Tanglau International Arbitration newsletter
We are pleased to introduce the Tanglau International Arbitration newsletter, providing you with recent updates on significant arbitration cases, legislative changes and trends in arbitration in Hong Kong, Mainland China and beyond. This newsletter will serve as your primary resource for news and analysis in the field of arbitration.
Whether you are a seasoned arbitrator, a legal professional or simply interested in this evolving area of practice, we hope that our newsletter keeps you informed and engaged.
In this inaugural edition, which encompasses legal developments from October 2024 to March 2025, we examine several noteworthy arbitration cases and provide our insights on pivotal aspects of the arbitration landscape.
Notable Hong Kong cases | Mainland arbitration updates | Overseas jurisdictions observations | Policy tendency
| Court orders a foreign-based applicant and an applicant with negligible assets to set aside HKIAC arbitral award to pay security for costs
P1 and another v D (HCCT59/2023) [2024] HKCFI 3052 1 November 2024 Summary: The arbitral tribunal issued a partial final award in a HKIAC arbitration in 2023, finding in favour of D (i.e. claimant in the arbitration) that Ps (i.e. P1 and P2, who are respondents in the arbitration) breached an investor framework agreement. Ps sought to set aside the award and D applied for security for costs against Ps. The court allowed D’s application on the basis that under Order 23, rule 1 of the Rules of the High Court (Cap. 4A), P1 is not an ordinary resident of Hong Kong and lacks presence in Hong Kong, therefore it is difficult to enforce an adverse costs order against P1; and that P2, though a Hong Kong company, has no substantial assets in Hong Kong under section 905 of the Companies Ordinance (Cap. 622). The court further ordered that, if no security for costs is paid in, Ps’ set-aside application would be dismissed with costs awarded to D. It is important to note that the court held that requiring a foreign party to pay security for costs in arbitration-related proceedings – which often involve international or cross-border entities during the “challenge phase” (where the court’s supervisory jurisdiction, such as setting aside an award, is invoked), as opposed to the “determination phase” (i.e. the tribunal determining the parties’ substantive rights and liabilities in arbitration) – is consistent with policy objectives to promote Hong Kong as a regional centre for arbitration and the legislative framework of the Arbitration Ordinance (Cap. 609) and the Rules of the High Court (Cap. 4A). Takeaway: During the challenge phase, foreign residence is a crucial factor that the Hong Kong court considers in security for costs applications in arbitration-related proceedings. |
| Non-signatory beneficiary bound by arbitration agreement: Stay of proceedings in favour of arbitration upheld
Techteryx Ltd v Legacy Trust Company Ltd. and others (HCA 1906/2023, 11/02/2025) [2025] HKCFI 665 11 February 2025 Summary: In a claim involving alleged fraud and mismanagement of digital token reserves, the plaintiff (“Techteryx”) brought proceedings in Hong Kong against several defendants, including Crossbridge, which sought a stay based on an arbitration agreement in an investment management mandate with Legacy Trust (the trustee). The court held that as Techteryx was suing in a derivative capacity on behalf of the trustee, it was prima facie bound by the arbitration agreement; and any challenge to the validity of the arbitration clause (including on public policy or fraud grounds) should be determined by the arbitral tribunal. The court also found that Techteryx’s failure to disclose the arbitration agreement when seeking leave for service out was a matter of poor judgement but not fatal, ordering a stay of proceedings in favour of arbitration. Takeaway: Beneficiaries bringing derivative claims on behalf of trustees may be bound by arbitration agreements to which they are not signatories, particularly where the claim is to enforce obligations under the relevant contract which contains a valid arbitration clause. Hong Kong courts will generally defer to the arbitral tribunal to determine jurisdictional challenges, including those based on public policy. Parties should be mindful that derivative or trust-based claims may still be subject to arbitration clauses – and attempts to circumvent arbitration by relying on non-signatory status are unlikely to succeed. |
| Court affirms that oppressive claims and loss of trust and confidence claims fall within the scope of arbitration
