Concurrent enforcement of arbitral awards in Mainland China and Hong Kong to be permissible

Since the signing of the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between Mainland China and the Hong Kong Special Administrative Region (the “Supplemental Arrangement”) on 27 November 2020, certain enhancements introduced, including clarifications on the availability of interim relief post award, have come into force. The remainder of the changes are set to be implemented from 19 May 2021 following the gazette of the Arbitration (Amendment) Ordinance 2021 on 19 March 2021.

From 19 May 2021, an award creditor may commence proceedings for recognition and enforcement of an award in the relevant courts of Mainland China and Hong Kong concurrently if the award debtor has assets in both jurisdictions. This is a welcome development from the previous position where the award creditor was only permitted to seek recovery in one jurisdiction at one time, and only when recovery proved insufficient to satisfy the total amount awarded (or after enforcement had been refused) could the award creditor bring enforcement proceedings in the other jurisdiction.  By then, the award creditor may run into issues such as expiry of the statutory limitation period and dissipation of the award debtor’s assets.

An additional feature of the Supplement Arrangement is that recognition of a Mainland arbitral award under the Arbitration Ordinance is no longer confined to awards made by a recognized Mainland arbitral authority designated on the list published in accordance with section 97 of the Arbitration Ordinance.  From 19 May 2021, any arbitral award made in accordance with the Arbitration Law of Mainland China can be recognised in Hong Kong subject to the requirements set out in Division 3 of the Arbitration Ordinance. 

Please refer to our previous client alert which discussed the Supplemental Arrangement in detail.