## Facts

- Polytek Engineering Co. Ltd. (Polytek) agreed to sell equipment to Hebei Import & Export Corp. (Hebei) for producing rubber powder.
- After delivery, Hebei alleged the equipment was defective and began arbitration before the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing.
- During the arbitration, the tribunal appointed experts to inspect the equipment.
- The chief arbitrator took the appointed experts to Hebei’s facility for an inspection attended by Hebei’s technicians but conducted without prior notice to Polytek and in Polytek’s absence.
- An expert report was produced and placed before the tribunal; Polytek knew of the inspection and report during the arbitration but did not seek to contest the report within the arbitration process.
- CIETAC issued an award in Hebei’s favor.
- Polytek sought to resist the award. In proceedings in the PRC supervisory court (Beijing), Polytek’s challenge did not succeed; the award remained in force.
- Hebei sought to enforce the award in Hong Kong under the Arbitration Ordinance (Cap. 341), which implements the New York Convention scheme for Convention awards.
- At first instance, the Hong Kong court maintained enforcement. On appeal, Polytek argued that the inspection arrangement showed apparent bias or fundamental unfairness and persuaded the Hong Kong Court of Appeal to set aside enforcement on public-policy grounds.
- Hebei appealed to the Hong Kong Court of Final Appeal (CFA).

## Issues

1. When may a Hong Kong court refuse enforcement of a New York Convention award on the ground that enforcement would be contrary to public policy (s. 44(3) Arbitration Ordinance / Article V(2)(b) New York Convention)?
2. Can a party rely on public policy at the enforcement stage based on procedural complaints it knew during the arbitration but did not raise then, and did not raise in its timely challenges (including before the supervisory court and at first instance in Hong Kong)?
3. How should the enforcing court treat an attempt to reframe a party-based Convention defense (such as inability to present a case) as a public-policy objection after earlier failures?

## Decision

- The CFA allowed Hebei’s appeal.
- The CFA reversed the Hong Kong Court of Appeal and restored the first-instance order enforcing the CIETAC award in Hong Kong.
- The CFA held that enforcement was not contrary to Hong Kong public policy within s. 44(3) / Article V(2)(b).
- The CFA held that Polytek was precluded (by its conduct and timing) from raising a public-policy challenge based on facts it knew long before, yet did not raise in the arbitration, before the Beijing court, or before the Hong Kong judge at first instance.

## Legal Principles

- New York Convention enforcement is the default position; refusal is confined to the limited grounds stated in the implementing legislation and is construed narrowly.
- The public-policy exception (s. 44(3) / Article V(2)(b)) is reserved for cases where enforcement would offend Hong Kong’s most basic notions of morality and justice; it is not a route for general review of arbitral procedure.
- Where the resisting party knew the relevant facts during the arbitration (and certainly by the time of supervisory-court or first-instance enforcement proceedings) but did not raise them, the court may treat the later public-policy objection as barred by waiver/estoppel-type principles.
- A party should not be permitted to hold back a known procedural complaint and deploy it only after losing elsewhere; appellate courts should be wary of such late-stage shifts.
- The public-policy ground should not be used to give a second chance to arguments that, in substance, fall within the party-invoked Convention defenses (such as inability to present a case) and could have been raised earlier.
- An enforcing court should be slow to refuse enforcement on procedural-fairness grounds where the award has already survived challenge in the supervisory jurisdiction at the seat.

## Conclusion

The Hong Kong Court of Final Appeal restored enforcement of Hebei’s CIETAC award, holding that the public-policy exception to enforcing Convention awards is tightly confined and that Polytek could not rely on alleged unfairness from the ex parte expert inspection after it failed to raise that known complaint during the arbitration and in earlier challenge stages.


Hebei Import & Export Corp. v. Polytek Engineering Co. Ltd., 1 H.K.L.R. 665, 38 I.L.M. 681 (1999)