HONG KONG SAR, CHINA Law and Practice Contributed by: Frederick Hui and Samuel Li, Zhong Lun Law Firm
5.5 Breach of Arbitration Agreement Hong Kong courts take a firmly pro-enforcement approach. If court proceedings are commenced in breach of an arbitration agreement, the Court of First Instance will ordinarily grant a mandatory stay under the AO (based on the Model Law) unless the arbitra - tion agreement is null and void, inoperative, or inca - pable of being performed. The threshold for resisting a stay is high: the court typically applies at least a prima facie test of the agreement’s existence and scope, and construes clauses broadly (“arising out of or in connection with”) to capture the dispute. Courts also grant anti-suit injunctions to restrain foreign litigation brought in breach of a Hong Kong-seated arbitration agreement where it is just and convenient to do so. Accordingly, there is a marked reluctance to allow such court proceedings to continue. Hong Kong’s policy is minimal judicial intervention and deference to arbitral tribunals on matters of jurisdiction and proce - dure ( kompetenz ‑ kompetenz ), with any residual objec - tions addressed in the arbitration or at the set-aside/ enforcement stage. Only in exceptional circumstances – clear invalidity, non-arbitrability, or impossibility of performing the clause – will the courts decline a stay and permit litigation to proceed. 5.6 Jurisdiction Over Third Parties Hong Kong law does not give arbitral tribunals a free- standing power to bind non‑signatories. A tribunal may assume jurisdiction over a third party only if, as a matter of the applicable law, that person is treated as having consented to or become bound by the arbitra - tion agreement. Pathways include statutory third‑par - ty rights (where a third party enforces a contract term that is subject to an arbitration clause, they are treated as a party to that clause) and orthodox doctrines such as assignment, novation, agency/authority (including “true principal”), trust/beneficiary claims, incorpora - tion by reference, and estoppel. Courts support this framework at the stay/anti‑suit stage but expect tri - bunals to decide first under kompetenz ‑ kompetenz . There are important limits. Hong Kong does not rec - ognise a stand‑alone “group of companies” doctrine; consent remains the touchstone. Awards against true strangers to the arbitration agreement face serious enforcement risk, and courts may set aside
jurisdictional determinations that incorrectly rope in non‑parties. These rules are nationality‑neutral: if the legal basis exists, they apply equally to foreign and domestic third parties.
6. Preliminary and Interim Relief 6.1 Types of Relief
Under the AO, an arbitral tribunal may grant prelimi - nary or interim measures on a party’s request. Those measures are binding on the parties and may be rec - ognised and enforced by the Hong Kong courts; the AO allows a tribunal to record an interim measure in an award and provides a statutory route for court enforce - ment of tribunal “orders or directions” (with Section 61 of the AO based on Article 17H of the Model Law). By contrast, ex parte “preliminary orders” are temporary, expire after 20 days unless converted into an interim measure after hearing the other side, and are binding between the parties but not court‑enforceable (Sec - tion 38 (4)). Emergency arbitrator relief under the 2024 HKIAC Rules is treated as having the same effect as an interim measure and is enforceable in Hong Kong. The Model Law taxonomy adopted in Hong Kong expressly covers: maintaining or restoring the status quo; measures to prevent current or imminent harm or prejudice to the arbitral process; preservation of assets to satisfy a future award (eg, freezing/Mare - va‑type relief and security for claims); and preserva - tion of relevant evidence. Tribunals may also order security for costs, require prompt disclosure of mate - rial changes, and modify, suspend or terminate interim measures as circumstances evolve. The AO clarifies that interim measures can take the form of injunc - tions. In parallel, Hong Kong courts retain a supportive power to issue interim measures in aid of arbitrations seated in or outside Hong Kong. 6.2 Role of Courts Hong Kong courts have express statutory authority to grant interim measures “in relation to any arbitral pro - ceedings”, whether the arbitration is seated in Hong Kong or overseas, and this power applies even if the arbitral tribunal has similar powers (see Section 45 of the AO). The court may, however, decline to act if the matter is already before the tribunal and it consid -
429 CHAMBERS.COM
Powered by FlippingBook