Hebei Jikai Industrial Group Co Ltd v Martin

The case before the court involved Hebei Jikai Industrial Group Co Ltd (HJI) applying for an order setting aside an arbitral award, or alternatively, seeking a declaration that the report produced by an auditor was not in accordance with the terms of the Deed. Martin, the respondent, sought an order that the retained funds be paid to him in accordance with the Deed. The dispute originated from a settlement agreement (the Deed) executed on 24 November 2012, which involved HJI purchasing shares in RUS Holdings from Martin and other parties, and included provisions for an audit and arbitration concerning potential breaches of duty by Martin.

The primary legal issues before the court were whether the arbitral award could be set aside under article 34(2)(a)(ii), (a)(iv), and (b)(ii) of the Model Law on International Commercial Arbitration, and whether the court should grant a declaration that the auditor's report was not an audit report for the purposes of the Deed. Additionally, the court needed to consider whether a declaration sought by HJI would amount to a collateral attack on the arbitral award.

The court found that the arbitral tribunal had correctly interpreted the Deed and did not err in finding that the audit report did not satisfy the requirements of clause 10.1. The court emphasised the principle of judicial restraint in international commercial arbitrations, indicating that courts should not intervene unless provided for by the Model Law. The court also noted that a negative jurisdiction finding by the arbitrator is final under s 16(3) of the Model Law. Consequently, the court dismissed HJI's application to set aside the arbitral award and ordered the release of the retained funds to Martin in accordance with the Deed. The court further ordered HJI to provide any necessary approvals, consents, and authorities for the release of funds and to pay Martin's costs.