Hong Kong SAR court halts ‘fraud arbitration’, confirming strict limits on reopening awards

The decision reaffirms the jurisdiction’s pro-arbitration stance and commitment to the finality of cross-border deals, according to international arbitration experts at Pinsent Masons.

In the anonymised judgment, the Hong Kong Court of First Instance rejected attempts to reopen a long-running dispute between two transaction partners and ruled that a 2025 “bribery arbitration” was an abuse of process and a breach of the parties’ arbitration agreements.

CNG launched the new arbitration in July 2025, alleging newly uncovered evidence that the transaction partner, known in the ruling as the G parties, had bribed one of its former negotiators. The court was asked to decide whether those proceedings should be restricted and whether enforcement of earlier arbitral awards should be put on hold.

The court refused both requests, finding that CNG’s challenge did not meet the requirements in the framework governing arbitral awards seated in Hong Kong SAR. Under Article 34 of the UNCITRAL Model Law and section 81 of Hong Kong’s Arbitration Ordinance, parties must seek to set aside an award through a single, time limited court application. CNG had already pursued and lost a challenge in 2023, and the deadline to bring any further application had expired.

Allowing a parallel “fraud arbitration” would undermine the finality of arbitration and disrupt commercial certainty for businesses relying on the awards, according to the court.

Karah Howard, an international arbitration specialist at Pinsent Masons, said: “The court’s reasoning is a powerful reminder that Article 34 of the Model Law provides a single, tightly time limited avenue to challenge an arbitral award."

"Parties have three months to bring a setting aside application, even where allegations of fraud later surface. This strict deadline is a debated issue as other jurisdictions, such as the UK, allow the courts discretion to extend the time limit in case of fraud. Singapore's Ministry of Law is currently reviewing the Singapore International Arbitration Act and actively considering if courts should have limited discretion to extend the three-month window in rare cases of suspected fraud or corruption," she said.

 “What is clear from the Hong Kong court’s approach is that parties cannot circumvent the Model Law framework by initiating a fresh arbitration to revisit an award. The judgment sends a welcome and unequivocal signal: Hong Kong courts will not allow enforcement to be derailed by tactical parallel proceedings. That certainty is exactly why Hong Kong continues to be regarded as a safe and dependable seat for cross border enforcement.”

The court held that CNG also failed to establish the high threshold for a fraud-based set aside claim by citing unreliable whistleblower evidence, no proof of deliberate dishonesty, and delays in acting on the alleged information.

Johanne Brocas, an arbitration specialist at Pinsent Masons, said: “fraud-based challenges must meet exceptionally strict legal thresholds, and, in this case, those requirements were not satisfied.

“This ruling clears the way for continued enforcement of the awards, offering reassurance to commercial parties seeking finality in high value disputes," she said.