to enforce the award.
The court had previously held in Sun Tian Gang that “due and fair notice” of proceedings should be given to the parties and that the party seeking to invoke the ground may rebut any presumption or deemed notice by credible evidence that it had in fact not received “proper” notice.[1]
The court first considered various authorities from different Model Law jurisdictions highlighting the fact that under the Model Law, “proper notice” does not necessarily mean actual notice.[2] The court then set out these key principles relevant to P giving due and fair notice to D:
- When a party states an address in a contract for the specific purpose of serving notices and documents upon it under the contract, its intention and agreement must be that documents sent in the prescribed manner to the stated address can and will be brought to its notice and attention. The counterparty is entitled to assume that the purpose of the provision can be achieved, and has no reason to doubt that the stated address is not correct.
- Where the parties have agreed upon the means of service, their agreement shall prevail because the parties had specifically and consensually stated the manner in which, and the address to which, documents should be served upon them. The parties must thus have agreed and acknowledged that documents sent to the address stated would be received by them, or would be brought to their notice even if they might not be at the address indicated.
- At the very least, a party would have knowledge that documents would be sent to the address it indicated and in the manner it specified, such that it should take the necessary steps to ensure that documents sent in the agreed manner would be brought to its notice. If a party ignores the agreed contractual service provisions, turning a blind eye to its duty to notify its counterparty of any changes in its address, or if it takes the risks of ignoring such provisions, then it has no ground to complain.
Applying these principles to D’s case, the court found that D failed to show that it had in fact not received “proper” notice:
- The NOA was sent to Address A, which was the principal address in the Agreements for service of process. D never notified P that this address was no longer to be used or that its address for service of documents had changed. The NOA sent to Address A was thus deemed to have been received by D upon expiry of two days of posting it as per the notice provisions.
- The court agreed with P that P had taken all reasonable endeavours to bring the NOA to D’s attention.
- An applicant cannot rely on its own breach of the contractual service provisions, or its failure to communicate a change of address for service, to claim that a document had not been validly served at the stated address. Similarly, D could not claim any right or advantage resulting from its own breach of the notice provisions in the Agreements.
- D’s failure to maintain its website and remove Address B and the general email address cannot be P’s concern or fault. P could not be blamed for not knowing that D could no longer access its website and that D had no staff to check the general address for incoming emails.
- Any presumed or deemed receipt can only be rebutted by appropriate, sufficient and credible evidence of actual non-receipt. The court considered that D’s claim of non-receipt was not credible or reliable. In fact, P adduced evidence to show that two months after it emailed the NOA to the specific email address, it sent a test message to that address which returned a read receipt to P shortly thereafter.
The court concluded that there was proper service of the NOA on D and any non-receipt by D was entirely its own fault.
The court added that even if D had established that it was not given proper notice, the court would have exercised its residual discretion to enforce the award. On the facts and evidence, it was D’s own fault in specifying an incorrect and outdated address in the Agreements, in ignoring emails sent to its advertised email addresses, and in failing to maintain its website and email addresses. By contrast, it would be grossly unfair to P if the court permitted D to avoid the effect of the award by taking advantage of its own wrongs.
The court dismissed D’s application and ordered D to pay P’s costs on the indemnity basis, which is the usual basis in Hong Kong where an application is unsuccessful in challenging an arbitration agreement or an award or its enforcement.
Takeaways
This case is an important reminder that parties must pay attention to, and comply with, contractual notice provisions and to update their counterparties of any changes if they have agreed to do so. Attention should also be given to contractual deeming provisions, including deeming provisions in arbitration rules which parties have incorporated into their contract by reference.
A party’s failure to comply with notice provisions can result in the use of an outdated address for service of process and other important documents. This can have far reaching adverse consequences for a non-compliant respondent claiming it was not given proper notice of an arbitration.
In addition to serving a notice of arbitration on a respondent in accordance with any agreed method of service, a claimant should also consider taking all reasonable endeavours to bring the notice to the respondent’s attention.
[1] Sun Tian Gang v Hong Kong & China Gas (Jilin) Ltd (2016) 5 HKLRD 221.
[2] See OUE Lippo Healthcare Ltd v David Lin Kao Kun [2019] HKCFI 1630at ¶16; DBX v DBZ, SICC No 10 of 2023 (15 November 2023);Tianjin Dinghui Hongjun Equity Investment Partnership v Sha Du & Ran Du (Ontario Supreme Court of Justice, 20 March 2023).
