Tony Dymond and Z J Jennifer Lim, Debevoise & Plimpton

This is an extract from the first edition of GAR’s The Guide to Challenging and Enforcing Arbitration Awards. The whole publication is available here. 

Applicable requirements as to the form of arbitral awards

Applicable legislation as to the form of awards

1 Must an award take any particular form (e.g., in writing, signed, dated, place, the need for reasons, delivery)?

Section 67 of the Hong Kong Arbitration Ordinance (Cap. 609) (HKAO), which gives effect to Article 31 of the UNCITRAL Model Law, sets out the formal and substantive requirements for an award. It provides that an award must:

  • be in writing;
  • be signed by the arbitrator or arbitrators. A signature by a tribunal majority is sufficient in proceedings with more than one arbitrator, provided that the reason for any omitted signature is stated (e.g., death, incapacity, permanent absence overseas with no means of contact, refusal to sign in the case of dissent);
  • state the reasons on which it is based, unless the parties have agreed otherwise; and
  • be dated and state the place of arbitration.

A signed copy of the award must be delivered to each party.

There is no default time limit for making an award (Section 72(1), HKAO). The Court of First Instance of the High Court of Hong Kong (the Court) has the power to extend any time limit to render an award, even if it has expired (Section 72(2), HKAO).

Applicable procedural law for recourse against an award

Applicable legislation governing recourse against an award

2 Are there provisions governing modification, clarification or correction of an award?

Section 69(1) of the HKAO, which gives effect to Article 33 of the UNCITRAL Model Law, provides that within 30 days of receipt of the award (unless the parties have agreed on another time limit), a party, with notice to the other party, may request that the tribunal:

  • correct any computational, clerical or typographical errors or similar errors in the award; and
  • if so agreed by the parties, give an interpretation of a specific point or part of the award.

Within 30 days of receipt of the request, the tribunal must determine whether the request is justified and, if so, make the correction or give the interpretation. The interpretation will form part of the award. The tribunal can also correct any computational, clerical or typographical or similar error on its own initiative within 30 days of the date of the award (Section 69(1), HKAO).

Unless the parties have agreed otherwise, a party may also, with notice to the other party and within 30 days of receipt of the award, request an additional award as to claims presented in the arbitral proceedings but omitted from the award. The tribunal has 60 days to make the additional award if it considers the request to be justified (Section 69(1)(3), HKAO). The tribunal may extend the time limit to make a correction, interpretation or additional award (Section 69(1)(4), HKAO).

A correction or interpretation of the award, or an additional award, must be made in accordance with the requirements of the HKAO (Section 69(1)(5)) as to form, content and delivery of awards generally, set out in question 1. Section 69(2) of the HKAO further provides that the tribunal has the power to make other changes to an award that are necessary or consequential to the correction or interpretation of the award.

The tribunal may also review an award of costs within 30 days of the award if, when making the award, the tribunal was not aware of certain information relating to costs that it should have taken into account. The tribunal can then confirm, vary or correct the award of costs (Sections 69(3) and 69(4), HKAO).

Appeals from an award

3 May an award be appealed to or set aside by the courts? If so, on what grounds and what procedures? What are the differences between appeals and applications for set-aside?

An award may ordinarily not be appealed. However, the parties may opt into Section 5 of Schedule 2 of the HKAO pursuant to Section 99(e) of the HKAO if they wish to have the right to appeal an award on a question of law or to challenge an award on the grounds of serious irregularity. In those circumstances, the Court will have discretion in determining appeals and will have the power to either confirm, vary, remit or set aside the award.

In set-aside proceedings, the Court will not consider the substantive merits of the dispute or the correctness of the award, whether concerning errors of fact or law. The grounds for setting aside an arbitral award in Hong Kong are set out in Section 81 of the HKAO, which incorporates Article 34 of the UNCITRAL Model Law. The grounds for challenge include incapacity of a party, invalidity of the arbitration agreement, inability to present a party’s case, arbitrability, and conflict with Hong Kong public policy. Hong Kong public policy has been construed to mean ‘contrary to the fundamental conceptions of morality and justice of Hong Kong’, to be construed and applied narrowly (e.g., if an award was procured by fraud, corruption or other unconscionable behaviour (Hebei Import v. Polytek Engineering [1999] 2 HKC 205 at 233)).