P1 & P2 v MR [2025] HKCFI 1110 18 March 2025 Summary: The plaintiffs (i.e. respondents in arbitration) applied to set aside an order made by the arbitral tribunal that it has jurisdiction over the claims made by the defendant (i.e. claimant in arbitration). The defendant is a minority shareholder in the first Plaintiff, a Cayman company. The dispute arose from certain transaction agreements, including share subscription and shareholders’ agreements, containing arbitration clauses. The defendant’s claims in the arbitration include, inter alia, alleged breaches by the second plaintiff, causing oppressive conduct and loss of trust and confidence (which may support a potential application for a winding up order on just and equitable grounds). The plaintiffs argued these claims, linked to Cayman Islands company law, shall be exclusively decided by the Cayman court. The Hong Kong court, applying the Privy Council case of Family-Mart China Holding Co Ltd v Ting Chuan (Cayman Islands) Holding Corp [2024] Bus LR 190, held that while winding-up orders are for courts, claims of breaches and oppressive conduct are arbitrable if tied to the relevant agreements. Takeaway: The court clarified that – while ultimately only the court is entitled to form an opinion as to whether a petitioner is entitled to a winding-up order and an arbitral tribunal is not entitled to make any effective or binding opinion of its own on such matter – the tribunal can still decide on matters such as whether there are breaches of the relevant agreement or whether there was oppressive or discriminatory conduct which may subsequently support the ground of petitioning the court to make a winding up order. |
| No time extension allowed for a belated application to set aside enforcement of a CIETAC arbitral award
宁波梅山保税港区和光泰润二号股权投资中心(有限合伙) (“Applicant”) v 北京微影时代科技有限公司 (“Respondent”) (HCCT61/2022) [2024] HKCFI 2723 14 October 2024 Summary: The Respondent sought an extension to apply to set aside an enforcement order in respect of a CIETAC arbitral award more than 12 months after the enforcement order was served on the Respondent on 14 October 2022. Despite having indicated its intention to apply to set aside the enforcement order in a letter dated 28 October 2022, the Respondent did not pursue the application in a timely manner. The court rejected the Respondent’s explanations which were based on the erroneous advice of its Mainland Chinese lawyers and the impact of COVID, finding that the Respondent deliberately chose not to make the application, possibly in the hope of a favourable outcome from parallel setting-aside proceedings in Mainland China. On this basis, the court dismissed the Respondent’s application due to the inordinate delay. Takeaway: Parties should not take a “wait and see” approach when seeking to set aside an order to enforce an arbitral award, pending judgments or orders from other jurisdictions. Instead, such applications must be made without delay, within 14 days of the service of the enforcement order (or within the period fixed by the court if the order is served out of jurisdiction), pursuant to the Rules of the High Court (Cap. 4A). |
| Court granted injunctions against uncooperative defendant in arbitration proceedings despite an existing application to the tribunal
Company A and Company B (“Plaintiffs”) v Company C (“Defendant”) (HCCT 60/2024) [2024] HKCFI 3505 5 December 2024 Summary: The Plaintiffs sought an injunction preventing the Defendant from transferring its assets to its connected companies, and a worldwide Mareva injunction restraining the Defendant from disposing of assets up to US$55 million pending a final arbitration award or any interim measures granted in favour of the Plaintiffs, pursuant to section 45 of the Arbitration Ordinance (Cap. 609). Prior to the court application, the arbitral tribunal had issued multiple procedural orders directing the Defendant to negotiate an escrow agreement with the Plaintiffs to deposit US$55 million into an escrow account. Additionally, the Defendant had agreed not to remove any of its assets from Hong Kong up to the value of US$55 million. Despite these directions and undertakings, the Defendant was uncooperative for five months following the tribunal’s procedural orders, failing to finalise the terms of the escrow agreement. Given that the orders of the tribunal did not offer adequate protection for the Plaintiffs and that the interim measures sought by the Plaintiffs had not yet been finalised, the court intervened. The court granted the orders sought by the Plaintiffs to facilitate the tribunal in preserving the status quo. Takeaway: The Hong Kong court has once again demonstrated its willingness to exercise its concurrent jurisdiction to grant interim measures in support of arbitration proceedings, even though the Plaintiffs (claimants in the arbitration) also applied to the tribunal for the same types of interim measures. In particular, the court is prepared to assist the tribunal if the parties involved are uncooperative with the tribunal’s directions – and when an order from the court to enforce the tribunal’s interim measures is not sufficient to afford adequate protection for the Plaintiffs. |
| Legal update – The dawn of ad hoc arbitration in Mainland China: a real possibility?
