Meaning
A specific legal framework enables parties in Hong Kong arbitrations to apply for asset or conduct preservation orders from courts in Mainland China. The adoption of prc-hk mutual arrangement interim measures marked a change in the ability of international investors to secure their claims against mainland entities. This arrangement is exclusive to certain qualified arbitral institutions in the region.
Regional Cooperation
Judicial assistance between the two legal systems is governed by a formal agreement signed in 2019. Because prc-hk mutual arrangement interim measures bypass the usual restrictions on foreign arbitration support, they offer a tool for creditors. The applicant must file the request through the arbitral institution which then forwards it to the relevant mainland court.
Application Route
Choice of institution is a factor for parties wanting to access this protection.
Asset Freezing
Property and bank accounts located in the mainland can be locked down before the final award is issued. Since prc-hk mutual arrangement interim measures are processed according to mainland procedural law, they require specific formats for evidence and power of attorney. This bridge between common law and civil law systems increases the attractiveness of Hong Kong as an arbitral seat.
The speed of the mainland courts in responding to these requests has made it harder for respondents to hide assets during a dispute.
