In the recent Hong Kong case of Friendship Shipping and Trading SA v IVL Dhunseri Polyester Company SAE, the Plaintiff applied for an anti-suit injunction (ASI) to restrain the Defendant from continuing Egyptian legal proceedings against it, contending that the parties had agreed to arbitrate any dispute in Hong Kong per the arbitration agreement contained in a charterparty that was incorporated by reference in the bills of lading.

One of the issues examined by the Court was the threshold that had to be established by a party seeking an ASI as to the existence of a valid and binding arbitration clause.

Relying on a recent decision of the Singapore Court of Appeal in Asiana Airlines Inc v Gate Gourmet Korea Co Ltd, the Plaintiff submitted that it only needed to establish a prima facie case of a binding arbitration clause, and full argument on the issue could be left to the arbitral tribunal.

The Defendant, on the other hand, argued on the basis of English and Hong Kong authorities that the party seeking an ASI must establish a high degree of probability that there was an arbitration agreement that governed the relevant dispute. The rationale for the high probability test is that if an ASI is granted it will likely be final because, in practice, it will end the foreign proceedings for at least sufficient time to enable the arbitration to take place.

The Court agreed with the Singapore appellate authority, holding that the Plaintiff only needed to satisfy the Court of a prima facie case of an arbitration agreement. The Court took the view that where it is asked to order interim relief to facilitate the arbitral tribunal to determine both its competence and process, and to make decisions as the tribunal sees fit, the Court is acting as a filter for the arbitral tribunal and the rationale for the higher standard falls away.

Whilst the Court in this case found that the Plaintiff satisfied the prima facie threshold as to the existence of an arbitration agreement, on the facts – having regard to various circumstances including delay and lack of clean hands – the Court refused to grant the ASI.

Harneys does not advise on Hong Kong law. Practitioners should be aware of the lower threshold that might, going forward, be applied by the Courts of Hong Kong in an ASI application.