An award can also be set aside if there has been a successful challenge to an arbitrator who has participated in proceedings resulting in an award (Section 26(5), HKAO).

An application to set aside the award under Section 81 of the HKAO must be made within three months of the date of receipt of the award or, if a request for a correction or interpretation of an award or an additional award has been made, from the date on which the request has been disposed of by the tribunal (Section 81(1)(3), HKAO). However, the Court has discretion to decide on a longer time limit (Sun Tian Gang v. Hong Kong & China Gas (Jilin) Ltd [2017] 1 HKC 69 at [90]).

The application is made by originating summons under Order 73, Rule 1 of the Rules of the High Court (Cap. 4A) (RHC). The application and any order thereon may be served out of the jurisdiction by leave of the Court (Order 73, Rule 7(1), RHC).

Applicable procedural law for recognition and enforcement of arbitral awards

Applicable legislation for recognition and enforcement

4 What is the applicable procedural law for recognition and enforcement of an arbitral award in your jurisdiction? Is your jurisdiction party to treaties facilitating recognition and enforcement of arbitral awards?

The HKAO is the applicable legislation in Hong Kong. It divides awards into four main categories for the purposes of enforcement:

  • Convention awards (defined in Section 2 of the HKAO as awards made in states or territories that are party to the New York Convention (the Convention), other than the People’s Republic of China (PRC)), the enforcement of which is governed by Division 2 of Part 10 of the HKAO;
  • Mainland awards (defined in Section 2 of the HKAO as awards made in any part of China other than Hong Kong, Macao and Taiwan), the enforcement of which is governed by Division 3 of Part 10 of the HKAO;
  • Macao awards (defined in Section 2 of the HKAO as awards made in the Macao Special Administrative Region), the enforcement of which is governed by Division 4 of Part 10 of the HKAO;
  • awards made in Hong Kong and other arbitral awards that are not Convention awards, Mainland awards or Macao awards, the enforcement of which is governed by Division 1 of Part 10 of the HKAO.

Hong Kong, as a Special Administrative Region of the PRC, is not itself a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (International Centre for Settlement of Investment Disputes, Washington 1965) (the ICSID Convention). However, when the PRC took over sovereignty of Hong Kong from the United Kingdom in 1997, the PRC notified the United Nations and the World Bank that the ICSID Convention would apply to Hong Kong.

The Arrangement Concerning Mutual Enforcement of Arbitral Awards Between the Mainland and the Hong Kong Special Administration Region allows for the enforcement of arbitral awards as between the PRC and Hong Kong, and similarly, the Arrangement Concerning Reciprocal Recognition and Enforcement of Arbitral Awards Between the Hong Kong Special Administrative Region and the Macao Special Administrative Region allows mutual recognition of arbitral awards between Hong Kong and Macao.

With regard to the New York Convention, see question 5.

The New York Convention

5 Is the state a party to the 1958 New York Convention? If yes, what is the date of entry into force of the Convention? Was there any reservation made under Article I(3) of the Convention?

As is the position with respect to the ICSID Convention, Hong Kong itself is not a separate contracting state party to the Convention. Nevertheless, the PRC, which contracted to the Convention on 22 January 1987, extended application of the Convention to Hong Kong in 1997 when it resumed sovereignty.

The PRC has made both reciprocity and commercial relationship reservations under Article I(3) of the Convention, which also bind Hong Kong. These mean that Hong Kong will apply the Convention (1) to recognise awards made in the territory of another contracting state (the reciprocity reservation), and (2) ‘only to differences out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration’ (the commercial reservation).

Recognition proceedings

Competent court

6 Which court has jurisdiction over an application for recognition and enforcement of arbitral awards?

The competent court in Hong Kong for the recognition and enforcement of arbitral awards is the Court of First Instance of the High Court of Hong Kong. See Sections 61 and 84 of the HKAO (granting leave to enforce an arbitral order, direction or award); Sections 87(1)(a), 92(1)(a) and 98A(1)(a) of the HKAO (enforcing a Convention, Mainland or Macao award).

Jurisdictional issues

7 What are the requirements for the court to have jurisdiction over an application for recognition and enforcement of arbitral awards? Must the applicant identify assets within the jurisdiction of the court that will be the subject of enforcement for the purpose of recognition proceedings?

