Hong Kong – Construction Law

Third party funding of arbitration in Hong Kong is given the green light

Aug 01 2017

By Christopher Tung, Sacha Cheong and Dominic Lau, K&L Gates, Hong Kong

On 14 June 2017, the Legislative Council of Hong Kong passed the Arbitration and Mediation Legislation (Third Party Funding) (Amendment) Bill 2016.

The Bill comes on the heels of the consultation paper issued in October 2015 by the Law Reform Commission’s Third Party Funding for Arbitration Sub-committee and closely follows the recommendations made by the Law Reform Commission in its Report dated 12 October 2016 to clarify the law concerning third party funding of arbitration and associated proceedings under the Arbitration Ordinance. (For more information about the report and the LRC’s recommendations, see our article in the May 2017 issue of Arbitration World.

Third Party Funding for Arbitration in Hong Kong

Feb 20 2017

By: Sacha Cheong and Dominic Lau, K&L Gates, Hong Kong

Given the highly technical and complex nature of the activities in the construction industry, to provide familiarity and certainty, and to save time and (legal and administrative) costs, standard form contracts are widely in use. Arbitration agreements are contained in most standard form contracts for similar reasons.

Proposed Security of Payment Legislation in Hong Kong

Sep 13 2016

By Sacha M. Cheong and Dominic C. Lau, K&L Gates, Hong Kong

A prominent feature of the construction industry is its pyramid structure with long chains of contracts and sub-contracts from developers down to small sub-contractors and suppliers.

The inclusion of conditional payment terms (favorable to the paying party), frequent disputes at all stages of the projects, and cumbersome dispute resolution processes can often result in substantial delay in payments to the smaller sub-contractors and suppliers. On the one hand, these sub-contractors and suppliers are usually dependent on the parties higher up in the contracting hierarchy for new work, and they often lack the financial means and resources to engage in protracted disputes. On the other hand, delayed or nonpayment could adversely affect their cash flow, resulting in difficulties in ordering and securing goods and services, paying employee wages, and sometimes even the suspension of work.

To address these problems, the United Kingdom pioneered the statutory adjudication scheme for security of payment in 1996, which has since been followed (with slight variations) by several other countries, including Australia, New Zealand, Singapore, and Malaysia.

Tag:Hong Kong