In the recent decision of RusChemAlliance LLC v Linde GmbH & Another [2026] HKCA 763, the Hong Kong Court of Appeal (the CA) has shed light on judicial approaches to Hadkinson orders in aid of arbitration proceedings.
A Hadkinson order1 bars a party who has ignored a previous court order (and is thus in contempt of court) from being heard by the court until that party has purged itself of contempt.2
Hong Kong authority identifies five conditions for the granting of a Hadkinson order, namely:
- the respondent to the application is in contempt of court;
- the contempt is deliberate and continuing;
- as a result, there is an impediment to the course of justice;
- there is no other realistic and effective remedy; and
- the order is proportionate to the problem and goes no further than is necessary.3
In the RusChemAlliance LLC decision, the CA dismissed the Plaintiff’s application for leave to appeal against a Hadkinson order granted by the Court of First Instance. That order provided for the stay of the Plaintiff’s application to set aside an arbitral award pending compliance with an anti-suit injunction, granted by the Court of First Instance in order to prevent the Plaintiff from breaching arbitration agreements it had concluded with the 1st and 2nd Defendants.
In doing so, the CA reaffirmed Hong Kong’s pro-arbitration stance and clarified key aspects of the requirements for obtaining a Hadkinson order.
Background
The Plaintiff, a Russian special purpose company, contracted with the 1st Defendant, a German industrial gases and engineering group, to build a gas processing plant (the EPC Contract). The 2nd Defendant provided a guarantee of certain obligations of the 1st Defendant to the Plaintiff under the EPC Contract (the Guarantee).
The EPC Contract and the Guarantee were governed by English law and each contained an arbitration agreement requiring that disputes be resolved by HKIAC arbitration seated in Hong Kong, with the arbitration agreements governed by Hong Kong law.
Following amendments to EU sanctions in April 2022 that affected natural-gas-related activities, the 1st Defendant suspended performance of the EPC Contract and claimed suspension costs. The Plaintiff maintained that the suspension was unlawful, subsequently issued a termination notice and claimed entitlement to reimbursement of advance payments and damages.
In breach of the arbitration agreement in the EPC Contract, the Plaintiff initiated proceedings against the 1st Defendant in Russia claiming contractual damages. The Plaintiff subsequently obtained a freezing order in the Russian courts in respect of the Defendants’ assets and their subsidiaries in Russia.
Shortly thereafter, the Defendants commenced arbitration proceedings in Hong Kong seeking declarations, among other things, that the Plaintiff’s purported termination of the EPC Contract was invalid, that the contract remained in force and that the Plaintiff was not entitled to payments arising from the purported termination.
In January 2024, Anthony Chan J granted a permanent anti-suit injunction (the 2024 HK ASI) against the Plaintiff, requiring the Plaintiff to withdraw and/or set aside any relief obtained in the Russian court proceedings.
In May 2024, an arbitral tribunal issued a partial award which (i) dismissed the Plaintiff’s jurisdictional challenge, (ii) declared that the Plaintiff had breached the arbitration agreements, and (iii) further declared the Defendants were entitled to be indemnified by the Plaintiff in respect of losses arising from the Plaintiff’s breaches of the arbitration agreements.
The Plaintiff issued a summons to set aside the partial award.
On the application of the Defendants, the Court of First Instance granted a Hadkinson order against the Plaintiff for its contempt of the 2024 HK ASI, thereby refusing to hear the Plaintiff’s application to set aside the award unless and until the Plaintiff complied with the 2024 HK ASI. The Plaintiff subsequently filed an application for leave to appeal against the Court of First Instance’s decision and to seek a stay of the Hadkinson order.
The CA’s decision
The CA dismissed both of the Plaintiff’s applications.
At the outset, the CA considered that the decision of the first instance judge to grant the Hadkinson order should be regarded as an aspect of the court’s case management powers under Order 1B, rule 1(2)(1) of the Rules of the High Court, Cap 4A.
Accordingly, the CA would not intervene with the exercise of the lower court’s discretion unless it considered that the judge (i) made a mistake of law, (ii) misdirected himself with regard to the legal principles, (iii) misapprehended material facts, or (iv) had taken into account irrelevant matters, and that the judge’s conclusion was plainly wrong and outside the generous ambit within which reasonable disagreement was possible.4
The CA then considered, and ultimately rejected, the Plaintiff’s various grounds in support of its application for leave to appeal, finding that none of the proposed grounds were reasonably arguable or had a realistic prospect of success.