Section 84 of the HKAO specifies that an award in arbitral proceedings by an arbitral tribunal, whether made within or outside Hong Kong, is enforceable in the same manner as a judgment of the Court that has the same effect, but only with leave of the Court, and otherwise subject to the provisions of the HKAO. Typically, if a party tries to enforce an arbitral award in Hong Kong, it is because there is some jurisdictional nexus with Hong Kong (e.g., assets located in Hong Kong), though this is not a statutory requirement.

Form of the recognition proceedings

8 Are the recognition proceedings in your jurisdiction adversarial or ex parte?

As discussed in greater detail in question 11, an application seeking leave to enforce an arbitral award under Section 84 of the HKAO is governed by Order 73, Rule 10 of the RHC, as amended by Section 13 of Schedule 4 of the HKAO. The application is made ex parte, supported by an affidavit. The Court may direct a summons to be issued where it considers it appropriate to give the other party an opportunity to be heard in an inter partes hearing. The recognition and enforcement proceedings themselves are adversarial in nature.

Form of application and required documentation

9 What documentation is required to obtain the recognition of an arbitral award?

Under Section 85 of the HKAO, a party seeking recognition of an arbitral award must produce the duly authenticated original award or a duly certified copy of it, the original arbitration agreement or a duly certified copy of it and, if the award or agreement is not in either or both of the official languages, a translation of it in either official language certified by an official or sworn translator or by a diplomatic or consular agent. The official languages of Hong Kong are English and Chinese.

Sections 88, 94 and 98C of the HKAO require similar documents for the recognition of a Convention award, Mainland award and Macao award, respectively.

Translation of required documentation

10 If the required documentation is drafted in a language other than the official language of your jurisdiction, is it necessary to submit a translation with an application to obtain recognition of an arbitral award? If yes, in what form must the translation be?

Yes. According to Sections 85, 88, 94 and 98C of the HKAO, if the final arbitral award is not in either or both of the official languages (i.e., English or Chinese), it is necessary for the award to be translated into either official language, and certified by an official or sworn translator or by a diplomatic or consular agent.

Other practical requirements

11 What are the other practical requirements relating to recognition and enforcement of arbitral awards?

Under Hong Kong law, the first step towards the recognition and enforcement of an arbitral award is the Court’s grant of leave to enforce the award.

The procedure for seeking leave to enforce an award under Section 84 is governed by Order 73, Rule 10 of the RHC, as amended by Section 13 of Schedule 4 of the HKAO. The application is usually made on an ex parte basis and the applicant must make full and frank disclosure of all relevant information in support of the application, including the existence of any proceedings to set aside the award. The failure to do so could be fatal to the application. The Court may direct a summons to be issued if it considers it appropriate to give the other party an opportunity to be heard in an inter partes hearing.

Once leave to enforce is granted, the Court’s order must be drawn up by or on behalf of the applicant and personally served on the respondent, delivered to his or her last known or usual place of business or abode, or in such other manner as the Court may direct.

The award may be enforced 14 days after the date of service of the Court’s order on the respondent or, under Order 73, Rule 10(6) of the RHC, the respondent may apply by way of summons and affidavit to set aside the order granting enforcement of the award within 14 days of being served. Note also that if an ‘application for setting aside or suspending’ an award has been made, then ‘the court before which enforcement of the award is sought . . . may, if it thinks fit, adjourn the proceedings for the enforcement of the award’ (Sections 86(4)(a), 89(5)(a) and 98D(5)(a), HKAO).

Recognition of interim or partial awards

12 Do courts recognise and enforce partial or interim awards?

Section 71 of the HKAO states that ‘an arbitral tribunal may make more than one award at different times on different aspects of the matters to be determined’, meaning that partial or interim awards can be recognised and enforced.

Grounds for refusing recognition of an award

13 What are the grounds on which an award may be refused recognition? Are the grounds applied by the courts different from the ones provided under Article V of the Convention?

The major grounds for refusing recognition and enforcement of an arbitral award in Hong Kong are set out under Sections 86(1), 89(2), 95(2) and 98D(2) of the HKAO, which substantially replicate the grounds set out in Article V(1) of the Convention.

