The Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between PRC and Hong Kong was concluded on 27 November 2020 which introduced 4 aspects to the existing arrangement.
Article 1 of the Supplemental Arrangement provides that the procedures of enforcing arbitral awards in either the PRC or Hong Kong cover not only the enforcement stage but also the recognition stage.
This bring the arrangement to be in line with the New York Convention under which enforcement of arbitral awards is regarded as a two-stage process, namely the recognition and enforcement stages.
Article 2 of the Supplemental Agreement removes the restriction in which Hong Kong Courts could only enforce arbitral awards made by “recognized Mainland arbitral authorities”.
Therefore, arbitral awards made by foreign arbitration institutions like the International Chamber of Commerce (ICC) are now enforceable.
The Supplemental Arrangement has also expressly stated that any ad hoc and institutional arbitral awards issued in Hong Kong pursuant to the Arbitration Ordinance (Cap. 609) may also be enforceable by the PRC Courts.
Article 3 of the Supplemental Arrangement allows enforcement proceedings in both PRC and Hong Kong Courts to be taken out at the same time. Either Court could request the other to provide information in relation to the enforcement proceedings to ensure that the award creditor can recover as much as he can and the total amount recovered by both Courts would not exceed the amount of the arbitral award.
Article 4 of the Supplemental Agreement clarifies that the PRC and Hong Kong Courts may impose preservation or mandatory measures e.g. freezing order or injunction throughout the entire arbitration proceedings, at any time before or after the Court’s acceptance of an application to enforce an arbitral award.
All of the above four Articles have already been implemented by way of judicial interpretation as promulgated by the Supreme People’s Court on 27 November 2020 in the PRC immediately following the execution of the Supplemental Arrangement.
Articles 1 and 4 have come into immediate effect in Hong Kong on 27 November 2020 while Articles 2 and 3 would become effect after the Arbitration Ordinance has been amended accordingly.
For legal advice or services on arbitration proceedings, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public. [Tel: +852 2856 3799 Email: cac@ccsn.hk]
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