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　　The court held that a party to an arbitration relying on breach of arbitration rules should do so promptly; it should not wait and see how its claims turn out before pursuing his complaint; nor should it proceed with the arbitration as if there had been compliance.  As such, the Respondents should not have only submitted to the tribunal a supplemental submission after the private meeting, or attended a second hearing before the tribunal without making a complaint. The court also held that the attack by the Respondents against the Applicants’ integrity was not a substitute for a complaint about bias of any sort or impropriety against the tribunal or the Secretary General of the arbitral body. For these reasons, the Respondents are deemed to have waived their rights to complain about bias.

　　The court pointed out that, had the complaint been raised, action might have been taken by the tribunal or the People’s Court where the arbitral body situates to remedy the situation, both of which would have been in a much better position to ascertain facts to decide on the issue of bias. The court ruled that although the refusal by the People’s Court where the arbitral body situates to set aside the award for bias was not binding on Hong Kong court, and despite no estoppel resulted from the aforementioned Court’s decision, Hong Kong court was entitled to give serious consideration to the aforementioned Court’s decision in deciding whether to enforce the award.

　　Issue 3

　　On a careful interpretation of the views expressed in Hebei Import & Export Corp v Polytek Engineering Co Ltd, the court was of the view that apparent bias alone may be sufficient to justify refusal to enforce an award, though a party seeking to resist enforcement on this ground has to reach a higher threshold than the one for doing so on actual bias, and the court should be slow to exercise such discretion.

　　Issue 4

　　The court assessed the relevant facts and found that there was no apprehension of apparent bias based on the “fair-minded observer”.  The court held that although one might share the learned Judge’s unease about the way in which the mediation was conducted because mediation is normally conducted differently in Hong Kong, whether that would give rise to an apprehension of apparent bias, may depend also on an understanding of how mediation is normally conducted in the place where it was conducted.  In this context, due weight must be given to the decision of the People’s Court where the arbitral body situates refusing to set aside the award.

　　The court reiterated that enforcement of an award should only be refused if to enforce it would be contrary to the fundamental conceptions of morality and justice of the forum, which is Hong Kong in the present case. Accordingly, the court should not refuse to enforce an award in Hong Kong solely because  mediation-arbitration in the form of a private meeting might give rise to an appearance of apparent bias in Hong Kong.

　　IV.Decision

　　Appeal allowed.

　　V.Significance

　　The court held that a party to an arbitration relying on breach of the arbitration rules should do so promptly; it should not wait and see how its claims turns out before pursuing his complaint, or proceed with the arbitration as if there had been compliance.

　　Enforcement of an award would only be refused if enforcement would be “contrary to the fundamental conceptions of morality and justice” of the forum.  The court respects the usual way of conducting mediation in the forum where the mediation takes place and would not invoke the public policy grounds lightly solely because it is conducted differently from the way it is conducted locally.

　　CASE No.3： Xiamen Xinjingdi Group Ltd v. Eton Properties Ltd & another

　　[2009] 4 HKLRD 353;

　　CACV 106/2008 & CACV 197/2008

　　I.Brief Facts

　　The 1st and 2nd Appellants, two Hong Kong companies, were the sole shareholders of Legend Properties (Hong Kong) Co Ltd (“Hong Kong Legend”), and part of the Eton Group. Hong Kong Legend wholly owned a Mainland company which owned land in Xiamen (the “Property”).

　　The Applicant, a Mainland company, agreed to pay RMB 120 million to the Appellants for the right to develop, operate and to receive profits from the Property; and the Appellants agreed to transfer to the Applicant their shares in Hong Kong Legend and to deliver the Property to the Applicant (the “Agreement”). The Agreement also contained an arbitration clause.