Litigation & Dispute Resolution

In Gibbins v Tierney [2024] EWHC 2004 (Ch), the High Court reaffirmed the principles that apply when deciding whether there has been unfair prejudice, within the meaning of section 994 of the Companies Act 2006, in a quasi-partnership. This case is a good example of how unfair prejudice rules are applied by the Courts to quasi partnerships in circumstances where one party has allegedly sought to shut out another from management decisions.

The High Court has reaffirmed the strength of protection given to parties seeking to resolve a dispute through reliance on the ‘without prejudice’ rule during negotiations. In FW Aviation (Holdings) 1 Limited v Vietjet Aviation Joint Stock Company, the Court confirms the extraordinary nature of the ‘unambiguous impropriety’ exception and clarifies the ways in which ‘without prejudice privilege’ can be waived. Clare Reeve Curatola and Sanjay Lohano outline the nature and scope of the rule, providing practical tips for commercial parties looking to rely on this privilege whilst negotiating the settlement of a dispute.

In recent years, technology advancement has introduced new methods for contract formation. In particular, the rise of blockchain technology has led to the emergence of “smart contracts”, which are digital contracts which automatically execute transactions when pre-determined conditions are met. This article provides a brief explanation as to what smart contracts are, and examines some of the potential issues that could arise under Hong Kong law when arbitration is used to resolve smart contract disputes.

In SYL v GIF [2024] HKCFI 1324 (date of judgment: 20 May 2024), the Hong Kong Court of First Instance (“the Court”) set aside an Interim Award made by the arbitral tribunal (“Tribunal”) in an HKIAC-administered arbitration. The award related to an unsuccessful jurisdictional challenge made before the Tribunal. A single arbitration was commenced in relation to three separate but related contracts. The Court was required to analyse the meaning and effect of “mutatis mutandis” in a Loan Agreement context / relationship, where two related Security Deeds provided that the dispute resolution provision in the Loan Agreement applied “mutatis mutandis”. The Court agreed with the plaintiff on both of what had been labelled by the parties as (i) the “Compatibility Ground” (that the arbitration agreements in the three contracts are incompatible with one another), and (ii) the “Agreement Ground” (that the composition of the Tribunal was defective because the appointment had not been done in accordance with the parties’ agreement under the three contracts). The Court therefore set aside the Interim Award made by the Tribunal. Following on from our earlier article on AAA, BBB, CCC v DDD [2024] HKCFI 513 (which covered the situation where there is a group of related contracts and two or more of those contracts have different dispute resolution clauses), this case of SYL v GIF addresses the opposite situation where the same dispute resolution provision applies “mutatis mutandis” to separate but related contracts (i.e. purports to have the same dispute resolution clauses but “with all necessary changes having been made”). The case of SYL v GIF demonstrates neatly that the “mutatis mutandis” drafting “shortcut” might not result in disputes in all related contracts being able to be brought in a single arbitration.