Hong Kong: Post arbitration award arrest jurisdiction


Published: 27 November 2014

Seasoned litigators will know that winning a case is just half the battle, and that until a judgment or award is successfully enforced the job is not "done". Recently the High Court in Hong Kong ruled on an interesting case where in rem jurisdiction was invoked to seek enforcement of a foreign arbitration award.

The Association is grateful to Messrs. Ince & Co. for contributing to this update.

The development

The Hong Kong High Court has recently allowed the use of its in rem jurisdiction for a shipowner to take action against a vessel in order to satisfy a foreign arbitration award pursued in personam.

While this case did more than raise a few eyebrows, on a proper construction it did not change the law or open up any new avenue. Indeed it appears that the successful party simply walked a path less trodden and in the process highlighted an otherwise often overlooked legal position under common law.

In the attached article, Messrs. Ince & Co. set out the circumstances of this case and how it might be useful to those seeking to enforce an award or judgment in the future.

Litigation loss prevention advice

A lot of time and effort may be expended, as well as very significant sums of money, in order to obtain a judgment or arbitration award. At times the pursuit of this outcome distracts from the most important aspect to litigation: ensuring that the final outcome makes the entire venture economically viable. In other words, judgments and awards are very expensive affairs with a poor ROI if they are not honoured or successfully enforced.

The Association would therefore recommend that equal time and thought are given at the outset of a matter to how it can be secured, as much as is given to the substantive merits of the claim to be pursued.

Where the prospects of getting paid following a successful case are poor as are the prospects of enforcing a judgment or award it will be prudent to conduct a rigorous stress test on the proposed case to weigh up its likely cost against the chance of the hoped for outcome. Such "reality testing" helps to ensure that any subsequent step is taken with a due appreciation of the litigation risk that may follow.