Effect of a decision recognising an award

14 What is the effect of a decision recognising an award in your jurisdiction? Is it immediately enforceable? What challenges are available against a decision recognising an arbitral award in your jurisdiction?

The grant of leave to enforce by the Court is the first step towards recognition and enforcement of an award. The award is enforceable only after expiry of 14 days (or such other period that the Court may fix) from the date of the service of the Court’s order granting leave on the award debtor (Order 73, Rule 10(6), RHC). An award debtor on which such an order is served may, within 14 days of the date of service, seek to resist enforcement as a way of challenging the decision recognising an arbitral award.

Once an award becomes enforceable, it is enforced as though it were a local court judgment. As is the case with a local court judgment, the Court may stay enforcement of the award under Order 47, Rule 1(1) of the RHC, which states that ‘there are special circumstances which render it inexpedient to enforce the judgment’.

Decisions refusing to recognise an award

15 What challenges are available against a decision refusing to recognise an arbitral award in your jurisdiction?

If the Court has refused leave to enforce an award under Section 84(1) of the HKAO, an appeal against that decision may be made with leave of the Court pursuant to Section 84(3) of the HKAO.

Stay of recognition or enforcement proceedings pending annulment proceedings

16 Will the courts adjourn the recognition or enforcement proceedings pending the outcome of annulment proceedings at the seat of the arbitration? What trends, if any, are suggested by recent decisions? What are the factors considered by courts to adjourn recognition or enforcement?

It lies within the Court’s discretion to determine whether it will adjourn an application to enforce an arbitral award if an action to remit or set aside the award is pending. The Court will consider factors such as the merits and prospects of success of the set-aside application (Sections 86(4)(a), 89(5)(a) and 98D(5)(a), HKAO).

Note that Section 84 of the HKAO is subject to Section 26(2), which means that if an application for the enforcement of an arbitral award is made during the period when a challenge to the appointment of an arbitrator is pending before the Court, and the arbitral tribunal that made the award includes the challenged arbitrator, the Court may refuse enforcement of the award. This usually applies if the award on which enforcement is sought is a partial or interim award, rather than the final award.

Security

17 If the courts adjourn the recognition or enforcement proceedings pending the annulment proceedings, will the defendant to the recognition or enforcement proceedings be ordered to post security? What are the factors considered by courts to order security? Based on recent case law, what are the form and amount of the security to be posted by the party resisting enforcement?

Sections 86(4)(b), 89(5)(b) and 98D(5)(b) of the HKAO provide that the court before which enforcement of the award is sought can order security to be posted when an application for setting aside or suspension of the award has been made by a party.

The chief factors likely to be considered by the court when deciding whether or not to order security, include the strength of the grounds of challenge to the award, and the possible difficulty in enforcing the award if security is not ordered. (See Soleh Boneh International Ltd v. Government of the Republic of Uganda and National Housing Corp [1993] 2 Lloyd’s Rep 208 CA (Eng).)

Recognition or enforcement of an award set aside at the seat

18 Is it possible to obtain the recognition and enforcement of an award that has been fully or partly set aside at the seat of the arbitration? If an award is set aside after the decision recognising the award has been issued, what challenges are available against this decision?

Under Section 89(2)(f)(ii) of the HKAO, the court before which enforcement of the award is sought has discretionary powers to refuse enforcement if an award has been ‘set aside or suspended by a competent authority of the country in which, or under the law of which, it was made’. If the award has been set aside at the seat of the arbitration, the enforcing court in Hong Kong could nevertheless decide to enforce the award or it could proceed to allow enforcement of the award before the set-aside application has been completed.

Service

Service in your jurisdiction

19 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant in your jurisdiction?

The procedure for service with respect to applications to the Court for leave to enforce arbitral awards is governed by Order 65 of the RHC (service of documents in connection with proceedings within Hong Kong).

Order 65 prescribes that service can be effected by personal service, by post or by putting the documents through the letter box of the defendant at his or her usual or last known address, or, in the case of a corporation, at its registered address.

If it appears that it is impracticable to serve the documents in any of the methods described above, the claimant can apply to the Court for an order of substituted service. Substituted service of a document is effected by taking steps as the Court may direct to bring the document to the notice of the defendant. This type of service is generally made by affidavit ex parte. The affidavit should clearly state the type of substituted service proposed, and it must show that the writ is likely to reach the defendant or come to his or her knowledge if the method of substituted service is allowed.

