On 24 March 1995, an arbitration tribunal appointed by the China International Economic and Trade Arbitration Commission (CIETAC) in Beijing made an arbitral award in favour of the respondent as claimant against the appellant as respondent in an arbitration, R94368. The respondent’s claim submitted to arbitration was for, inter alia, damages for short shipment of steel wire rods.

For the composition of the arbitration tribunal, the respondent nominated one Mr Kang who was unable to assume his post as arbitrator, and the Chairman of CIETAC nominated one Mr Zhai Bao Shan (Zhai) as a substitute arbitrator on the respondent’s instructions. The appellant nominated one Mr Cao Jia Rui. The Chairman’s preference for the presiding arbitrator was Mr Xie. They were all selected from the panel of arbitrators of CIETAC and were duly appointed pursuant to Article 24 of the CIETAC Arbitration Rules. The arbitration tribunal sat in Beijing, the People’s Republic of China (PRC) on 5 December 1994 and an award was made in favour of the respondent. After the arbitral award, the appellant was unable to find Zhai amongst the names published in the panel of CIETAC arbitrators. The appellant also discovered that Zhai was a high- ranking official of the Import and Export Commodity Inspection Bureau (CCIB). In the said arbitration, the respondent relied on, inter alia, an Inspection Certificate issued by the Haikou branch of CCIB. It is common ground that Zhai was at the material time a Director of the Inspection Technology Section of CCIB. On 17 November 1995, Leonard, J granted leave to the respondent for enforcing the arbitral award in Hong Kong. On 19 March 1997, Sears, J, refused to set aside the order of Leonard, J but the judge stayed the order for payment-out of $1,370,083.21 the appellant lodged in court until the hearing of this appeal. From the order of Sears, J, the appellant appealed.