HONG KONG SAR, CHINA Law and Practice Contributed by: Lianjun Li, Matthew Townsend, Patrick Chong and Max Lam, Reed Smith
Article 45 of the 2024 HKIAC Rules provides that all arbitration proceedings, including submissions, evi- dence, and awards, are confidential. However, the rules of confidentiality can be overridden if disclosure is required under the applicable laws.
Under Section 79 (1) of the AO, unless otherwise agreed by the parties, an arbitral tribunal may award simple or compound interest on monetary awards, at rates and for periods it considers appropriate. Interest is payable on monetary awards from the date of the award at the judgment rate unless the tribunal speci- fies otherwise (Section 80 of the AO). 8.4 Mitigation of Damages Under Hong Kong law, an investor is generally not entitled to recovery of damages which it could have avoided by taking reasonable mitigatory steps. This is sometimes referred to as a duty to mitigate its losses. Therefore, the investor’s duty to mitigate is not a legal obligation that will give rise to legal responsibility; rather, the failure by the investor to mitigate damages may preclude recovery to that extent. Under Section 84 of the AO, arbitral awards are enforceable in Hong Kong in the same manner as a judgment of the court, but only with the leave of the court. To obtain leave to enforce an arbitral award, the award creditor must make an ex parte application to the court, accompanied by a supporting affirmation and the following documents: • a duly authenticated original award or a duly certi- fied copy of it; • the original arbitration agreement or a duly certified copy of it; and • (if the award or agreement is not in either or both traditional Chinese and English) a translation certified by an official or sworn translator or by a diplomatic or consular agent. 9. Enforcement of Awards 9.1 Enforcement Procedure If the court is satisfied that all relevant requirements are met, it will grant leave to enforce the award, result- ing in an enforcement order. This order must then be served on the award debtor, who then normally has 14 days to apply to set aside the enforcement order. Under Order 73 rule 10 (6) of the Rules of the High Court (Cap. 4A), the enforcement order shall not be
8. Damages and Valuation 8.1 Remedies
Under Section 70 of the AO, an arbitral tribunal can award any remedy or relief that could have been ordered by the court as if the dispute had been “the subject of civil proceedings in the Court”, which includes an order for specific performance of any con- tract (other than a contract relating to land or any inter- est in land). A tribunal can also grant interim measures (including injunctions) (Section 35 of the AO). 8.2 Methodologies for Quantum Assessment Under Hong Kong law, the principle of compensatory damages is normally adopted when assessing dam- ages for a breach of contract, which aims to put the innocent party in the position it would have been in had the breach not occurred. In assessing the quan- tum of damages, the court and tribunal can take into account various relevant factors. Where issues relating to quantum in a particular case are beyond the expertise of a court or tribunal, parties may engage a valuation expert, who will use appro- priate valuation methodologies for assessment of a proper amount of damages to be awarded to the inno- cent party. 8.3 Recovering Interest and Legal Costs In Hong Kong arbitration, parties are generally entitled to recover interest, legal and expert fees, and arbitral institution costs. Hong Kong tribunals typically adopt a “costs follow the event” approach, although there is no prescribed rule in this regard. Under Section 74 (2) of the AO, tribunals may decide to whom and by whom and in what manner the costs of the arbitration proceedings are to be paid. However, the tribunal must only allow costs that are “reasonable in all the circumstances” (Section 74 (7)(a) of the AO).
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