14 October 2024 Summary: Traditionally, Mainland China has favoured institutional arbitration over ad hoc arbitration, the former being an arbitration administered by specialised arbitral institution, whereas ad hoc arbitration is known for its adaptability, cost-effectiveness and ability to be tailored to the specific needs of disputing parties. Although ad hoc arbitration is not yet officially recognised by national legislation, Mainland China is now actively taking steps to align its arbitration practice with international norms, particularly through the introduction of ad hoc arbitration. For example, draft laws have been released proposing to allow ad hoc arbitration for foreign-related commercial disputes. The Shanghai and Hainan Trade Zones are pioneers in introducing regional legal frameworks to provide policy and legislation support for ad hoc arbitration. Takeaway: The introduction of ad hoc arbitration in Shanghai and Hainan signifies a major advancement in Mainland China’s arbitration landscape. However, the absence of a unified legal framework throughout Mainland China poses uncertainties over the enforceability of ad hoc arbitral awards in other regions of Mainland China. Read the full legal update (Authors: Tom Fu, Raymond Yang, Evan Zhou). |
| Industry dynamics – Supreme People’s Court and the Ministry of Justice issue guidelines to strengthen role of arbitration in the Guangdong-Hong Kong-Macao Greater Bay Area
14 February 2025 Summary: On 10 February 2025, the Supreme People’s Court and Ministry of Justice jointly issued the “Guideline on Enhancing the Role of Arbitration in Serving the High-Quality Development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA)”. Key measures include the establishment of an international commercial arbitration centre in the GBA, enhanced information sharing among People’s Courts, judicial administrative bodies and arbitration institutions, and the creation of a joint training mechanism for foreign-related arbitration professionals in the GBA. Takeaway: The Guideline represents a major step forward in strengthening arbitration within the Guangdong-Hong Kong-Macao GBA. It aims to position the GBA as a leading international arbitration hub and to cultivate a world-class business environment by promoting efficient, modern and globally competitive dispute resolution mechanisms. A full version of the Guideline can be found here. |
| Legal update – Pro-enforcement approach: Mainland China highlights typical cases on enforcing Hong Kong arbitral awards
17 October 2024 Summary: The Supreme People’s Court of China recently released a series of illustrative cases that demonstrate a favourable trend and pro-enforcement approach in enforcing Hong Kong arbitral awards. The cases show that Mainland courts are willing to, inter alia:
Takeaway: The recent cases show the unwavering stance of Mainland courts in supporting Hong Kong arbitral awards. These court rulings contribute to the stability and trustworthiness of enforcing Hong Kong arbitral awards in Mainland China, which bolster the assurance of international stakeholders in selecting Hong Kong as their seat of arbitration. Read the full legal update (Authors: Billy Lam, Tom Fu, Raymond Yang, Johnson Ng, Evan Zhou). |
| Industry dynamics – Shanghai Financial Court issued operational guidelines to facilitate Hong Kong arbitration parties to apply for interim measures
7 January 2025 On 7 January 2025, the Shanghai Financial Court issued the “Guide to Parties for Hong Kong Arbitration Proceedings on Requesting Interim Measures at the Shanghai Financial Court under the Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region” (“Operational Guidelines”). The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region implemented in October 2019 enables the parties in Hong Kong arbitration proceedings administered by designated arbitration institutions to apply to the Shanghai Financial Court for interim measures (including preservation of mainland property of related parties) (“Application”). These Applications have become increasingly prevalent in recent years. The purpose of the Operational Guidelines is to clarify the Application procedures and address frequently encountered queries of applicants. They comprise 14 questions and responses that address topics such as the scope and types of property preservation, documents required for Application, duration of court reviewing the Application, and procedures for relief if the Application is rejected. The Operational Guidelines also clearly stipulate the need for the provision of security in making an application. While applicants are generally required to provide security, the Shanghai Financial Court would assess the need for the provision of security (and if so, the amount required) on a case-by-case basis. Examples of security that may be ordered include cash or property provided by the applicant or a third party, or a credit guarantee provided by a third party, such as a professional guaranty company. It is also emphasised in the Operational Guidelines that the Shanghai Financial Court would consider and decide on urgent Applications within 48 hours. To enhance efficiency, Applications may be submitted to the Shanghai Financial Court directly, but not necessarily through arbitral tribunals or Hong Kong arbitration institutions. Takeaway: This initiative is welcomed as it is expected to enhance the efficiency and effectiveness of property preservation and other interim measures in Shanghai which could be crucial in cross-border arbitration disputes. With the unique avenue for parties to Hong Kong arbitration to apply for court-ordered interim measures in Mainland China, the Operational Guidelines reinforce the position of Hong Kong as a leading international dispute resolution and arbitration centre. |
