When Arbitration Decides a Business Dispute: Can the Court Undo the Award?

Arbitration is often presented to business people as a faster and more private way to resolve disputes. That description is not wrong, but it is incomplete. Arbitration is not merely a shortcut around the ordinary courts. It is a serious legal choice. When parties agree to arbitrate, they are usually accepting that a private decision maker will hear the dispute and issue an award that carries a strong degree of finality.

For an ordinary trader, contractor, supplier, or company director, the simplest way to understand arbitration is to think of it as choosing a private referee for a commercial dispute. Instead of taking the entire disagreement through an ordinary court trial, the parties agree that an arbitrator or arbitral tribunal will decide it. The decision is called an arbitral award. The important point, which is sometimes missed at the contract signing stage, is that the losing party will not normally receive a full second hearing in court simply because the award is disappointing.

Hengfeng Rwanda Ltd v Gapstone Quarry Ltd, decided by the Commercial High Court of Rwanda in 2025, helps explain this point. The publicly indexed case record shows a dispute arising from a Kigali International Arbitration Centre proceeding. After a KIAC award dated 18 March 2025, the matter reached the Commercial High Court in RCOM 00006/2025/HCC. The publicly indexed issue concerned whether the arbitral award should be set aside because it was alleged to be contrary to the public policy of the Republic of Rwanda.

The practical question was not simply who was right in the business dispute. The question was whether a court could interfere after the arbitration had already produced an award. That distinction matters. A court challenge to an arbitral award is generally narrower than an ordinary appeal. In an ordinary appeal, a higher court may be asked to examine legal or factual errors made by a lower court. In an arbitration challenge, the court is usually looking for a recognised legal ground for intervention, such as a serious public policy problem, procedural unfairness, lack of jurisdiction, or another ground allowed by the applicable arbitration law.

The public education lesson is that arbitration involves a bargain. Parties may gain privacy, procedural flexibility, specialist decision making, and sometimes speed. But they may also give up the comfort of a full appeal on the merits. Once an award is issued, a disappointed party cannot usually ask the court to reopen every factual disagreement or replace the arbitrator's commercial judgment with a different one. This is not a small technicality. It can affect the entire risk profile of a contract.

Public policy is one of the grounds that often attracts attention because it sounds broad. In practice, however, it is not meant to be a general invitation to relitigate the case. A party saying that an award is contrary to public policy must usually point to something serious enough to justify court intervention. Mere dissatisfaction with the result is unlikely to be enough. A party may feel that the arbitrator misunderstood the facts or gave too much weight to one document, but those complaints will not always meet the threshold for setting aside an award.

This does not mean courts have no role after arbitration. They do. Courts protect the legality and integrity of the arbitral process. They may intervene where the arbitration violates recognised legal limits, where the tribunal acted outside its authority, where fairness was seriously compromised, or where enforcement of the award would offend public policy in a legally meaningful sense. The point is more modest: court supervision exists, but it is limited. Arbitration is designed to produce a decision, not merely a draft judgment waiting for a full court retrial.

For small businesses, the case carries a practical warning. The dispute resolution clause in a contract should not be treated as boilerplate. It may determine who decides the dispute, where the hearing takes place, what rules apply, how much privacy the parties have, what costs may arise, and how difficult it will be to challenge the final award. A businessperson may carefully negotiate price, delivery, quality, and payment terms, then skim over the arbitration clause at the end. That is risky. The clause may become very important when the relationship breaks down.

Before agreeing to arbitration, parties should understand who will appoint the arbitrator, which institution or rules will govern the process, where the arbitration will take place, what language will be used, what costs may arise, and what happens after the award is issued. Those questions are not signs of mistrust. They are part of responsible contracting. A person who understands the arbitration clause before signing is less likely to panic after an award is made.

For Rwanda focused legal education, Hengfeng Rwanda Ltd v Gapstone Quarry Ltd may be used to explain arbitration as a choice with consequences. It is tempting to market arbitration only as faster dispute resolution. A more balanced explanation is better. Arbitration can be efficient and commercially sensible, but it also values finality. That finality is useful when parties want closure. It can feel severe when the award goes against them.

The ordinary message is clear enough. Arbitration is not just a business shortcut. It is a legal commitment to have a dispute decided in a particular way. A court may set aside an award where a recognised legal ground is properly shown, including a serious public policy concern. But the court will not normally reopen the entire commercial dispute simply because one side is unhappy. In that sense, the arbitration clause should be read as carefully as the price, payment dates, and delivery obligations. It may decide not only how a dispute begins, but also how final the outcome becomes.

Source note. This article is based on Hengfeng Rwanda Ltd v Gapstone Quarry Ltd, Commercial High Court of Rwanda, RCOM 00006/2025/HCC, decision dated 17 July 2025, publicly indexed together with KIAC Arbitration Number 2023 to 2024/240 and an award dated 18 March 2025. It also refers generally to Law No. 005/2008 of 14 February 2008 on Arbitration and Conciliation in Commercial Matters. It is prepared for public legal education only and should not be treated as legal advice for any specific arbitration dispute.