Hong Kong & Mainland China Sign Supplemental Arrangement for Mutual Enforcement of Arbitral Awards

Hong Kong & Mainland China Sign Supplemental Arrangement for Mutual Enforcement of Arbitral Awards

Hong Kong & Mainland China Sign Supplemental Arrangement for Mutual Enforcement of Arbitral Awards 1400 788 Charing

The Arrangement Concerning Mutual Enforcement of Arbitral Awards between Hong Kong and the Mainland has been implemented since 1 February 2000 (the “Arrangement”) for the purpose of facilitating enforcement of arbitral awards between the two jurisdictions.

20 years have since passed, and on 27 November 2020, Hong Kong and the Mainland signed the Supplemental Arrangement Concerning Mutual Enforcement of Arbitral Awards between the Mainland and the Hong Kong Special Administrative Region (the “Supplemental Arrangement”) to make several amendments to the original Arrangement.

The Supplemental Arrangement seeks to clarify some issues and enhance the enforcement process , and aims to bring the enforcement process of Mainland arbitral awards more in line with the New York Convention.

The supplemental arrangements are as follows:-

  1. It has now been clarified expressly in the Supplemental Arrangement that arbitral awards enforced under the Arrangement are recognised by the Hong Kong courts and Mainland Courts. Previously, the Arrangement did not refer to “recognition” of the arbitral awards but only dealt with enforcement of the awards.
  1. The Supplemental Arrangement now expressly provides that the relevant courts may impose preservation or mandatory measures on an application by the relevant party prior to enforcement of the arbitral award.
  1. The Supplemental Arrangement extends the scope of Mainland awards that can be enforced in Hong Kong as long as the award is rendered pursuant to the Arbitration Law of in the PRC. This has the effect of aligning the definition of the scope of arbitral awards with the prevalent international approach of “seat of arbitration” under the New York Convention.
  1. The Restriction in the Arrangement regarding simultaneous enforcement proceedings in both jurisdictions has now been removed. Award creditors may now commence enforcement actions in both the Mainland and Hong Kong at the same time, provided that the total amount to be recovered from enforcement does not exceed the amount determined in the arbitral award.

The changes under the Supplemental Arrangement are no doubt welcomed by the legal profession in both jurisdictions.

The Supplemental Arrangement came into effect on the same date of signing on 27 November 2020 in the Mainland.  In Hong Kong, Paragraphs 1 and 2 above came into effect on 27 November 2020, whilst Paragraphs 3 and 4 will only come into effect after the necessary amendments have been made to the Arbitration Ordinance (Cap. 609).

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