HONG KONG SAR, CHINA Law and Practice Contributed by: Frederick Hui and Samuel Li, Zhong Lun Law Firm
petitions) are supervised by courts to protect the public interest and collective creditor rights. • Legal status and validity of intellectual property rights : For example, patent or trade mark registra - tion validity disputes often fall under the exclusive jurisdiction of designated authorities or courts, though licensing disputes may be arbitrable. • Employment claims : Certain statutory employment rights (eg, unfair dismissal under the Employment Ordinance) may require adjudication by the Labour Tribunal rather than arbitration, unless the arbitra - tion agreement explicitly covers such disputes and Hong Kong courts follow a structured choice‑of‑law analysis for the law governing the arbitration agree - ment. The courts look first for an express choice of law for the arbitration agreement; if this is absent, they consider whether the main contract’s govern - ing law is an implied choice for the arbitration agree - ment. Where that would undermine the effectiveness of the clause or is otherwise displaced by the par - ties’ choice of seat, the law of the seat (lex arbitri) will often be applied as the system with the closest and most real connection. In practice, a Hong Kong seat is a strong connecting factor pointing to Hong Kong law governing the arbitration agreement, particularly where the governing law of the main contract is silent or where applying the main contract law would imperil the clause’s validity. On enforcement, Hong Kong courts adopt a firmly pro‑arbitration stance. The Court of First Instance routinely grants mandatory stays of court proceed - ings in favour of arbitration unless the arbitration agreement is shown to be null and void, inopera - tive, or incapable of being performed. Courts apply the presumption in favour of one‑stop adjudication, construe ambiguous drafting to uphold arbitration where possible, and leave jurisdictional objections to the tribunal under kompetenz ‑ kompetenz , subject to limited court review. Anti‑suit relief may be granted to restrain foreign litigation brought in breach of a Hong Kong‑seated arbitration agreement, and the courts are receptive to interlocutory assistance (eg, injunc - tions and other interim measures) to make the arbitra - tion effective. complies with statutory protections. 3.3 National Courts’ Approach
As a result, arbitration agreements are usually enforced in Hong Kong. Failures tend to be exceptional and fact‑specific – eg, clauses that are fundamentally uncertain or involve non‑arbitrable subject matter, or where there is clear evidence of bias, prejudice or non-competence of the tribunal. 3.4 Validity Hong Kong applies the doctrine of separability to arbi - tration agreements. Under the AO, which adopts the Model Law framework, an arbitration clause is treated as an agreement independent of the other terms of the contract. The tribunal has competence to rule on its own jurisdiction ( kompetenz - kompetenz ), including any objections regarding the existence or validity of the underlying contract. Consequently, a finding that the main contract is void, voidable, rescinded, dis - charged or otherwise ineffective does not, by itself, invalidate the arbitration clause. Party autonomy over arbitrator selection is broadly respected under the laws of Hong Kong, but it is sub - ject to safeguards ensuring equality, independence and due process. Arbitrators must be impartial and independent, disclose potential conflicts and meet any qualifications the parties stipulate; justifiable doubts or failure to meet agreed qualifications can constitute a ground for challenge or removal. Parties may craft their own appointment procedure (usually by adopting institutional arbitration rules or selection mechanisms). 4.2 Default Procedures 4. The Arbitral Tribunal 4.1 Limits on Selection If the parties’ agreed appointment mechanism fails or is not followed, the AO provides default procedures (Sections 23–24 of the AO, based on Articles 10–11 of the Model Law). Unless the parties agree otherwise: • for a sole arbitrator, the Court of First Instance or designated default appointing authority under the AO (ie, HKIAC) will appoint upon a party’s request; and • for a three‑member tribunal, each side appoints one co-arbitrator and the two co‑arbitrators
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