Hong Kong Court Finds Enforcement Of Award Time Barred

Jurisdiction Asia

Practitioners regularly encounter time bar and limitations issues when seeking to enforce or resist enforcement of arbitral awards.  Of particular relevance to Hong Kong practitioners, situations can arise where a successful party to an arbitration has to choose the jurisdiction to bring enforcement proceedings (Hong Kong or the Mainland), where the losing party has assets in both jurisdictions.  The situation arises because Article 2 of the Arrangement Concerning Mutual Enforcement of Arbitral Awards requires the party to choose.

In the February 2019 decision from the Hong Kong High Court in CL v SCG [2019] HKCFI 398, the Court was faced with the following two issues:

  1. What is the precise date when a cause of action to enforce the award accrues?
  2. Whether the 6-year limitation period continued to run while one of the parties sought to enforce the award in China.

In relation to the first question, the Court considered that a cause of action based on an implied obligation to honour the award arose when the party failed to make payment “within a reasonable time of the publication of the award and demand being made”.  In the case before the Court, the award required the party make payment “forthwith”; the court considered that payment within 21 days was a reasonable time for payment.

In relation to the second question, the Court considered that there was no provision in the Arrangement Concerning Mutual Enforcement of Arbitral Awards or the Limitation Ordinance that the limitation period should not run while a successful party seeks to enforce an award in China.

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About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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