16 April 2021
As previously reported, Hong Kong and the Mainland signed a Supplemental Arrangement on 27 November 2020 for the purpose of enhancing enforcement of arbitral awards between the two jurisdictions.
As a recap, the supplemental arrangements are as follows:-
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It has now been clarified expressly in the Supplemental Arrangement that arbitral awards enforced under the Arrangement are recognised by the Hong Kong courts and Mainland Courts. Previously, the Arrangement did not refer to “recognition” of the arbitral awards but only dealt with enforcement of the awards.
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The Supplemental Arrangement now expressly provides that the relevant courts may impose preservation or mandatory measures on an application by the relevant party prior to enforcement of the arbitral award.
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The Supplemental Arrangement extends the scope of Mainland awards that can be enforced in Hong Kong as long as the award is rendered pursuant to the Arbitration Law of in the PRC. This has the effect of aligning the definition of the scope of arbitral awards with the prevalent international approach of “seat of arbitration” under the New York Convention.
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The Restriction in the Arrangement regarding simultaneous enforcement proceedings in both jurisdictions has now been removed. Award creditors may now commence enforcement actions in both the Mainland and Hong Kong at the same time, provided that the total amount to be recovered from enforcement does not exceed the amount determined in the arbitral award.
Paragraphs 1 and 2 above have already came into effect on 27 November 2020, whereas paragraphs 3 and 4 require amendments to be made to the Arbitration Ordinance (Cap. 609) before becoming effective.
The required amendments have now been enacted into the Arbitration (Amendment) Ordinance 2021, which have been gazetted on 19 March 2021, and will come into operation on 19 May 2021.
The amendments are undoubtedly welcome in that they allow a wider range of Mainland awards to be enforced in Hong Kong and simultaneous enforcement of awards in both jurisdictions.
For further information, please contact:
Charing Yu, Hauzen LLP
info@hauzen.hk