| Industry dynamics – CIETAC releases 2025 Guidance on Commercial Arbitration in Hong Kong: 50 Questions, Answers & Example
14 February 2025 Summary: On 14 February 2025, the CIETAC Hong Kong Arbitration Centre updated the “CIETAC’s Guidance on Commercial Arbitration in Hong Kong: 50 Questions, Answers & Examples”, which was first published in 2020. The updated Guidance covers key topics such as arbitration agreements, proceedings, awards and fees. Takeaway: The revised Guidance incorporates CIETAC Hong Kong Arbitration Centre’s latest case management practices, reflecting developments in Hong Kong’s arbitration laws and the 2024 CIETAC Arbitration Rules. It provides practical insights and up-to-date guidance for parties engaging in commercial arbitration administered by CIETAC in Hong Kong. A full version of the Guidance can be found here. |
| Industry dynamics – CIETAC issues Procedures for the Administering Cases under the UNCITRAL Arbitration Rules
17 February 2025 Summary: CIETAC has introduced the “Procedures for Administering Cases under the UNCITRAL Arbitration Rules” (“Procedures”), effective from 1 March 2025. The Procedures consist of seven chapters and 25 articles addressing general provisions, tribunal composition, arbitration procedures, awards, expedited arbitration, fee management and supplementary matters. The Procedures address the needs of parties opting for arbitration under the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) with CIETAC as the administering institution, serving as a supplement to the UNCITRAL Rules. Takeaway: The Procedures enhance CIETAC’s ability to serve parties who choose arbitration under the UNCITRAL Rules, reinforcing its commitment to internationalisation and innovation. This development ensures that both domestic and international parties benefit from fair, professional and diversified arbitration services. A full version of the Procedures can be found here |
| Industry dynamics – Mainland China court enforces first arbitral tribunal’s decision on interim measures
29 October 2024 Summary: The Beijing No. 4 Intermediate People’s Court granted and enforced a decision on interim measure by the Beijing Arbitration Commission. As far as we are aware, this is the first time that an arbitral tribunal’s decision on interim measures has been enforced by a court in Mainland China. Takeaway: To our knowledge, this marks the first occasion in Mainland China where an interim measure awarded by an arbitral tribunal has been enforced by a court. Not only does this demonstrate the proactive role of PRC courts in creating a pro-arbitration environment, but it also reflects the alignment of Mainland China’s arbitration practice with the international arbitration norm. Link to BIAC News |
| Singapore court grants anti-suit injunction in favour of an arbitration regarding a tort claim
COSCO Shipping Specialized Carriers Co., Ltd. (“Appellant”) v PT OKI Pulp & Paper Mills & 2 Ors (“Respondent”) [2024] SGCA 50 13 November 2024 Summary: The Singapore Court of Appeal considered that a tort claim arising from the contractual parties’ dealings is subject to the arbitration agreement under the contract. Therefore, an anti-suit injunction should be granted. The court emphasised that a broad and common sense approach should be adopted to interpret an arbitration clause. With this in mind, the court held that the parties must have contemplated that a tort claim for damage caused during the performance of the contracts of carriage would be subjected to the arbitration agreement. Furthermore, the Respondent’s tort claim and the Appellant’s contractual defence should not be treated as discrete matters, as they shared a common connection. Takeaway: What is the ambit and scope of the phrase “arising out of or in connection with this contract”? This is a phrase commonly found in dispute resolution agreements. On the face of the express language, the parties must have intended that the agreement should cover disputes beyond the terms of the contract. However, the question that has vexed common law courts is exactly how the limits of that extended scope ought to be delineated. By adopting a “two-stage test” in determining the anti-suit injunction application, the Singapore Court of Appeal echoes previous decisions of English and Australian courts, emphasising that a broad and common sense approach shall be adopted when interpreting arbitration clauses, because it is important to uphold the parties’ contractual agreement to refer disputes to arbitration. |
| Singapore court dismisses application to set aside an arbitral award for failure to establish a breach of natural justice
Siddiqsons Tin Plate Ltd (“Applicant”) v New Metallurgy Hi-Tech Group Co Ltd (“Respondent”) [2024] SGHC 272 25 October 2024 Summary: The Applicant sought to set aside a SIAC arbitral award on the grounds that there was a breach of natural justice in the arbitral tribunal’s conduct of proceedings. This included: (i) allowing the Respondent to make further submissions and not inviting the Applicant to respond; (ii) rushing the finalisation of the Memorandum of Issues; (iii) failing to consider certain issues; (iv) applying English case law to determine an issue in dispute without inviting the Applicant to make further submissions; and (v) interrupting the conduct of cross-examination. The court held that the Applicant did not object to the tribunal’s conduct during the arbitration (despite having ample time and opportunities to do so) and only raised complaints after receiving an adverse award. The application was therefore dismissed. By doing so, the court stressed the high threshold for establishing a breach of natural justice, requiring the Applicant to show actual prejudice (which it failed to do). Takeaway: The court’s decision underscores the importance of timely objections during an arbitration and the high threshold for setting aside arbitral awards on grounds of natural justice. “Hedging” by waiting to raise concerns about the arbitral process with the supervisory court only after receiving the award, instead of doing so promptly with the tribunal, is risky. Further, the court would only intervene if such breach of natural justice altered the arbitral tribunal’s decision in some meaningful way. |
