<center><span class="news-text_italic-underline">RusChemAlliance v Linde [2026] HKCA 763</span> — Hong Kong Court of Appeal (Chow JA and Fung J), 27 April 2026</center>
The Hong Kong Court of Appeal has refused to grant leave to appeal against a first instance decision making an award debtor's set-aside application conditional on its compliance with a prior anti-suit injunction. The Court confirmed the availability of "Hadkinson" orders in the context of arbitral award challenges, including where the challenge is advanced on the public policy ground of bias, and affirmed that an award debtor has no unqualified right to a hearing before the Hong Kong courts where it remains in deliberate and continuing breach of a prior court order.
The underlying dispute arose from a project to construct a gas processing complex in Russia. The Russian complex owner and a German contractor had entered into an EPC contract providing for disputes to be resolved by HKIAC arbitration seated in Hong Kong. Following the imposition of EU sanctions relating to Russia, the contractor suspended work on the project. The owner purported to terminate the contract, obtained freezing relief in Russia and commenced Russian court proceedings against the contractor and its parent company, which had guaranteed the contractor's obligations.
The contractor and its parent company commenced HKIAC arbitrations in Hong Kong, which were subsequently consolidated and obtained an interim anti-suit injunction from the Hong Kong court, later made permanent. Notwithstanding that injunction, the owner obtained a Russian judgment against the contractor and its parent company for approximately EUR 693 million and RUB 44.5 billion, subsequently upheld on appeal.
The HKIAC tribunal issued a partial award dismissing the owner's jurisdictional challenge and declaring that the owner had breached the arbitration agreements by obtaining freezing relief and commencing proceedings in Russia. The HKIAC subsequently upheld a challenge by the owner to the presiding arbitrator on grounds of undisclosed circumstances giving rise to justifiable doubts as to his independence and impartiality and a substitute presiding arbitrator was appointed. The owner then applied to the Hong Kong court to set aside the partial award on public policy grounds, alleging bias or apparent bias.
The contractor and its parent company applied to the Hong Kong Court of First Instance for an order that the owner's set-aside application should not be heard unless and until the owner had taken all reasonable and practical steps to comply fully with the relevant paragraphs of the anti-suit injunction. Such an order, known as a "Hadkinson" order, permits the court to refuse to hear a party that is in breach of a prior court order until that breach has been remedied.
The Court of First Instance applied the five conditions for a Hadkinson order established in <span class="news-text_italic-underline">CCMJ v SSM [2022] HKCA 173</span>, namely that: (i) the respondent is in contempt of court; (ii) the contempt is deliberate and continuing; (iii) the contempt creates an impediment to the course of justice; (iv) there is no other realistic and effective remedy; and (v) the order is proportionate and goes no further than necessary. Finding all five conditions satisfied, the Court granted the Hadkinson order with indemnity costs against the owner. The owner's subsequent applications for leave to appeal and a stay of the order pending appeal were refused at first instance and renewed before the Court of Appeal.
The Court of Appeal dismissed both the renewed application for leave to appeal and the application for a stay, articulating six key propositions.
<span class="news-text_medium">Restricted scope for appellate interference:</span> A decision to grant or refuse a Hadkinson order involves an exercise of discretion. The Court of Appeal would not intervene unless the judge had erred in law, misdirected herself on applicable legal principles, misapprehended material facts, or taken into account irrelevant matters or failed to consider relevant ones, such that the conclusion was plainly wrong and outside the generous ambit within which reasonable disagreement was possible.
<span class="news-text_medium">No positive duty to determine a public policy challenge:</span> The owner argued that the Court was under a positive duty under Article 34(2)(b)(ii) of the <span class="news-text_italic-underline">UNCITRAL Model Law</span> to consider whether the partial award was tainted by bias and should be set aside. The Court of Appeal rejected that argument, holding that the power to set aside an award under Article 34(2) is permissive rather than mandatory and that no such duty, even if it existed, would override the Court's power to make a Hadkinson order where the applicable conditions were met.
<span class="news-text_medium">No disproportionate interference with the right of access to court:</span> The owner contended that a Hadkinson order should be confined to cases of abuse of process and that the order in the present case disproportionately impaired its constitutional right of access to the court. The Court of Appeal rejected that contention. The owner's ability to pursue the set-aside application depended on its compliance with the anti-suit injunction, a matter entirely within its own power and control.
<span class="news-text_medium">No requirement for a direct link between contempt and barred proceedings:</span> The owner argued that a "sufficient nexus or connection" between the contempt and the barred proceedings was a necessary condition for a Hadkinson order and that no such link existed in the present case. The Court of Appeal rejected both limbs of that argument, holding that a sufficient nexus is not a condition for the order but rather a factor relevant to whether the contempt impedes the course of justice.
<span class="news-text_medium">Impediment to the course of justice established:</span> The contempt arose from the owner's continued pursuit of the Russian court proceedings, which concerned the same substantive matter as the arbitration. The judge had been entitled to find a sufficient nexus between the anti-suit injunction and the partial award under challenge, both being based on or closely related to findings concerning the arbitration agreement covering the dispute. The owner's breach of the anti-suit injunction undermined the enforcement of the Hong Kong court's orders and prejudiced the contractor and its parent company in a manner that impeded the course of justice.
<span class="news-text_medium">Indemnity costs upheld:</span> The Court of Appeal rejected the owner's argument that the first instance judge had wrongly applied the default indemnity costs rule in arbitration set-aside cases. The indemnity costs order had been made by reason of the owner's deliberate and continuing contempt, for which the judge had accepted no valid excuse. It was open to the judge to take a serious view of that conduct and there was no basis for appellate interference.
This decision is a significant affirmation of the Hong Kong courts' willingness to deploy Hadkinson orders as a tool for upholding compliance with anti-suit injunctions in the arbitration context. It makes clear that an award debtor has no unqualified right to mount a challenge before the Hong Kong courts where it remains in deliberate and continuing breach of a prior court order and that this position holds even where the challenge is grounded in public policy on the basis of bias.
Several broader points merit attention. First, the grounds for challenging arbitral awards before the Hong Kong courts are narrow and strictly construed and parties should not approach set-aside applications as a routine recourse. Second, the Court of Appeal's reasoning suggests that the same approach would apply to other public policy-based challenges, not merely those founded on bias. Third, it is notable that the set-aside application in this case followed a rare successful arbitrator challenge at the HKIAC, only four such challenges were recorded across all HKIAC arbitrations in 2025, none of which succeeded.
Parties considering award challenges before the Hong Kong courts should ensure full compliance with any outstanding court orders before commencing or continuing such proceedings. Failure to do so risks not only the suspension of the challenge itself but also adverse costs consequences on the indemnity basis.
