Read the full judgment text of HCCT000024/1998 on BabelCite. This 高等法院原訟法庭 judgment was delivered on 14 May 1998 before Hon Mr Justice Cheung.
Security for costs — Arbitration commenced before 21 June 1997 — Application of transitional provisions under Arbitration (Amendment) Ordinance s.18 — Power retained by Court under Arbitration Ordinance s.14(6)(a) — Security ordered to be furnished by foreign defendant company in arbitration proceedings — Discretion exercised under Companies Ordinance O.23, r.1 and s.357 to protect against risk of non-enforcement of costs — No high probability of success shown by defendant to refuse security — Absence of assets in Hong Kong and difficulties in enforcement in China considered — Security ordered in total HK$800,000, payable in two stages — Arbitration stayed until security furnished, failure to comply results in dismissal of arbitration — Costs nisi ordered to Plaintiffs. The Court declined submission that Arbitral Tribunal had power to refuse security for costs on grounds relating to defendant's foreign incorporation and control under s.2GB(3) of the Amendment Ordinance, applying transitional provisions. The quantum of security was reduced from solicitor-client fees claimed to more appropriate party-party basis. Parties to agree form of security and supply draft order for approval.
Legal issues: Power to order security for costs in arbitration commenced before 21 June 1997 · Discretion to order security for costs
Outcome: Security for costs ordered in favour of Plaintiffs