Service out of your jurisdiction

20 What is the applicable procedure for service of extrajudicial and judicial documents to a defendant out of your jurisdiction?

There are different procedures that apply to service out of the jurisdiction, depending on the type of extrajudicial and judicial document being served. For documents that relate to arbitration, the following rules apply:

  • Order 73, Rule 7 of the RHC applies to summonses or orders made under the HKAO or any orders made thereon other than those by which an application for leave to enforce an arbitral award is made; Order 73, Rule 10(5) of the RHC applies to an order made further to an ex parte application seeking leave to enforce an arbitral award.
  • Pursuant to Order 73, Rule 7, summonses or orders made under the HKAO can be served out of the jurisdiction with leave of the Court provided that (1) the summons or order relates to an arbitration governed by Hong Kong law, save where the application is for leave to enforce an arbitral award, (2) the arbitration has been, is being or is to be held within Hong Kong, or (3) the originating summons is one by which an application is made under Section 45(2) (interim measures) or Section 60(1) (inspection, photographing, preservation, custody, detention, sale, sampling or experimenting of any relevant property) of the HKAO.
  • Pursuant to Order 73, Rule 10(5), an order made ex parte granting leave to enforce an arbitral award can be served without leave. However, if service needs to be outside the jurisdiction, pursuant to Order 11, Rule 1(1)(m), an originating summons by which an application is made to enforce an arbitral award or any orders made thereon can be served out of the jurisdiction with leave of the Court. This type of service is permissible with leave whether or not the arbitration is governed by Hong Kong law.

Identification of assets

Asset databases

21 Are there any databases or publicly available registers allowing the identification of an award debtor’s assets within your jurisdiction?

Certain databases are publicly available in Hong Kong and can be used for the identification of assets. For example, land records with information about property assets are kept by the Land Registry, which is open to public searches.

Information available through judicial proceedings

22 Are there any proceedings allowing for the disclosure of information about an award debtor within your jurisdiction?

Section 84 of the HKAO provides that, with leave of the Court, an arbitral award may be enforced in the same manner as a judgment of the Court, subject to the provisions of the HKAO, meaning that orders facilitating the enforcement of judgments, such as the ability to examine judgment debtors under Orders 48 and 49B of the RHC, are also available in relation to the enforcement of arbitral awards.

Pursuant to Order 48 of the RHC, on an ex parte application of the award creditor, the Court may order the award debtor to attend before the Registrar, or such officer as the Court may appoint, and be orally examined on the following matters: (1) whether there are any debts owing to the award debtor by other persons, and (2) whether the award debtor has any other property or financial resources that could be used for satisfying the award. If the award debtor is a limited company, the order can be made against a senior officer of the company.

Pursuant to Order 49B of the RHC, where the award is for the payment of a specified sum of money, on an ex parte application of the award creditor, the Court may order an examination of the award debtor regarding his or her assets, liabilities, income and expenditure and of the disposal of any assets or income. If it appears to the Court that there is reasonable cause to believe that an order to appear before the Court for examination may be ineffective to secure the award debtor’s attendance, the Court may order that the award debtor be arrested and brought before the Court on the day following the day of arrest.

Further, pursuant to Order 38, Rules 13 and 14 of the RHC, the judgment debtor may apply for an order (1) to require a non-party witness to attend any proceedings in the cause or matter and produce any document considered by the Court to be necessary, or (2) to compel the attendance of a non-party witness to give evidence or to produce documents or other material evidence.

Order 38 does not apply to discovery applications against non-party banks, to which Section 21 of the Evidence Ordinance applies. Section 21 provides that: ‘On the application of any party to any proceedings, the court or judge may order that such party be at liberty to inspect and take copies of any entries in a banker’s record for any of the purposes of such proceedings.’ The court in Pacific King Shipping Holdings Pte Ltd v. Huang Ziqiang [2015] HKEC 76 noted that, although the court could grant such an order in the appropriate circumstances, it ‘would not lightly use its powers to order disclosure of full information touching the confidential relationship of banker and customer’.

Enforcement proceedings

Availability of interim measures

23 Are interim measures against assets available in your jurisdiction? May award creditors apply such interim measures against assets owned by a sovereign state?

