The applicant failed to establish a seriously arguable question of law justifying further appeal
The Court of Appeal has upheld an arbitration ruling in favour of Accel (HK) Company Ltd, confirming its victory in a contractual dispute over the sale of skincare products in China.
Antipodes, a New Zealand-based skincare company, and Accel, a Hong Kong-registered e-commerce firm, entered into a management services agreement (MSA) on 11 April 2019. The agreement required disputes to be resolved through arbitration under the New Zealand Dispute Resolution Centre’s rules.
A dispute arose, and in August 2020, Antipodes terminated the MSA. It then filed proceedings in the High Court, alleging that Accel had breached the contract. In response, Accel issued a notice of arbitration in June 2021, seeking a declaration that Antipodes had breached the agreement and claiming damages. The High Court stayed the litigation in favour of arbitration.
An experienced international arbitrator conducted the arbitration and ruled in Accel’s favour, ordering Antipodes to pay over US$2m, along with additional amounts in Chinese yuan and New Zealand dollars.
Under the Arbitration Act, an appeal on a question of law can be brought only with mutual agreement or with leave from the High Court. Antipodes sought leave to appeal, arguing that the arbitrator made errors in law, particularly regarding s. 50 of the Contract and Commercial Law Act 2017 (CCLA) and the calculation of damages. The court denied the application, finding no seriously arguable error of law. Antipodes then sought leave to appeal that refusal to the Court of Appeal, but the application was again declined. It subsequently applied for special leave from the Court of Appeal under clause 5(6) of the second schedule to the Arbitration Act.
The Court of Appeal examined whether the High Court’s refusal of leave was plainly wrong or involved a misapplication of the legal test. It concluded that Antipodes failed to establish a seriously arguable question of law justifying further appeal. Regarding s. 50 of the CCLA, Antipodes argued that the arbitrator did not properly assess whether it was "fair and reasonable" to override the MSA’s entire agreement clause. The court found that the arbitrator had considered all relevant circumstances, including the parties’ commercial experience, legal representation, and the nature of the alleged misrepresentation. The court determined there was no serious legal error in her reasoning.
Antipodes also challenged the arbitrator’s approach to calculating lost profits and service fees. It argued that she relied on an incorrect methodology, particularly in relation to sales targets and pricing models. The Court of Appeal agreed with the High Court’s view that these were factual determinations rather than legal errors, making them outside the scope of an appeal.
Another issue raised was whether the High Court erred by deciding Antipodes’ second leave application on the papers without an oral hearing. While the court acknowledged the absence of a hearing, it determined that this did not materially impact the outcome. It noted that the judge had a thorough understanding of the case from prior proceedings and was not required to hold an oral hearing in every instance.
The court also considered whether the issues had wider legal significance. It found that the matters raised were specific to the case and unlikely to set a broader precedent. Given the commercial experience of both parties and the limited role of courts in reviewing arbitral awards, it determined that the cost and delay of further litigation outweighed any potential benefit of an appeal.
In its ruling, the Court of Appeal denied Antipodes’ application for special leave. It emphasised that arbitration decisions should generally be final and that the parties had agreed to arbitration knowing the restricted scope for judicial intervention.
