ZHH advises on arbitration proceeding before HKIAC for Huya in a contract breach dispute

Date:2019/07/02 Views:805

Huya, a leading Internet technology company in China, was listed on NASDAQ in May 2018. In early 2018, Huya Hong Kong signed an exclusive live broadcast contract with a well-known Indonesian anchor, whereby if the anchor defaulted or was found to be on live on other competing platforms, Huya shall be entitled to demand payment of nearly RMB 20 million liquidated damages. When Huya was preparing for putting an official live broadcast, the anchor, tempted by another live broadcast platform, indicated clearly to Huya that the signed contract would not be performed, and had started live broadcasting on another competitive platform. After Huya’s negotiation with the Indonesian anchor to no avail, it filed an application for arbitration to the Hong Kong International Arbitration Center (“HKIAC”). The HKIAC made a final award on May 8, 2019 after hearing the case as per its rules. The award almost supported all of Huya's claims, including but not limited to paying by the anchor to Huya more than RMB 20 million liquidated damages, interests, arbitration fees, etc.

 

Huya took effective measures through strict risk control when its legal rights were breached, and finally won this case at the HKIAC. Huya has found a model from well-designed contract terms at the very beginning, to eliminated key risks through detailed due diligence and research, to active and efficient countermeasures to be taken in the case of a dispute, to win cases with professional services provided by domestic and overseas lawyers. It is a successful going-out approach for domestic enterprises, whose operation mode, attitude and concept are worth learning and referring to for many domestic enterprises.

 

ZHH provided full legal services for this case by conducting due diligence with respect to liability for breach of contract, dispute resolution and other clauses agreed when assisting Huya in the review and design of contract clauses, by helping design effective countermeasures to be taken in the case of a dispute, and by assisting Huya in full involvement in arbitration procedures and providing consulting advice.

 

This project was led by Partner YANG Qing’s team.