Read the full judgment text of HCCT 48/2023 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 3 April 2024 before Deputy High Court Judge Jonathan Wong.
Arbitration — Enforcement of Mainland arbitration award — Security for claim and security for costs — Application under Order 73 rule 10A of the Rules of the High Court (Cap 4A) — Scope and application of Soleh Guidelines — Retrospective application of Mainland Civil Code Article 563 — Public policy defence — Alleged conflict of interest and breach of confidentiality — Section 95 application to set aside enforcement order. The Plaintiff commenced arbitration and obtained a final award exceeding RMB232 million against the Defendant. The Defendant filed a summons to set aside enforcement of the award on grounds including alleged improper retrospective application of Mainland law and conflict of interest of Plaintiff’s counsel. The Plaintiff applied for security for claim and costs pending determination of the Section 95 application. The court held that the Soleh Guidelines, focusing on manifest validity and ease of enforcement, properly govern security applications under Order 73 rule 10A, including passive remedy cases. The court rejected arguments to adopt a 'flimsy test' from English law, reaffirming established Hong Kong authorities. The retrospective application of Article 563 of the Mainland Civil Code, allowing termination of indefinite contracts with notice, was not contrary to Hong Kong public policy. Alleged conflict of interest was differentiated from breach of confidentiality and not sufficiently supported by evidence to deny enforcement. Given the manifest validity of the award and potential difficulty in enforcement, security was ordered: RMB150 million for the claim, HK$900,000 for costs, and payment of unpaid costs within 14 days, failing which the Section 95 application would be dismissed, allowing enforcement. Costs of the present application were also ordered against the Defendant.
Legal issues: Application of Soleh Guidelines under RHC Order 73, rule 10A · Whether retrospective application of Article 563 of Mainland Civil Code violates public policy · Conflict of interest and breach of confidentiality in arbitral proceedings · Security for claim and security for costs
Outcome: The application for security for claim and for costs is granted. Defendant must pay unpaid costs and provide security or the Section 95 application stands dismissed.
Cited by 1 case · Cites 11 cases