In G v N [2024] HKCFI 721 (judgment date: 11 March 2024), a Hong Kong court dismissed an application to set aside the enforcement of an interim order which an arbitrator had made requiring a party to take steps to dismiss the proceedings commenced by it against the other party and the other party’s subsidiaries. In doing so, the court considered and clarified the distinction between interim measures and awards for the purpose of enforcement and setting-aside proceedings, and the separate regimes that apply to them.

In May 2024, the Hong Kong Government introduced the Construction Industry Security of Payment Bill (Bill) to the Legislative Council for first reading. If the Bill is passed into law, the Bill will introduce a statutory security of payment regime for both public sector and private sector construction contracts in Hong Kong. This is the second article in a series of two articles. In the earlier article, we compared the clauses in the Bill against the public works contracts pilot programme security of payment provisions (Pilot Provisions) promulgated by the Development Bureau (DevB) in its Technical Circular (Works) No.6/2021 (Circular) for the contractual regime, and considered the key development, changes and differences. In this article, we will take a deeper look at the changes made in the Bill concerning the treatment of variation claims and time-related disputes in the payment process and the adjudication process.

In G v N [2023] HKCFI 3366 (judgment date: 29 December 2023), a Hong Kong court considered the question of whether and to what extent it is open for the court to review an arbitrator’s ruling on matters of public policy. The court stayed the enforcement of the award and remitted the award to the arbitrator. Later, in [2024] HKCFI 655 (judgment date: 9 February 2024), the same judge considered the case to have raised an “important and novel” question as to what is the proper scope of judicial intervention in arbitral awards on grounds of public policy, and granted leave to appeal to the Court of Appeal.

In May 2024, the Hong Kong Government introduced the Construction Industry Security of Payment Bill (Bill) to the Legislative Council for first reading. If the Bill is passed into law, the Bill will introduce a statutory security of payment regime for both public sector and private sector construction contracts in Hong Kong. Currently, a contractual security of payment regime is in place for public sector construction contracts only. In this article, we will compare the clauses in the Bill against the public works contracts pilot programme security of payment provisions (Pilot Provisions) promulgated by the Development Bureau (DevB) for the contractual regime, and consider the key development, changes and differences. This is the first article in a series of two articles. In the next article, we will take a deeper look at the change of two features in the payment process and the adjudication process relating to variation claims and time-related disputes.

The long-anticipated Construction Industry Security of Payment Bill (“Bill”) was gazetted on 17 May 2024 and was introduced into LegCo for its first reading on 29 May 2024. The Bill aims to establish a legislative framework for addressing improper payment practices among contracting parties in the Hong Kong construction industry. Once in force, the Bill will replace the Development Bureau’s pilot scheme for the introduction of security of payment provisions into public sector construction contracts which we discussed in our earlier Insights at Security of payment circular issued by the Development Bureau of Hong Kong – to take effect from 31 December 2021 and The new security of payment regime in Hong Kong – key issues to consider before its implementation.

Competition Commission v W. Hing Construction & others [2022] HKCA 786 (judgment date: 2 June 2022) concerned an appeal from the first Hong Kong judgments concerning pecuniary penalties for contraventions of competition rules. The Court of Appeal held that pecuniary penalties for contraventions of competition rules are to be assessed based on the economic activities and conduct of the undertakings who are answerable for the contraventions, and that the legal or natural persons (entities) constituting such undertakings jointly and severally are liable for the pecuniary penalties. Accordingly, the Court of Appeal allowed the appeals by the Competition Commission (Commission) against two judgments in which the Competition Tribunal (Tribunal) reduced the pecuniary penalties ordered against the respondents in recognition of the respondents’ limited participation in the anti-competitive conduct because they had passed down various obligations through subcontracting and partnership arrangements in return for a portion of the value of sales related to the contravention.

Hong Kong court continued the validity of a Mareva injunction granted in connection with the enforcement proceedings of a CIETAC award, and dismissed an application for security or fortification in support of the cross-undertaking as to damages. This case confirms the Hong Kong courts’ pro-arbitration and pro-enforcement approach. G v X highlights that Hong Kong courts generally are more prepared to grant Mareva injunctions and other relevant orders in aid of enforcement proceedings of arbitral awards, in comparison with similar applications made at the interlocutory stage in court litigation. The judgment also illustrates how Hong Kong courts will apply the usual tests, and exercise its discretions, in respect of the grant of Mareva injunctions in the context of enforcement proceedings. The confirmation that parties may seek simultaneous enforcement in both the Mainland and Hong Kong under the Supplemental Arrangement is welcomed as a recognition of the continuous development of judicial cooperation and mutual legal assistance between Hong Kong and Mainland China, an important factor contributing to Hong Kong’s rightful place as an attractive seat of arbitration, particularly for cross-border disputes with elements relating to Mainland China.

In AW and others v PY and another [2022] HKCFI 1397 (judgment date: 13 May 2022), a Hong Kong court held that it has no power to extend the time to challenge an arbitral award under Article 34 of the Model Law, as adopted by Section 81 of the Arbitration Ordinance of Hong Kong. The present case is important in establishing that Hong Kong courts do not have the power to extend the time for making a setting-aside application under Article 34 of the Model Law. This serves as a reminder to parties seeking to challenge an award under the Article to act in a prompt and timely manner.

In Arjowiggins HKK2 Ltd v X Co [2022] HKCFI 128, after dismissing the claims and declining to grant the pleaded remedy, the tribunal invited submissions from the parties on an alternative remedy and ultimately granted relief that was not asked for in the pleadings. The respondent in the arbitration applied to set aside the award under Article 34(2)(a)(iii) of the UNCITRAL Model Law as incorporated by section 81(1) of the Arbitration Ordinance. In a judgment dated 12 January 2022, the Hong Kong Court of First Instance set aside the award on the ground that the award contained decisions on matters beyond the scope of the parties’ submission to arbitration.