Articles

Dispute Resolution

Dispute Resolution

Give Me My Personal Data!

Monday, 09 October 2017 13:32

By Senior Associate, Carmen Tang

1. What is a Data Access Request (“DAR”)

In the course of business dealings, your company may have collected, held, processed or used the personal data of employees or other individuals. These people are entitled to request your company to supply them with a copy of the personal data held (the “requestor”). This is called a data access request (“DAR”)  and is a core right contained in the Personal Data (Privacy) Ordinance (“Ordinance”).

2. Complying with a DAR

a. When your company receives a DAR, it should:

(i) ascertain the identity of the requestor;

(ii) assess whether it holds the relevant personal data; and

(iii) respond within the statutory time limit.

Personal Data?

b. A requestor is not entitled under a DAR to access data which is not personal data or personal data not belonging to him. To constitute personal data of an individual, the data must firstly relate directly or indirectly to the individual. Secondly, it must be possible from such data to directly or indirectly determine the identity of the individual.

For example, in a performance appraisal report where the appraising officer states his opinion about the aptitude and performance of the appraisee, such opinion will constitute the personal data of the appraisee. On the contrary, recorded opinion about the performance of a property management company expressed by an owner during an owners’ meeting will generally not constitute the personal data of that owner.

Holding relevant Personal Data?

c. If your company holds the relevant personal data, it should supply a copy of the requested data in an intelligible form and within 40 calendar days after receiving the

DAR, unless specific exemption applies.  If the Privacy Commissioner concludes that there is a breach of the Ordinance after investigation, he may serve an enforcement notice on the data user concerned directing it take steps to remedy the situation and where appropriate, to prevent any recurrence. Non-compliance of an enforcement notice is an offence which may result in a fine and imprisonment.

d. If your company does not hold the requested data, it is still required to inform the requestor in writing within the 40-day time limit that it does not hold the data.

e. If your company has already destroyed the requested data it is required to inform the requestor that it no longer holds the data. To avoid any suspicion of bad faith, your company may explain the reason for destroying the data to the requestor.

Should you provide “All personal data”?

f. Where the description of the requested data is too generic, especially where there have been extensive dealings between your company and the requestor during which a large amount of personal data has been generated, your company should seek clarification from the requestor . If the requestor fails to supply the information reasonably requested for locating the requested data, your company is entitled to refuse to comply with the DAR.

g. Having said that, your company may not simply rely on the fact that the request is made in too broad or generic terms to refuse to comply with a DAR. If you are aware of and can reasonably locate the requested data without any further specification from the requestor, the data user should comply with the DAR.

3. Charge for Complying with a DAR

a. Your company may impose a fee for complying with a DAR which should not be excessive, and should not charge a fee on a commercial basis. It should clearly inform the requestor what fee, if any, will be charged as soon as possible and in any event not later than 40 days after receiving the DAR.

b. Fees that will be considered excessive or not directly related to and necessary for the compliance of a DAR could include fees that exceed the cost of compliance, e.g. costs of seeking legal advice in relation to the Ordinance or inclusion or your company’s administrative or office overheads.

The Commissioner’s office has provided examples on fees that may be charged for complying with a DAR in its Guidance Note.  Your company may charge the direct costs attributable to the time spent by its staff and the actual out-of-pocket expenses for locating, retrieving and reproducing the requested data for complying with a DAR. For example, if a clerical assistant has spent five hours on retrieving and photocopying the requested data in the course of handling a DAR, the calculation of the labour costs incurred is the hourly rate of his remuneration (including salary and fringe benefits) multiplied by five.  Your company may charge for the labour cost attributable to the time spent on extracting or editing the requested data, provided that such tasks are directly related to and necessary for compliance with the DAR.

4. Refusing to Comply with a DAR

a. Your company should refuse to comply with a DAR if:-

i. it is not supplied with sufficient information to identify the requestor;

ii. it cannot comply with the request without disclosing the personal data of a third party; or

iii. where compliance with the request is prohibited under the Ordinance or any other regulation.

b. Your company may refuse to comply with a DAR if the request is not made in writing using either the Chinese or English language.

c. Your company is obliged to give written notice and reasons for refusal to the requestor within 40 days from receiving the DAR and is also required to keep a log entry containing the particulars of the reasons for the refusal of the DAR for four years.

by Richard Healy

 

On 14th June 2017 the Hong Kong Legislative Council passed the third reading of the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Ordinance. Whilst the Ordinance has not yet come into effect, it is expected to be gazetted and become effective later this year.

