HONG KONG SAR, CHINA Law and Practice Contributed by: Eric H. H. Chow, Michael Cheng, Stephanie Wong and June Wong, C L Chow and Macksion Chan
Commission on International Trade Law (UNCITRAL) Model Law, applies one unified regime to domestic and international arbitration alike, and limits how far the court can interfere with an award. Enforcement sits in Part 10 of the AO. Hong Kong is covered by the New York Convention and has sepa - rate arrangements with the Mainland (in force from 2000) and Macao (from 2013). A further 2019 arrange - ment allows a party to a Hong Kong-seated arbitration to seek interim measures from the Mainland courts, such as freezing assets or preserving evidence – Hong Kong remains the only seat outside the Mainland able to do this. These treaties and arrangements do not apply of their own force; they take effect only as written into the AO, so enforcement relies on the AO rather than on the Convention or a direct arrangement. The second route is a common-law action on the award. The common-law route rests on the principle that agreeing to arbitrate carries an implied promise to honour the award – a contractual obligation separate from the underlying contract (Xiamen Xinjingdi Group Ltd v Eton Properties Ltd (2020) 23 HKCFAR 348). It is a more costly and complicated procedure. Whether it is the right course can turn on special considera - tions – the particular circumstances of the case, or strategic factors – so it is a case-by-case question best discussed with Hong Kong counsel. 4.2 Variations in Approach to Enforcement of Arbitral Awards Part 10 of the AO contains four routes, and which one applies depends on where the award was made: • Division 1 (Sections 82 to 86) – the general route, covering any award made in or outside Hong Kong, and the fallback where no other route applies; • Division 2 (Sections 87 to 91) – awards from a New York Convention state, other than China or any part of China; • Division 3 (Sections 92 to 98) – awards made in Mainland China; and • Division 4 (Sections 98A to 98D) – awards made in Macao. The routes differ less than the numbering suggests. The grounds for refusing enforcement are the same
in each, with one exception: Section 86 adds a fur - ther ground, for Division 1 only, allowing the court to refuse “for any other reason the Court considers it just to do so”. On the Mainland route (Division 3), any award made on Mainland China under the Arbitration Law of the Peo - ple’s Republic of China can be enforced, whichever institution administered it; ad hoc Mainland awards fall outside Division 3. A party may also enforce the same award in both Hong Kong and Mainland China, pro - vided the total recovered does not exceed the award. Otherwise, the courts treat all four routes alike, start - ing from a strong presumption in favour of enforce - ment. 4.3 Categories of Arbitral Awards Not Enforced As a New York Convention jurisdiction, Hong Kong enforces awards and may refuse only on the limited grounds in the AO, giving weight to the finality of the award and the tribunal’s authority to rule on its own jurisdiction. Those grounds are in Section 86 for Divi - sion 1, and in almost identical terms in Sections 89, 95 and 98D for the other routes. Enforcement of an Award may be refused if the award debtor proves one of the following. • A party to the arbitration agreement was under some incapacity. • The arbitration agreement was not valid under the law to which the parties subject it; or (if no indica - tion of the law to which the arbitration agreement is subjected) under the law of the country where the award was made (or under law of Mainland or the law of Macau, as appropriate). • The award debtor was not given proper notice of the arbitrator’s appointment or of the arbitral proceedings; or was otherwise unable to present its case. • The award deals with a difference not contemplat - ed by or not falling within the terms of the submis - sion to arbitration; or contains decisions on matters beyond the scope of submission to arbitration. If an award contains, apart from decisions on mat - ters submitted to arbitration (“arbitral decisions”), decisions on matters not submitted to arbitration (“unrelated decisions”), the award may be enforced
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