Indemnity Costs In Arbitration Extended

It is now the established practice of the Hong Kong Courts to order indemnity costs to be paid by an unsuccessful party who (i) appeals against an arbitration award; (ii) applies to set aside or; (iii) resists enforcement of such an award, unless special circumstances can be shown.

In A v. R (Arbitration: Enforcement) (2009) 3 HKLRD 389, Reyes J. explained that a party who obtains an arbitration award in his favour should be entitled to expect that the Court will enforce the award as a matter of course. An unsuccessful challenge to an award should result in an order for indemnity costs. The successful party should not have to subsidise about one-third of the costs of the unsuccessful application which would result from a party and party costs order being made. Furthermore, the making of...