L v. R

HCCT 87/2023

[2025] HKCFI 3162

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTRUCTION AND ARBITRATION PROCEEDINGS

NO 87 OF 2023

________________________

________________________

________________________

________________________

D E C I S I O N

________________________

1.  These proceedings were instituted by the Plaintiff under sections 66 and 81 of the Arbitration Ordinance (“Ordinance”)  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, on the ground of public policy and the lack of authority of the director of the Plaintiff who had signed the Settlement Agreement.

2.  The Originating Summons was issued on 13 November 2023, and amended on 14 February 2024 with leave of the Court.

3.  On 6 May 2025, 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 (“Expunge Summons”). This was set down for a 15-minute hearing on 18 July 2025. The Expunge Summons was opposed and the parties applied to have that hearing adjourned for argument/paper disposal.

5.  On 3 July 2025, the Defendant issued a further summons to seek security for costs pursuant to Order 23 rule 1 RHC and section 905 of the Companies Ordinance (“Security Summons”). The Defendant sought to have the Security Summons put before the Court on 18 July 2025.

6.  At the hearing, after observations made by this Court, no orders were made on either the Expunge Summons or the Security Summons, the latter of which was withdrawn. The contents of the Plaintiff’s affirmations which were challenged will be considered at the substantive hearing of the Originating Summons, and the Defendant’s affirmations in reply will be admitted for the hearing, all without prejudice to the Defendant’s objections.

7.  This Decision is handed down to remind the parties and practitioners of various important aspects of applications made and hearings conducted on the Arbitration List.

8.  Parties should be aware by now that it is not the practice of the Arbitration Court to permit any party unilaterally to set a summons down for hearing on the day set for the hearing of an earlier summons on a different subject matter. Any attempt to do so will only derail the hearing and the preparations made for a summons issued and set down for disposal at the time indicated by the parties.

9.  Proceedings on the Arbitration List are conducted to further the object and principles of the Ordinance reflected in section 3, to facilitate “the speedy resolution of disputes”. Interlocutory skirmishes should be avoided, as parties and the Court should focus on dealing with the substantive subject matter of the proceedings expeditiously, the usual subject matter being the setting aside of arbitral awards or orders granted to enforce arbitral awards, or challenges to the jurisdiction of the tribunal. The status of arbitral awards, orders made by the tribunal and the progress of ongoing arbitration proceedings should not be kept in abeyance or in a state of limbo or uncertainty concerning their validity. Interlocutory skirmishes only distract and derail proceedings before the Court, the preparations for the substantive hearing and its determination.

10.  In this case, the Security Summons was only issued in July 2025, when the substantive hearing of the Amended Originating Summons is fixed for September 2025. As it is opposed, there are practical difficulties for the application to be heard, and determined, in the time available. In this case, no dates are in fact available from the Court between July and September 2025.

11.  As this Court indicated in the course of the hearing, applications for security can be dismissed on the ground of delay alone, in the absence of some exceptional circumstance which can explain the party’s inaction. Any ground for seeking security should have become apparent upon commencement of the proceedings, when the Originating Summons was issued and served. The Court cannot perceive any purpose being served in making an order for security for the Defendant’s costs two months before the substantive hearing of the Amended Originating Summons, when the Defendant had been content with the status since the commencement of the proceedings which in this case was as early as November 2023.

12.  In making an application for security under Order 23 RHC, the applicant will have to establish that having regard to all the circumstances of the case, it is just for the Court to make the order. For proceedings on the Arbitration List, bearing in mind the objective of the Ordinance, delay in making the application for security is an important factor which may lead to the refusal of the order. Unwarranted applications will be penalized by costs orders, including orders against the legal representatives in appropriate cases.