Can Ships Be Arrested in Hong Kong to Enforce an Arbitral Award?
International Business Articles
ONC Lawyers
Hong Kong
The ultimate purpose of initiating arbitration proceedings has always been to obtain a favourable award and to enforce it. However, a favourable award in respect of a monetary claim is of little or no value if eventually the respondent is unable to pay. Therefore, the claimants would often wish to obtain security for their claims against the respondents by arresting the respondents’ vessel. In Hong Kong, under section 12A of the
High Court Ordinance (Cap.4) (the “Ordinance”), upon the claimants’ application the Hong Kong Court has power to arrest the respondents’ ship as security in aid of the claimants’ maritime claims (i.e. claims in relation to a ship) against the respondents. However, section 12A of the Ordinance does not provide that the Hong Kong Court has such power in relation to enforcing an arbitral award.
In the recent Hong Kong case Handytankers KS v The Owners and/or demise Charterers of M/V “ALAS” 1 , the Hong Kong Court clarified its power in section 12A of the Ordinance and invoked its jurisdiction to arrest the Defendants’ vessel despite an arbitral award has already been obtained by the Plaintiff.
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December 2014