(A)
Introduction
In
L v R, HCCT 87/2023, date of judgment: 18 July 2025, the Honourable
Madam Justice Mimmie Chan issued a reminder to parties and practitioners regarding
the essential conduct governing applications and hearings on the Arbitration
List. This decision underscores the imperative of efficiency in
arbitration-related court proceedings, reinforcing Hong Kong’s commitment to
the core arbitral principles of speedy dispute resolution.[1]
(B)
Facts
The
Plaintiff commenced proceedings under sections 66 and 81 of the Arbitration
Ordinance (the “Ordinance”) seeking to set aside (1) a Settlement Agreement made in
relation to arbitral proceedings in Hong Kong and (2) a procedural order made
by the tribunal.[2]
The
Originating Summons was issued on 13 November 2023, and amended on 14 February
2024 with leave of the Court.[3] The
Amended Originating Summons was set down for hearing on 29 September and 30
September 2025.[4]
On
20 June 2025, the Defendant issued a summons seeking to expunge various parts
of the affirmations filed by the Plaintiff (the “Expunge Summons”). This
was set down for a hearing on 18 July 2025.[5]
On
3 July 2025 (i.e. around 2 weeks before the above hearing), the Defendant
issued another summons to seek security for costs pursuant to Order 23 rule 1
RHC and section 905 of the Companies Ordinance (the “Security Summons”).
The Defendant applied for the Security Summons to be heard concurrently on 18
July 2025.[6]
(C)
Decisions
Court's
Disposition of the Summonses
At
the hearing, the Defendant withdrew the Security Summons. The Court made no
orders on either the Expunge Summons or the Security Summons.[7]
Court’s
criticisms
The Court directed the parties' and practitioners' attention to the following:
1.
Condemnation
of Procedural Tactics: The Court criticized the practice of unilaterally
setting a new summons for hearing on a day reserved for an earlier summons on a
different subject matter.[8]
Such tactics “derail the hearing and the preparations made for a summons
issued and set down for disposal at the time indicated by the parties”.[9]
2. Reaffirmation of Speed
as Overriding Objective: The Court reaffirmed the overriding objective under
Section 3 of the Ordinance, namely, to facilitate “the speedy resolution of
disputes”.[10] Interlocutory skirmishes should be avoided, as they (1) distract parties
and the Court from focusing on substantive issues requiring expeditious resolution,
for example, setting aside arbitral awards, enforcing awards, or challenges to
the jurisdiction of the tribunal; and (2) derail proceedings before the Court,
the preparations for the substantive hearing and its determination.[11]
3. Unjustifiable Delay in
Seeking Security: The Court criticized the unjustifiable delay in issuing the
Security Summons. Despite the proceedings commencing in November 2023, the
Court found that the grounds for seeking security “should have become apparent
upon commencement” of the proceedings.[12] The
Court also viewed that there was no purpose for ordering security for the
Defendant’s costs 2 months before the substantive hearing of the Amended
Originating Summons, especially when the Defendant contented with the
status since November 2023. Applications for security can be dismissed on the
ground of delay alone, in the absence of exceptional circumstance which can
explain the party’s inaction.[13]
4. Adverse Costs Order: The
Court reiterated that unwarranted applications would be penalized by costs
orders, including orders against the legal representatives in appropriate
cases.[14]
(D)
Key
Takeaways
In
conclusion, this decision sends a clear message that the Hong Kong Courts actively
manage the Arbitration List to prevent procedural maneuvering from undermining
arbitration's fundamental objective of speedy resolution under Section 3 of the
Ordinance.
Parties and their
advisors must not hijack hearings scheduled for one purpose to argue unrelated late-filed applications. Further, applications for security for costs must be made promptly at the commencement of
proceedings. Significant delay without justifications is likely to
lead to refusal.
The Court directed the parties' and practitioners' attention to the following:
[1] https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2023/HCCT000087A_2023.doc
[2] L v R, HCCT 87/2023, date of judgment: 18 July 2025, §1
[3] Ibid, §2
[4] Ibid, §3
[5] Ibid, §4
[6] Ibid, §5
[7] Ibid, §6
[8] Ibid, §8
[9] Ibid
[10] Ibid, §9
[11] Ibid
[12] Ibid, §11
[13] Ibid
[14] Ibid, §12
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