This legislation will permit the legalization of the third party funding in relation to arbitration and mediation proceedings in Hong Kong and is expected to provide a considerable boost to Hong Kong's position as an international arbitration centre.

Hong Kong has been careful to ensure that the legislative change is accompanied by relevant safeguards to protect the system from potential abuse and we believe it is a welcome development and will help Hong Kong to maintain its status as one of the world's leading dispute resolution centres.

Clients should now be considering the use of dispute resolution clauses adopting Hong Kong arbitration in commercial contracts, given the prospect of litigation funding being available for the resolution of such disputes by arbitration as opposed to proceeding through the court system.

 

If you would like further information regarding this legislation or any of the issues referred to in this article, please feel free to contact our Richard Healy.

By Anna Chan, Partner

 

When is a validation order required?

When a company is subject to winding up proceedings, the company’s properties including its bank account would be frozen and could not be dispensed with. To gain access to the company’s bank account in the meantime would require a validation order from the Court.

A mere procedural requirement for Solvent Companies?

The Court’s decision in Cheng Eric Tak Kwong v Emagist Group Limited & Others [2012] ruled that in cases where the winding up proceedings is derived from shareholders’ dispute, the Court would usually grant validation order for the company’s expenses made in the ordinary course of business to enable the proper functioning of the company “once the court is satisfied of the solvency of the company and the fact that it has an active and ongoing business.”

The Court is also has the view that the petitioner’s suspicion on how his fellow director ran the company and conducted its affair is not justification to turn an application for validation order more adversarial and complicated than is necessary. Such concerns of the petitioner can be alleviated in the validation order itself by conditions such as the company’s undertaking to provide a regular summary of expenses.

Unreasonable resistance to validation order. Non-sensible decision in case of Solvent Companies can be costly

In a more recent decision, Marrakesh Investments Ltd v Tangiers Holdings Ltd & Others [2016] (Unreported), the Court has further indicated that litigants should give a pragmatic and sensible approach in dealing with validation orders for solvent companies in order to avoid unnecessary urgent applications made to the Companies Court. In the future, the Court will be more inclined to make punitive costs order on indemnity basis if the petitioner does not sensibly consent to validation order.

What OLN can do for you

OLN has abundance of experience in advising and handling shareholders’ dispute and companies’ winding up matters. For a better understanding of how OLN can assist you, please feel free to contact our partner, Anna Chan.

 

By Stephen Chan, Partner

 

Since the case of Cyberworks1 in 2010, the Courts in Hong Kong have viewed third party litigation funding arrangements to be lawful in the context of certain insolvency matters. 

Usually, after granting leave for a liquidator or trustee to enter into a third party litigation funding arrangement, the Court will also make a further order for the affidavit exhibiting the terms of the funding agreement to be sealed and not to be disclosed without leave of the Court.  This has been done on the basis that the terms of funding are generally private and confidential between the funder and the funded party, and should be of no concern to any third party including a party in litigation with the funded party.  As long as the Court did not make any further orders, the funding agreement would remain safe from disclosure to any third parties.

It would therefore be of significant concern if at a later date, despite the contents of the funding agreement being sealed, the Court made a discovery order for a party to disclose their funding agreement to the other party in proceedings.  This is precisely what happened in Enrich Future2.  The facts of the case can be briefly summarized as follows:

  1. The liquidators of Sunlink International Holdings Limited (“Sunlink”) issued proceedings against Deloitte Touche Tohmatsu, the Defendant for alleged negligence.
  2. The writ was extended on 4 occasions (the “Extensions”).  The Court found the number of Extensions to be quite exceptional.
  3. Each of the writ extensions were supported by affidavits (the “Affidavits”) with an accompanying order that the same be kept confidential.  Some of the Affidavits exhibited a litigation funding agreement with a third party.
  4. The writ eventually came to be served on the Defendant some 4 years after the initial issue of the writ.
  5. The Defendant applied to set aside the orders for the Extensions and sought production of the Affidavits, which the Plaintiff produced but with redactions relating to the funding arrangements.

