Arbitration scope in shareholder agreements (Soremi v China National Gold)
Arbitration analysis: The Hong Kong Court of First Instance refused China National Gold Group Hong Kong Limited (CNG) leave to appeal against the earlier refusal to stay Soremi Investments Ltd’s (SIL) action in favour of arbitration. Although the shareholders’ agreement contained a wide arbitration clause (expressly extending to disputes over ‘non-contractual obligations’), the court held that the dispute must still, in substance, arise out of or relate to that agreement. The proposed appeal failed because the judge had not created a new ‘transacting/non-transacting party’ test: SIL’s limited role under the agreement (mainly to give effect to dividend arrangements) was simply part of the contractual context. Further, the conversion claim did not depend on determining whether the agreement’s reserved-matters provisions were complied with, and the Fiona Trust presumption could not expand the clause beyond what the parties objectively agreed. The decision underlines that Hong Kong’s pro-arbitration policy operates through party autonomy and careful contractual construction, not presumptions that override context. Written by Julien Chaisse, professor & RGC senior research fellow at School of Law, City University of Hong Kong.