Award Writing Skills for Arbitrators: What a Persuasive Arbitral Award Should Contain

The Hong Kong International Arbitration Centre (HKIAC) reported 344 new arbitration cases in 2024, a figure that underscores the city’s continued status as a leading dispute resolution hub. For parties who choose arbitration over litigation, the final award is the only deliverable that matters. A poorly reasoned or procedurally flawed award can undermine the entire process, leading to costly setting-aside applications in the Court of First Instance under section 81 of the Arbitration Ordinance (Cap. 609). The 2025 amendments to Cap. 609, which came into effect on 1 January 2025, introduced stricter timelines for award challenges, reducing the window to challenge an award from three months to 56 days. This change places greater pressure on arbitrators to produce awards that are both substantively correct and procedurally bulletproof from day one. An award that fails to meet the standards of reasoned decision-making risks not only being set aside but also damaging the arbitrator’s professional reputation. This article sets out the essential components of a persuasive arbitral award under Hong Kong law and practice, focusing on structure, reasoning, and compliance with Cap. 609 requirements.

The Legal Framework for Award Content

Statutory Requirements Under Cap. 609

Section 67 of Cap. 609 provides that an arbitral award must be in writing and signed by the arbitrator or arbitrators. The legislation further requires that the award state the reasons upon which it is based, unless the parties have agreed otherwise or the award is made on agreed terms under section 66. The Court of Appeal in Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (In Liquidation) (2011) 14 HKCFAR 1 confirmed that the requirement for reasons is a fundamental element of procedural fairness. An award that contains no reasons, or reasons that are so brief or contradictory as to be meaningless, may be challenged on the ground of serious irregularity under section 81(1)(c) of Cap. 609.

The award must also state the date on which it was made and the place of arbitration, as determined under section 64. The place of arbitration is a legal concept under Hong Kong law, not a physical location. It determines the curial law governing the proceedings and the court with supervisory jurisdiction. For awards made in Hong Kong, the Court of First Instance has exclusive jurisdiction to hear setting-aside applications under section 81.

The Duty to Give Reasons

The common law duty to give reasons in arbitration awards is well established in Hong Kong. The Court of Final Appeal in A v B (2015) 18 HKCFAR 490 held that the standard of reasoning required is not that of a judgment of the High Court. The arbitrator need not address every argument raised by the parties, but must provide sufficient reasoning to enable the losing party to understand why the decision was reached. The court distinguished between a failure to give reasons, which is a serious irregularity, and inadequate or erroneous reasons, which are not grounds for challenge under section 81.

An arbitrator should structure the reasons section to identify the key issues in dispute, summarise the evidence relevant to each issue, apply the applicable law to the facts found, and explain the logical connection between the evidence and the conclusion. The award must demonstrate that the arbitrator engaged with the parties’ submissions, even if the arbitrator ultimately rejects them.

Structural Components of a Persuasive Award

Step 1: The Preamble and Preliminary Matters

Every award should begin with a clear identification of the parties, the arbitration agreement, the governing law, and the constitution of the tribunal. The preamble should state the date of the arbitration agreement, the institution or ad hoc rules under which the proceedings were conducted, and the procedural history in summary form. The award should also confirm that all parties had an opportunity to present their case and that the proceedings were conducted in accordance with the agreed procedural timetable.

The preliminary section should address any jurisdictional objections raised by a party. If a respondent challenges the tribunal’s jurisdiction under section 34 of Cap. 609, the award must rule on that challenge before proceeding to the merits. The tribunal may decide to deal with jurisdiction as a preliminary question or join it to the merits. Either approach is permissible, but the award must make clear which course was taken and why.

Step 2: The Statement of Facts and Issues

The facts section should be concise and focused on the matters in dispute. The arbitrator should set out the factual background that is common ground between the parties, then identify the specific factual issues that remain contested. The award should not reproduce every document in the evidentiary record. Instead, the arbitrator should summarise the key evidence that is material to each issue.