 

In considering whether to order disclosure of the redactions (i.e. the terms of the funding arrangement), the Court considered:

  1. That the funding arrangement was already a matter in the public domain by way of documents accessible in a different set of proceedings which were not sealed.
  2. While normally non-adversarial, the funding arrangement in the present case became an adversarial issue as it formed the basis of the Extensions.

In light of these circumstances, the Court considered the Defendant was entitled to see all of the evidence and ordered that the Affidavits be fully disclosed, including the litigation funding agreements exhibited. 

While we do not consider Enrich Future to stand for the proposition that litigation funding arrangements are generally discoverable in proceedings, we do consider that litigants should take care to (1) keep the litigation funding arrangements away from the public domain and (2) avoid situations where funding arrangements could be made to be a relevant issue in the material proceedings.

[1]           Re Cyberworks Audio Video Technology Ltd[2010] 2 HKLRD 1137

[2]        Enrich Future Limited & Ors v Deloitte Touche Tohmatsu (HCCL 10/2011) 22 June 2016

 

Stephen Chan regularly acts for parties in matters involving third party litigation funding and has successfully applied for Court sanction of a number of third party litigation funding agreements with insolvency practitioners.

 

This article is for information purposes only.  Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual matters.

By Richard Healy & Anson Douglas

 

In an arbitration, it is arguable that the most important actor is the arbitrator, for it is he who handles the dispute through the dispute resolution process till a final settlement or the dispensing of an award. With such a central role, the parties to the dispute have a legitimate expectation that their arbitrator will be independent from any party with an interested outcome in the dispute, and be impartial in determining the issues of the case, without which, there can be no fair trial. As the English court in ASM Shipping Ltd of India v TTMI Ltd of England put it, “[t]here can be no more serious or substantial injustice than having a tribunal which was not, ex hypothesis, impartial, determine parties’ rights.” 

Duty to treat the parties equally, and be independent and impartial

It is because the arbitrator plays such a crucial role in ensuring the proceedings and its outcome are fair, they are, by law, duty bound to be fair, independent and impartial.

Section 46 of the Arbitration Ordinance (Cap. 609) and Article 18 of the UNCITRAL Model Law provides inter alia that (1) the parties must be treated with equality, and (2) the arbitral tribunal is required (a) to be independent, and (b) to act fairly and impartially as between the parties. 

Equality

The duty to treat the parties with equality is usually connected with the arbitrator’s discretion in controlling the opportunities and manner in which the parties may present their case. Arbitrators are not bound to give the parties strictly equal opportunities to present their cases, for example in Brunswick Bowling & Billiards Corp v Shanghai Zhonglu Industrial Co Ltd, the parties had agreed to a chess-clock method of allocating hearing time, but the tribunal granted extra time to the claimant. In a challenge against tribunal for treating the respondent unequally, the court found no inequity, holding that “where arbitrators discern a potential problem with the opportunity to a party presenting his case fairly arising from a procedure agreed by the parties, they are obliged to raise it with the parties instead of following blindly what has been agreed… they should take steps to conduct the arbitration in such a manner that could redress the problem instead of being constrained by an unworkable agreement of the parties.”

However, albeit strict equality in governing the arbitration is not mandated, the parties must be given reasonable opportunity to present their case and to deal with the case of their opponents. In Pacific China Holdings Ltd v Grand Pacific Holdings Ltd, it was held that “the denial of an opportunity to make a submission in reply on a matter of law will invariably constitute a serious violation. It is a matter of basic fairness.”

Independence and Impartiality

Independence

The duty of arbitrator independence has been defined in AT & T Corp v Saudi Cable Co as “connot[ing] an absence of connection with either of the parties in the sense of an absence of any interest in, or of any present or prospective business or other connection with, one of the parties, which might lead the arbitrator to favour the party concerned.” This definition, is however rather too narrow, as aside from commercial and business interests, professional and social links can also affect the independence of an arbitrator. For example, in Chan Man Yiu v Kiu Nam Investment Corp Ltd, an arbitrator was removed because he had been a close friend of the authorized representative and expert witness for the respondents for 25 years.

