Hong Kong Dispute Digest January 2025
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Welcome to our Hong Kong Dispute Digest where we share our latest publication on the recent developments in Dispute Resolution, with a particular emphasis on case updates, enforcement actions, and industry trends in Hong Kong.
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Revisit the Hong Kong position: When dispute resolution clauses meet insolvency proceedings
Authors: David Hung, May Leung
Before the landmark decision of the Hong Kong Court of Final Appeal in Guy Kwok-Hung Lam v Tor Asia Credit Master Fund LP [2023] HKCFA 9, there had been a long-standing debate over the impact, if any, of an exclusive jurisdiction clause in favour of a foreign court (“EJC”) on the presentation of bankruptcy / winding-up petitions.
In short, it is now well-settled that in an ordinary case where the petition debt is disputed and the dispute is subject to an EJC, the petition is liable for dismissal unless there are countervailing factors, such as the risk of the debtor’s insolvency impacting third parties and the debtor’s reliance on disputes that border on the frivolous or abuse of process.
The approach in Re Guy Lam has been extended to insolvency proceedings where the petition debt is disputed and the dispute is subject to an arbitration clause.
Default judgment set aside in favour of arbitration in Hong Kong
Author: May Leung
In Tongcheng Travel Holdings Limited v OOO Securities (HK) Group Limited [2024] HKCFI 2710, the Plaintiff obtained a default judgment against the Defendant for failing to return managed assets under an Investment Management Agreement, and subsequently a garnishee order nisi was made by way of enforcement of the default judgment. The Investment Management Agreement contains an arbitration clause.
The Defendant applied to (1) set aside the regular default judgment and the garnishee order nisi and (2) stay the proceedings in favour of arbitration under section 20 of the Arbitration Ordinance (Cap. 609) on the following grounds: (a) There is a valid arbitration agreement such that the proceedings should never have been commenced in court; (b) In the alternative, the default judgment should be set aside as there is a defence which has a real prospect of success.
This article examines the approach adopted by the Hong Kong courts.
The New Cybersecurity Dawn – Hong Kong readies for new critical infrastructure legislation
Authors: Danny Leung, Wilfred Ng, James Gong, Hwee Yong Neo, Olivia Cheng, Ying Zhong
The highly anticipated Protection of Critical Infrastructures (Computer Systems) Bill (Bill) is finally gazetted. The publication of the Bill is a culmination of a series of public consultation earlier this year. The Bill provides much needed clarity and certainty as to how critical infrastructures and computer systems in Hong Kong should be regulated. Following our previous insight Are you ready for Hong Kong’s Cybersecurity law?, the purpose of this update focuses on the key aspects of the Bill, as well as a useful comparison of the Bill with the current cybersecurity regulatory landscape in Mainland China.