Notable aspects of the CA’s reasoning are as follows:
- Under Article 34 of the UNCITRAL Model Law, the court’s power to set aside an arbitral award is permissive rather than mandatory. The Plaintiff had argued that the courts were under a positive duty to hear and determine its challenge to the award notwithstanding its non-compliance with the 2024 HK ASI. The CA emphasised that Article 34 provides that a court “may” set aside an award and that the Plaintiff remained able to pursue its challenge if it chose to comply with the 2024 HK ASI.
- The Plaintiff had submitted that, to justify the making of a Hadkinson order, it must be shown that the contempt itself “impedes the course of justice” and there must be a sufficient nexus or connection between the contempt complained of and the course of justice which has allegedly been impeded by the contempt. The CA considered that such a “sufficient nexus” is only a factor relevant to whether the contempt impedes the course of justice. It is not a standalone requirement that must be established before a Hadkinson order can be granted.
- Nevertheless, the CA held there was a sufficient nexus on the facts. It was clear that the Russian court proceedings initiated by the Plaintiff and the arbitration proceedings commenced by the Defendants related to the same substantive matter i.e. the right of the Plaintiff to terminate the EPC Contract (or the validity of the termination) and consequential relief. The CA therefore considered that it was open to the first instance judge to find that there was a sufficient nexus between the contempt complained of and the Plaintiff’s application to set aside the partial award.
- The CA also placed considerable emphasis on the fact that the Plaintiff retained the ability to remedy its contempt. The Hadkinson order did not permanently deprive the Plaintiff of access to the court. The Plaintiff’s ability to pursue its set-aside application was within its own control because compliance with the 2024 HK ASI remained possible. This factor weighed heavily against the Plaintiff’s arguments concerning access to justice and the proportionality of the Hadkinson order.
- The CA also rejected the Plaintiff’s contention that the Hadkinson order effectively determined its substantive rights. The CA emphasised that the order did not determine the merits of the set-aside application and that any restriction on the Plaintiff’s access to the court remained contingent upon its own continuing non-compliance with the 2024 HK ASI.
- The CA considered that the first instance judge was entitled to conclude that the Plaintiff’s continuing disobedience of the 2024 HK ASI constituted an impediment to the course of justice. By continuing to pursue enforcement measures in the Russian courts, despite the Hong Kong anti-suit injunction and the court’s findings regarding the parties’ arbitration agreement, the Plaintiff undermined the enforcement of Hong Kong court orders and caused prejudice to the Defendants. Such conduct could impede the administration of justice from the standpoint of Hong Kong law.
Commentary
The CA’s decision confirms that Hadkinson orders are available as a robust element of the Hong Kong courts’ case management tools in support of arbitration proceedings and may be deployed to support anti-suit injunctions granted to uphold parties’ contractual agreement to arbitrate. Parties cannot expect to invoke the court’s supervisory jurisdiction over arbitral awards while simultaneously disregarding court orders directed at preserving the integrity of the arbitral process.
The decision also illustrates that the Plaintiff’s inability to pursue its challenge to the partial award was ultimately self-inflicted, as compliance with the 2024 HK ASI remained within its control.
More broadly, RusChemAlliance LLC is the latest indication of Hong Kong’s continued commitment to supporting international arbitration, enforcing arbitration agreements and ensuring that parties cannot gain procedural advantages through conduct inconsistent with court orders or agreed methods of dispute resolution.
Acknowledgements to our Summer Intern Lily An for her assistance with this article.
For further information, please contact:
Alfred Wu, Partner, Dentons
alfred.wu@dentons.com
- Named after the English case, Hadkinson v Hadkinson [1952] 2 All ER 567.↩
- See, for example, a previous decision of the Hong Kong Court of First Instance in La Dolce Vita Fine Dining Co Ltd v Zhang Lan and Others [2020] HKCFI 622, in which the court refused to hear the first respondent in the proceedings on her application to set aside the court’s leave given to the applicant to enforce a CIETAC arbitral award in Hong Kong, unless she complied with an outstanding asset disclosure order. The Dentons Hong Kong team commented on the decision in this article.↩
- See the CA’s decision in CCMJ v SSM (formerly known as SKL) [2022] HKCA 173, at §27.↩
- Citing the principles in La Dolce Vita Fine Dining Group Holdings Ltd v Zhang Lan and Another [2020] HKCFI 1969, at §3, per Mimmie Chan J.↩