| Russian court issues billion-euro judgment while refusing to enforce an HKIAC arbitration clause
5 November 2024 Summary: A Russian court has upheld claims by a Russian SOE affiliate against a German company and refused to enforce an HKIAC arbitration clause in the contract in dispute – despite the German company having obtained an award on exclusive jurisdiction in the HKIAC proceedings and a permanent anti-suit injunction from the Hong Kong Court of First Instance to restrain the Russian SOE affiliate from pursuing litigation in Russia and an anti-enforcement injunction. Notably, amendments to the Russian Arbitration Procedural Code introduced in 2020 allow Russian courts to assert exclusive jurisdiction over disputes involving Russian-sanctioned parties. Takeaway: There remains uncertainties and risks in relation to the operativity and enforceability of arbitration clauses involving Russian entities which are subject to sanctions. Parties should seek legal advice as to the recourse and options in resolving disputes prior to entering into transactions which may involve such risks. |
| Singapore court rejects application to set aside award due to claimants’ failure to demonstrate that the tribunal’s consideration of defences could have reasonably changed the outcome
DLV and another v DLX and others [2025] SGHC 29 21 February 2025 Summary: The case involved an application to set aside a 2024 arbitral award under Singapore’s International Arbitration Act, where the claimants (Promoters) challenged an award favouring the defendants (Investors) over the exit mechanism in a Share Acquisition & Shareholders’ Agreement. The tribunal found that the claimants were liable for damages. The claimants relied on the grounds of breach of natural justice, namely, alleged failure to consider their Waiver Defence (investors waiving their rights by pursuing a Split Sale) and a buy-back defence (which contains an “interpretation” limb and “unenforceability” limb). The court rejected the application on the basis that the tribunal had considered and implicitly rejected the Waiver Defence by finding that valid notice pursuant to the exit mechanism was given. The court also held that the tribunal had rejected the interpretative limb of the buy-back defence as there was an obligation placed on the company to find a buyer at the exit price of the defendant’s shares, and that it was unnecessary to address the unenforceability aspect of the buy-back defence limb. Takeaway: The court found there had been no breach of the fair hearing rule and concluded that the claimants had failed to show the tribunal’s consideration of the defences could reasonably have made a difference to the outcome and reliefs granted in the award. The ruling underscores the high threshold for setting aside arbitral awards and the courts’ deference to implicit resolutions of key issues by tribunals. As illustrated in the Siddiqsons Tin Plate Ltd case above, this case demonstrated again that the court would only intervene if such alleged breach of natural justice, if established, could have altered the arbitral tribunal’s decision in some meaningful way. |
| SIAC announces official release of the seventh edition of its Arbitration Rules
9 December 2024 The Singapore International Arbitration Centre announced on 9 December 2024 that the seventh edition of its Arbitration Rules will come into force on 1 January 2025. This edition introduces several new procedures and enhancements aimed at achieving fairness, efficiency and enforceability, including:
A full version of the Rules can be found here. |
| SIAC held public consultation on draft Insolvency Arbitration Protocol
13 December 2024 The Singapore International Arbitration Centre (SIAC) announced a public consultation on its draft SIAC Insolvency Arbitration Protocol (“Protocol”), which ended on 17 January 2025. This pioneering initiative by an international arbitration institution aims to adapt SIAC Rules for efficiency in insolvency contexts and facilitate arbitration in insolvency-related disputes by setting out a clear procedure. Key features of the draft Protocol:
A full version of the draft Protocol and a Note on the draft Protocol can be found here. |
| The 2024 Hong Kong Policy Address
16 October 2024 The Hong Kong Government will explore the establishment of a sports dispute resolution system and promote sports arbitration, leveraging the city’s institutional advantages in dispute resolution. The Government will also facilitate the growth of high-value maritime services, including maritime law and maritime arbitration, reinforcing Hong Kong’s position as an international shipping hub. To further the development of legal and dispute resolution services, the Government aims to extend the current measures of “allowing Hong Kong-invested enterprises to choose Hong Kong as the seat of arbitration” and “allowing Hong Kong-invested enterprises to adopt Hong Kong Law” to more cities in the Greater Bay Area – which has been formally extended to nine cities (with Shenzhen and Zhuhai being the most recent addition) as of 14 February 2025 by a policy paper jointly issued by the Supreme People’s Court and Ministry of Justice, together with a reply separately issued by the Supreme People’s Court. For more details, click here. |
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