Read the full judgment text of HCCT 7/2023 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 8 March 2024 before Deputy High Court Judge Reyes, SC.
Procedure — Arbitration — Enforcement and recognition of Hong Kong-seated cross-border arbitration awards — Anti-recognition application — Security for costs and Hadkinson Order — Whether to impose security as condition for hearing anti-recognition application — AO sections 81, 86(4), 89(5); RHC Order 73 Rule 10A — Hadkinson Order requires wilful non-compliance amounting to contempt impeding course of justice — Commercial dispute and mere refusal to pay debts does not amount to contempt — Right of respondent to be heard unconditionally — Security for costs not justified solely because respondent is non-Hong Kong company — Normal business risk in cross-border commercial arbitration — Court must be cautious imposing draconian conditions barring respondent from defending — Dismissal of security application — Claimants are entitled to costs. This case concerns the discretion of Hong Kong courts to impose security as condition precedent to the hearing of an anti-recognition application against enforcement of Hong Kong-seated arbitral awards. The claimants sought a Hadkinson Order and security for sums due under prior judgments and costs, alleging respondent's wilful non-compliance and obstructionism. The court distinguished commercial non-payment from contempt and emphasised access to justice principles. The court held AO section 86(4) inapplicable without pending setting aside application. Order 73 Rule 10A confers discretion but large security orders risk barring respondent’s defence. Security for costs not justified merely by respondent’s non-Hong Kong status and lack of evidence of impecuniosity. Orders for nearly HK$1.9 million security for costs excessive; HK$600,000 considered reasonable but no order made. The application for security was dismissed, with costs awarded to the respondent.
Legal issues: Whether a Hadkinson Order should be granted · Power to order security under AO section 86(4) and Order 73 Rule 10A · Whether to order security for costs for opposing Anti-Recognition Application
Outcome: Claimants' Security Application dismissed; claimants ordered to pay respondent’s costs of the Security Application.
Cited by 1 case · Cites 3 cases