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
challenge period, an award creditor can usually enter judgment within about two to three months. Because the work is confined to the application and affidavit, costs stay contained. • Opposed. Costs rise sharply. The matter becomes a contested application with evidence, submis - sions and a hearing, and a first-instance decision commonly takes six to twelve months, sometimes longer. It should be budgeted it as ordinary High Court litigation, with the figure turning on the grounds raised and the volume of evidence. • Indemnity costs. An award debtor that fails to resist enforcement will normally pay the award creditor’s costs on the indemnity basis. 4.6 Challenging Enforcement of Arbitral Awards An award debtor resists by applying to set aside the enforcement order within the time explained in 4.4 Process of Enforcing Arbitral Awards . The applica - tion must rely on a ground in 4.3 Categories of Arbi- tral Awards not Enforced , and the burden is on the award debtor. The court will not re-examine the merits: an argument that the tribunal got the facts or the law wrong is not a ground and dressing it up as a denial of a fair hearing or a breach of public policy will not make it one. Parallel Proceedings A common pattern: the award debtor applies to set the award aside at the seat, the award creditor applies to enforce in Hong Kong, and the award debtor asks the Hong Kong court to hold off until the seat court rules. The court can adjourn the proceedings for enforcement pending that decision (Sections 86 (4)(a), 89 (5)(a) and 98D(5)(a)), but not as a matter of course. It weighs two things: how strong the challenge looks on a brief assessment, and whether delay would make eventual enforcement harder. The stronger the chal - lenge appears, the more willing the court is to wait; the greater the risk to enforcement, the more likely it is to require security as the price of waiting. Division 3, which governs the Mainland awards, contains no equivalent provision.
Following Soleh Boneh International Ltd v Govern - ment of the Republic of Uganda [1993] 2 Lloyd’s Rep 208 (an English Court of Appeal decision applied in Hong Kong, most recently in SIC v WI [2026] HKCFI 1795), the court assesses the award on a brief con - sideration: • if the award is manifestly valid, the court will either order immediate enforcement or grant enforcement against substantial security; and • if the award is manifestly invalid, the court should adjourn and order no security. In deciding on security, the court compares the credi - tor’s position if it could enforce immediately with its position if the adjournment delays enforcement (SIC v WI, citing A v B [2022] HKCFI 607). The Price of a Challenge An award debtor should be advised of two conse - quences before starting. First, it may be ordered to provide security – for the full amount of the award, not just costs (Sections 86 (4)(b), 89 (5)(b) and 98D(5)(b)) – so it may have to fund the award while its challenge is heard. Second, if the challenge fails, it will normally pay the winner’s costs on the indemnity basis. Divi - sion 3, which governs Mainland awards, contains no equivalent provision for adjournment or security.
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