Interim measures against assets are available in Hong Kong. Award creditors may apply for such measures before the arbitral tribunal or the Court.

Pursuant to Section 35 of the HKAO, unless otherwise agreed by the parties, the arbitral tribunal may grant interim measures upon the request of any party. Those measures may be granted to a party (1) to maintain or restore the status quo pending determination of the dispute, (2) to take any action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process, (3) to preserve assets out of which a subsequent award may be satisfied, and (4) to preserve evidence that may be relevant or material to the resolution of the dispute.

Pursuant to Section 45 of the HKAO, the Court also may grant interim measures in support of arbitration upon the application of any party. The power conferred by this Section may be exercised by the Court irrespective of whether or not similar powers may be exercised by an arbitral tribunal under Section 35 in relation to the same dispute, though the Court may decline to do so if ‘the interim measure sought is currently the subject of arbitral proceedings’ or if it ‘considers it more appropriate for the interim measure sought to be dealt with by the arbitral tribunal’ (Section 45(4), HKAO).

Award creditors cannot apply such interim measures against assets owned by a sovereign state. Foreign states enjoy absolute immunity from enforcement and jurisdiction in Hong Kong, unless the foreign state has agreed to waive its sovereign immunity (see Democratic Republic of the Congo v. FG Hemisphere Associates LLC (2011) 14 HKCFAR 95). With respect to the PRC, because Hong Kong is a Special Administrative Region of the PRC, the PRC will have crown immunity as opposed to sovereign immunity, although the practical effect is similar. Whether or not a PRC entity (such as a PRC state-owned enterprise) would be able to shield its assets through crown immunity, would depend on a test of control (i.e., whether or not the entity in question is able to exercise powers independent of the PRC government), in which case it is less likely to benefit from crown immunity (see The Hua Tian Long (No.3) [2010] 3 HKC 557).

Procedure for interim measures

24 What is the procedure to apply interim measures against assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before applying interim measures? If yes, are such proceedings ex parte?

Pursuant to Section 35 of the HKAO, an award creditor can apply directly to an arbitral tribunal seated in Hong Kong for interim measures against assets. There is no requirement to obtain prior court authorisation to make such an application. Further, Section 37 of the HKAO (unless the parties have agreed otherwise) allows a party to ‘without notice to any other party, make a request for an interim measure’ (i.e., a party can apply for an interim measure on an ex parte basis).

As discussed in question 23, the Court can grant interim measures under Section 45 of the HKAO and this power can be exercised irrespective of whether similar powers may also be exercised by an arbitral tribunal under Section 35 of the HKAO in relation to the same dispute. According to Order 29, Rule 1(2) of the RHC, whereby the Court grants interim measures, where ‘the applicant is the plaintiff and the case is one of urgency, such application may be made ex parte on affidavit’.

Interim measures against immovable property

25 What is the procedure for interim measures against immovable property within your jurisdiction?

With respect to an application for interim measures, Hong Kong law does not distinguish between immovable, movable, intangible or other forms of property. The procedure set out in question 24 will apply to interim measures for all types of assets or property.

Interim measures against movable property

26 What is the procedure for interim measures against movable property within your jurisdiction?

See question 24.

Interim measures against intangible property

27 What is the procedure for interim measures against intangible property within your jurisdiction?

See question 24.

Attachment proceedings

28 What is the procedure to attach assets in your jurisdiction? Is it a requirement to obtain prior court authorisation before attaching assets? If yes, are such proceedings ex parte?

The procedure to attach assets in Hong Kong is to apply to the court. The two main orders by which assets may be attached are garnishee orders and charging orders.

Garnishee order

Pursuant to Order 49, Rule 1 of the RHC, in certain circumstances, award creditors, for the purpose of enforcing the award, may apply to the Court for a garnishee order. Order 49, Rule 2 of the RHC states that an application for a garnishee order must be made ex parte, supported by an affidavit or affirmation (1) stating the name and the last known address of the judgment debtor, (2) identifying the judgment to be enforced and stating the amount remaining unpaid under it at the time of the application for the garnishee order, (3) stating that to the best of the information available to, or belief of, the applicant, the garnishee is within the jurisdiction and is indebted to the judgment debtor, and stating the sources of the applicant’s information or the grounds for his or her belief, and (4) stating, if the garnishee is a bank having more than one place of business, the name and address of the branch at which the judgment debtor’s account is believed to be held or, if it be the case, that this information is not known to the applicant.

