Hong Kong—security for costs—the courts—enforcement
Produced in partnership with Peter Chow & Felicia Cheng of Squire Patton Boggs (Hong Kong)
Hong Kong—security for costs—the courts—enforcement

The following Arbitration guidance note Produced in partnership with Peter Chow & Felicia Cheng of Squire Patton Boggs (Hong Kong) provides comprehensive and up to date legal information covering:

  • Hong Kong—security for costs—the courts—enforcement
  • Security for costs during a challenge to a New York Convention award

This Practice Note examines the power a Hong Kong court has to order security for costs during a challenge to a New York Convention arbitral award.

Security for costs during a challenge to a New York Convention award

In favour of a passive defendant or an award debtor resisting enforcement/against award creditor

In Diag Human SE v Czech Republic, the English High Court drew a distinction between 'active' and 'passive' defendants. The court held that security for costs cannot be awarded in favour of an 'active' defendant, ie one that applies to challenge an award on a serious irregularity or to appeal an award on a point of law (security for costs may only be awarded against such a defendant). The defendant here was 'passive' in the sense that it was asking the court not to exercise its discretion to enforce the award. The court saw no reason why a 'purely passive defendant' should not be able to seek, like any other defendant in court litigation, security for costs. Accordingly, if such a remedy is available when resisting a domestic award, then it may also be available to a defendant resisting enforcement of a New York Convention award by reference to article III of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). On