Impartiality

In Hebei Import & Export Corp v Polytek Engineering Co Ltd, Bokhary J saw the impartiality required of arbitrators and judges to be the lack of bias. Lord Woolf MR of the English Court of Appeal in AT&T Corp v Saudi Cable stated that if there is any justification for different standards to apply between judges and arbitrators, the court would expect a higher threshold to apply to judges, as arbitrators are selected by the parties.

In the Hebei case, a distinction was made between actual bias and apparent bias. It was found that two standards arose in dealing with domestic and international arbitration, where in the domestic context, public policy would dictate that the apparent bias of the arbitrator cannot be accepted, but in international arbitration, under the principle of comity and pro-enforcement policy, it would take something more which will violate the most basic notions of morality and justice, for the Hong Kong courts to refuse to recognize an award; the court also pointed out that if the apparent bias was strong enough, usually actual bias could be inferred, or other bases of challenge could be relied upon.

The Bias Threshold: Real Possibility or Real Danger

The test of whether bias exists has traditionally been the “real danger of bias test”, which is passed when there is a real danger that the arbitrator might unfairly regard of have unfairly regarded with favour, or disfavor the case of a party or the issue under consideration by him.

However, the House of Lords in Porter v Magill modified the real danger test to adhere more closely with the “reasonable suspicion or possibility test” which has been adopted in other common law jurisdictions such as Australia and South Africa. In the case of Deacons v White & Case LLP, the Court of Final Appeal seems to have found the new modified approach in Porter v Magill as authoritative. 

Challenge procedure

If at any time after the arbitral tribunal has been constituted, the parties doubt the impartiality or independence of an arbitrator, a challenge may be commenced under section 26 of the Arbitration Ordinance, unless arbitration rules which contain arbitrator challenge provisions have been adopted for the arbitration, in which case the arbitration rule’s procedures should be followed instead.

Any challenge under s.26 of the Arbitration Ordinance must be instituted within 15 days of the latter of either (1) the constitution of the tribunal, or (2) the discovery of relevant circumstances leading to the doubt of the arbitrator’s impartiality or independence.

The challenge must first be made to the tribunal itself. If the challenge is rejected by the tribunal, the challenging party may then opt to institute a further challenge at the Court of First Instance within 30 days of the rejection by the tribunal.

Disclosure

Due to the time limits of making challenges, parties must pay attention to any information they receive about their arbitrators, especially disclosure documentation, so that they will not be time barred from raising a challenge.

On the other side of the coin, arbitrators will want to make all relevant disclosures to the parties which could lead to a challenge of apparent bias, even if he is subjectively confident in his own independence or impartiality. A good standard of disclosure to adhere to is the Guidelines on Conflicts of Interest in International Arbitration published by the International Bar Association.

Arbitration Institutions

When appointing arbitrators, parties may feel more assured by having an arbitration institution such as the Hong Kong International Arbitration Centre (“HKIAC”) appoint an arbitrator from their panel of professional arbitrators. 

But while it is true that there is some extra degree of comfort in relying on a competent arbitration institution to appoint an independent and impartial arbitrator, it is no substitution for the party’s own judgment. 

This is because according to Section 105 of the Arbitration Ordinance, any person, who appoints an arbitral tribunal or performs any administrative function in connection to the arbitral proceedings, are liable in law, only if it is proved that his act or omission is dishonest. In the recent case of Gong Benhai v Hong Kong International Arbitration Centre, a challenge against the HKIAC in the High Court for allegedly appointing an impartial arbitrator was struck out partly due to such lack of legal liability by the HKIAC, since in the challenge, no dishonesty was pleaded.

Call Us

If you are interested in protecting your business through arbitration clauses, instituting or defending arbitrations, need help in choosing independent and impartial arbitrators or need advice on challenging possibly biased arbitrators, please do not hesitate to give us a call.

 

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