The issues section must identify the legal and factual questions that the tribunal is required to decide. The arbitrator should frame the issues in a manner that corresponds to the parties’ pleaded cases. An award that decides issues the parties did not raise may be challenged on the ground that the tribunal exceeded its mandate under section 81(1)(d) of Cap. 609. The Court of First Instance in Sun Tian Gang v Hong Kong & China Gas (Jiangxi) Co Ltd [2018] HKCFI 2100 set aside an award where the tribunal decided a claim that had not been pleaded by either party.

Step 3: The Reasoning and Analysis

This is the core of the award. The arbitrator should apply the governing law to the facts found and explain the reasoning step by step. The analysis should address each issue separately, with clear findings of fact and conclusions of law. The arbitrator must not leave gaps in the reasoning that require the reader to infer the logical connection between the evidence and the result.

Where the governing law is Hong Kong law, the arbitrator should cite the relevant statutes and case law. For example, in a commercial contract dispute, the award should reference the Sale of Goods Ordinance (Cap. 26) or the relevant common law principles on breach of contract. The arbitrator should explain why a particular legal principle applies to the facts of the case and why alternative arguments are rejected.

The award must also deal with the evidence of expert witnesses if the parties adduced expert evidence. The Court of Appeal in Hong Kong Housing Authority v Hsin Yieh Architects & Associates Ltd (2006) 9 HKCFAR 1 held that an arbitrator must give reasons for preferring one expert’s opinion over another. The award should identify the areas of agreement and disagreement between the experts, evaluate the methodology and assumptions of each expert, and explain the basis for the tribunal’s conclusion.

Step 4: The Dispositive Section and Costs

The final section of the award must state the tribunal’s decision clearly and unambiguously. The dispositive part should set out the amount of any monetary award, the currency in which it is payable, and the date from which interest runs. Under section 69 of Cap. 609, the tribunal may award interest at a rate it considers appropriate, unless the parties have agreed otherwise. The award should state the rate of interest and the basis on which it is calculated.

The costs section must address the costs of the arbitration and the legal costs of the parties. The tribunal has discretion under section 74 of Cap. 609 to allocate costs between the parties. The award should explain the basis for the costs order, including any departure from the general principle that costs follow the event. If the tribunal makes a costs order on an indemnity basis, it must give specific reasons for doing so.

Common Pitfalls in Award Writing

Failure to Address All Claims

An award that fails to decide all claims submitted to the tribunal may be challenged as incomplete under section 81(1)(f) of Cap. 609. The arbitrator should check the pleadings and the procedural orders to ensure that every claim, counterclaim, and set-off has been addressed. If the tribunal decides that a claim is not maintainable, the award should state that the claim is dismissed, not simply omit it.

Inconsistent Findings

Inconsistent findings of fact or law undermine the persuasiveness of an award. The arbitrator should review the award for internal consistency before issuing it. For example, an award that finds that a party repudiated a contract but then awards damages on the basis of a wrongful termination is internally contradictory and may be set aside for serious irregularity.

Procedural Irregularities

The award must reflect that the proceedings were conducted in accordance with the parties’ agreed procedures and the mandatory provisions of Cap. 609. The arbitrator should verify that the award was signed by all members of the tribunal, or that the majority award is clearly identified as such. Under section 67(3) of Cap. 609, if a dissenting arbitrator does not sign the award, the award must state that the dissenting arbitrator failed to sign and the reason for the failure, if known.

Practical Takeaways for Arbitrators

1. Structure the award with a clear preamble, statement of facts, issues, reasoning, and dispositive section, and verify that each section complies with sections 67 and 69 of Cap. 609.
2. Provide sufficient reasoning to enable the losing party to understand the basis for the decision, addressing each pleaded issue and explaining the logical connection between evidence and conclusion.
3. Review the award for internal consistency before issuing it, ensuring that findings of fact and conclusions of law are not contradictory.
4. Address all claims, counterclaims, and costs issues in the dispositive section, and state the rate of interest and the basis for any costs order.
5. Check the procedural history to confirm that the award reflects the correct place of arbitration, the applicable rules, and the parties’ agreed procedural timetable.

This does not constitute legal advice. Consult a solicitor for your specific case.