In L v R [2025] HKCFI 3162, the court reminded parties and practitioners of various important aspects of applications made and hearings conducted in the Arbitration List. In particular, that interlocutory skirmishes should be avoided, as parties and the court should focus on dealing with the substantive subject matter of the proceedings expeditiously, the usual subject matter being the setting aside of arbitral awards or orders granted to enforce arbitral awards, or challenges to the jurisdiction of the tribunal. The court said that for proceedings in the Arbitration List, bearing in mind the objective of the Arbitration Ordinance, delay in making an application for security for costs is an important factor, which may lead to the refusal of the order and that unwarranted applications will be penalized by costs orders, including orders against the legal representatives in appropriate cases.
The proceedings had been issued by the Plaintiff by way of Originating Summons (OS), under sections 66 and 81 of the Arbitration Ordinance, to set aside a settlement agreement in relation to arbitral proceedings. The substantive hearing of the OS was set down to be heard at the end of September 2025. In June 2025, the Defendant issued a summons to expunge parts of the Plaintiff’s affirmations. In July 2025, the Defendant applied for security for costs and since the application was opposed, there were practical difficulties for the application to be heard, and determined in the time available – no court dates were available between July and September 2025.
No order was made on the expunge summons and the security for costs summons was later withdrawn. Nonetheless, the court handed down its decision to remind parties and practitioners of various important matters relating to cases in the Arbitration List, namely:
- It is not the practice of the Arbitration Court to permit any party unilaterally to set a summons down for hearing on the day set for the hearing of an earlier summons on a different subject matter. Any attempt to do so, will only derail the hearing and the preparations made for a summons issued and set down for disposal at the time indicated by the parties.
- Interlocutory skirmishes should be avoided. Parties and the court should focus on dealing with the substantive subject matter of the proceedings expeditiously, the usual subject matter being the setting aside of arbitral awards or orders granted to enforce arbitral awards, or challenges to the jurisdiction of the tribunal. Interlocutory skirmishes only distract and derail proceedings before the court, the preparations for the substantive hearing and its determination.
- The status of arbitral awards, orders made by the tribunal and progress of ongoing arbitration proceedings should not be kept in abeyance or in a state of limbo or uncertainty concerning their validity.
- Applications for security for costs can be dismissed on the ground of delay alone, in the absence of some exceptional circumstance which can explain the party’s inaction.
- In making an application for security under RHC Order 23, the applicant will have to establish that having regard to all the circumstances of the case, it is just for the court to make the order.
- Any ground for seeking security should have become apparent upon commencement of the proceedings, when the OS was issued and served. Here the court could not perceive of any purpose being served in making an order for security for costs two months before the substantive hearing of the OS, when the Defendant had been content with the status since commencement of the proceedings in November 2023.
For further information, please contact:
Stanley Lo, Deacons
stanley.lo@deacons.com