The garnishee order initially will be an order nisi. The Court may grant the award creditor an order absolute upon further consideration of the matter. The garnishee should pay the amount specified in the order to the award creditor, and any payment made by the garnishee in compliance with the order shall be a valid discharge of his or her liability towards the award debtor to the extent of the amount paid (Order 49, Rule 3, RHC).

Charging order

For the purpose of enforcing an award, the Court may make an order imposing on any property of the award debtor, a charge to secure the payment of any debt due, or to become due under that award (Order 50, Rule 1, RHC). A charging order can be imposed on the following types of property: land or real estate, securities and funds in court (Section 20A(2), High Court Ordinance).

An application for a charging order may be made ex parte, supported by an affidavit or affirmation (1) identifying the award to be enforced and stating the amount remaining unpaid under it as at the date of the application, (2) stating the name of the award debtor and of any creditor whom the applicant can identify, (3) giving full particulars of the subject matter of the intended charge, and (4) verifying that the interest to be charged is owned beneficially by the award debtor. Unless the court otherwise directs, the supporting affidavit or affirmation may contain statements of information or belief and the sources and grounds for that information or belief (Order 50, Rule 1(3), RHC).

An order made by an ex parte application will be an order nisi. Upon further consideration of the matter, the Court may make the charging order absolute. However, the charging order is not a direct mode of enforcement, but is rather an indirect mode in the sense that it provides the award creditor with security, in whole or in part, over the property of the award debtor. To obtain the actual proceeds of the charge, the award creditor must then proceed to apply further for an order to sell the specified assets and satisfy his or her award (Order 50, Rule 3, RHC).

Attachment against immovable property

29 What is the procedure for enforcement measures against immovable property within your jurisdiction?

With respect to an application for attachment, Hong Kong law does not distinguish between immovable, movable, intangible or other forms of property. The procedure set out in question 28 applies to applications for attachment for all types of property.

Attachment against movable property

30 What is the procedure for enforcement measures against moveable property within your jurisdiction?

See question 28.

Attachment against intangible property

31 What is the procedure for enforcement measures against intangible property within your jurisdiction?

See question 28.

Enforcement against foreign states

Applicable law

32 Are there any rules in your jurisdiction that specifically govern recognition and enforcement of arbitral awards against foreign states?

In 2011, the Hong Kong Court of Final Appeal held in Democratic Republic of the Congo v. FG Hemisphere Associates (2011) 14 HKCFAR 95 that an arbitral award against a foreign state cannot be enforced in Hong Kong unless the foreign state has waived its sovereign immunity. The Court stated that a waiver must be made ‘in the face of the Court’. Further, the Court observed that when a state enters into ‘an arbitration agreement with a private individual or company, it involve[s] merely the assumption of contractual obligations vis-à-vis the other party to the agreement. That act did not constitute a submission to any other State’s jurisdiction’.

Service of documents to a foreign state

33 What is the applicable procedure for service of extrajudicial and judicial documents to a foreign state?

The procedure for service of extrajudicial and judicial documents to a foreign state is governed by Order 11, Rule 7 of the RHC.

Subject to the sovereign state having waived its immunity, as discussed in question 32, after obtaining leave to serve under Order 11, Rule 1, a person who wishes to have the writ served on the state must lodge in the Registry (1) a request for service to be arranged by the chief executive, (2) a copy of the writ and (3) except where the official language of the state is, or the official languages of that party include, English, a translation of the writ in the official language or one of the official languages of that state.

Documents duly lodged will then be sent by the Registrar to the Chief Secretary for the writ to be served on the state.

Immunity from enforcement

34 Are assets belonging to a foreign state immune from enforcement in your jurisdiction? If yes, are there exceptions to such immunity?

Assets belonging to a foreign state are immune from enforcement in Hong Kong, unless the foreign state has waived immunity.

Waiver of immunity from enforcement

35 Is it possible for a foreign state to waive immunity from enforcement in your jurisdiction? If yes, what are the requirements of such waiver?

It is possible for a foreign state to waive immunity from enforcement in Hong Kong. For the requirements of such a waiver, see question 32.

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