HONG KONG SAR, CHINA Law and Practice Contributed by: Lianjun Li, Matthew Townsend, Patrick Chong and Max Lam, Reed Smith
enforced until the expiration of the said period or until after the setting-aside application is finally disposed of. Under the AO, the grounds for setting aside an arbitral award are limited in scope and largely mirror those found in the New York Convention. Further, the AO provides that if an application for set- ting aside or suspending an award has been made to a competent authority, the court may adjourn the proceedings for the enforcement of the award and order the respondent to give security. However, the court has discretion to still proceed to allow enforce- ment of the award concerned notwithstanding that the setting-aside application to the supervisory court is still pending. Under Hong Kong law, even if an award is set aside by the supervisory court of the arbitration, it does not follow that enforcement must be refused by a court of enforcement ( G v X [2024] 1 HKLRD 685). Hong Kong courts are bound to apply the immunity policies of the Central People’s Government of Chi- na. China adopts the doctrine of restrictive immunity (extending to enforcement immunity) under China’s Foreign State Immunity Law (FSIL), which came into force on 1 January 2024. In particular, Articles 13 to 15 of the FSIL stipulate that property situated in China and used for commercial activities regarding a Chi- nese judgment or arbitral award may be subject to judicial enforcement actions. It remains to be seen how the Hong Kong courts will consider the issue of sovereign immunity following the introduction of the FSIL. 9.2 Approach of the Courts The court adopts a pro-enforcement approach to the enforcement of arbitral awards, and will interfere only in limited circumstances. The court has discretion to enforce an award even if the grounds for refusal of enforcement set out in the AO are made out.
Under the AO, the grounds for setting aside an arbitral award are limited and largely mirror those found in the New York Convention. One of the grounds is that it would be contrary to public policy to enforce the award, which is construed narrowly under Hong Kong law so that an award would be set aside only where to do otherwise would violate Hong Kong’s fundamental notions of morality and justice. In respect of sovereign immunity, the Court of Final Appeal’s decision in Democratic Republic of the Con- go v FG Hemisphere Associates LLC (2011) 14 HKC- FAR 95 and (2011) 13 HKCFAR 395 confirmed that Hong Kong courts must follow the sovereign immunity policies of the Central People’s Government of China. Following the introduction of the FSIL, the Hong Kong courts are expected to apply the relevant principles when addressing questions of state immunity and In Hong Kong, there are a number of public registries that may assist in locating state assets, including the land registry, company registry, trade marks registry, and vehicle registration databases. However, they offer different levels of information as to ownership and may be subject to limitations. The Hong Kong courts typically uphold the principle of separate legal personality but may pierce the cor- porate veil in exceptional circumstances, including where a company is used to perpetrate fraud or evade legal obligations. The question of whether the cor- porate veil can be pierced is highly fact-specific and depends on the unique circumstances of each case. enforcement against state assets. 9.3 Asset Tracing and Recovery
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