Hong Kong Court issues landmark anti-arbitration injunction to protect enforcement of award

Hong Kong’s reputation as a global leader in cross-border arbitration is built on a robust legal framework that balances arbitral autonomy with judicial oversight. The Arbitration Ordinance (Cap. 609), rooted in the UNCITRAL Model Law, enshrines minimal court intervention, ensuring arbitration remains a trusted mechanism for resolving international disputes. Yet, in exceptional circumstances, Hong Kong courts demonstrate their authority to protect judicial processes, as seen in the protracted Xiamen Xinjingdi Group Ltd v. Eton Properties Ltd and others [2023] HKCFI 1327 (HCCT 98/2022) saga. In a groundbreaking 2023 decision, Anthony Siu & Co. skillfully secured a limited anti-arbitration injunction for the plaintiff, restraining the defendants from pursuing claims in a Mainland China arbitration that threatened Hong Kong judgments. This legal milestone, coupled with a recent Court of Appeal ruling on 18 June 2025 [2025] HKCA 566 (CACV 235/2024) upholding a payment of RMB 180 million out to the plaintiff pending appeal, underscores Hong Kong’s judicial precision in navigating complex cross-border disputes.
 
A complex legal odyssey
 
This case, described by the Honourable Madam Justice Mimmie Chan (“Justice Chan”) as having a “long and tortuous history,” spans nearly two decades of litigation across multiple jurisdictions. In 2003, Xiamen Xinjingdi Group Ltd (the plaintiff) contracted with Eton Properties Ltd and Eton Properties (Holdings) Ltd (the 1st and 2nd defendants) to acquire shares in a company holding land use rights in Xiamen, governed by PRC law with a CIETAC arbitration clause. The defendants’ repudiation led to a 2006 CIETAC award ordering the parties to “continue to perform the agreement” and RMB 1,275,000 to be paid to the plaintiff. The plaintiff enforced this in Hong Kong in 2007, but the defendants’ prior restructuring –divesting shares to a third entity – complicated matters.
 
By 2008, the plaintiff pursued common law enforcement proceedings in Hong Kong (HCCL 13/2011). These proceedings, which were highly contested, resulted in the judgment of the Court of Final Appeal dated 9 October 2020 ([2020] HKCFA 32), affirming the decision of the Court of Appeal to allow the plaintiff to recover damages from the 1st and 2nd defendants for breach of an implied promise to honour the award. Following an eight-day quantum trial in September 2023, the plaintiff was awarded RMB 169,044,298.25 in damages on 14 May 2024 ([2024] HKCFI 1291), plus RMB 174,272,854.28 in pre-judgment interest, further interest and post-judgment interest.
 
The defendants appealed, challenging inter alia the damages’ counterfactual basis, valuation date, cost deductions, interest period etc.
 
The anti-arbitration injunction: A legal triumph
 
In June 2022, the defendants initiated a new CIETAC arbitration, seeking termination of contract under Article 580 of the PRC Civil Code (which came into effect on 1 January 2021). Recognising the threat to the Hong Kong enforcement proceedings, Anthony Siu & Co. (representing the plaintiff) proactively and swiftly applied for an anti-arbitration injunction.
 
On 18 May 2023, Justice Chan granted a tailored anti-arbitration injunction under Section 21L of the High Court Ordinance, restraining the defendants from pursuing any enforcement-related claims. These claims were deemed vexatious and abusive, undermining the plaintiff’s enforcement rights. The court distinguished breaches of the implied promise and the common law enforcement action (governed by Hong Kong law as the lex fori) from contract performance (governed by the PRC law), safeguarding the Hong Kong judgments.
 
It should be noted that the court showed restraint in interfering with the arbitral process and emphasised the need for caution before granting an anti-arbitration injunction. It carefully considered whether the defendant’s rights would be unjustly prejudiced and recognised that the defendant had the right to invoke the arbitration clause and pursue part of their PRC Law claims. This approach underscores the court’s respect for the autonomy of the arbitral process.
 
This ruling, a testament to Anthony Siu & Co.’s strategic acumen, set a precedent for curbing parallel proceedings that erode judicial authority, reinforcing Hong Kong’s arbitration-friendly yet resolute legal landscape.
 
The Court of Appeal’s balanced approach
 
On 21 March 2025 ([2025] HKCFI 1180), Justice Chan ordered RMB 180 million to be paid out to the plaintiff. The defendants’ bid for leave to appeal the payment-out order was denied ([2025] HKCFI 2005). Renewing their stay application before the Court of Appeal (CACV 235/2024), the defendants argued for a full stay of execution pending appeal or a reduced payment out order. Anthony Siu & Co. (representing the plaintiff) robustly opposed.
 
On 18 June 2025, the Court of Appeal applied principles from Star Play Development Ltd v Bess Fashion Management Co Ltd [2007] 5 HKC 84 that the burden falls on the appellants to justify the stay relief via strong appeal prospects or other valid reasons. Adopting a “broad brush” approach, the stay was only granted conditionally with RMB 180 million to be paid out to the plaintiff.
 
Legal lessons and implications
 
This case provides valuable insights into Hong Kong’s arbitration and enforcement framework. It underscores the importance of judicial restraint and authority, particularly through the anti-arbitration injunction, which demonstrates the court’s capacity to safeguard judgments while respecting the autonomy of arbitration processes. Furthermore, the case sheds light on the principles governing stays of execution. The Court of Appeal adopts a pragmatic approach to justice, wherein courts broadly assess the merits of appeals whilst carefully balancing potential prejudice. This reflects Hong Kong judiciary’s commitment to equitable principles. Anthony Siu & Co.’s success in navigating these challenges underscores their expertise in managing multi-jurisdictional issues. For businesses, this case signals a strong protective framework for arbitral awards, complemented by safeguards that preserve appellate rights, fostering confidence in Hong Kong’s arbitration regime.
 
Conclusion: A testament to legal excellence
 
The Xiamen Xinjingdi case, now in its third decade, exemplifies the intricacies of cross-border enforcement and Hong Kong’s judicial prowess. Anthony Siu & Co.’s strategic victories – securing the 2020 victory, the 2023 anti-arbitration injunction and the 2025 payment out order – demonstrate their mastery of arbitration law and unwavering commitment to clients. These milestones affirm Hong Kong’s judiciary as a beacon of fairness, deftly balancing arbitral freedom with judicial oversight.
 
Anthony Siu & Co. is a dynamic Hong Kong based law firm with a distinguished legal network behind it. The firm provides China-appointed attesting service and notary public service. It further specialises in corporate, commercial and capital market; corporate rescue and insolvency; litigation and arbitration; property and conveyancing; intellectual property; and trust planning and arrangement.
 
The firm strives on providing high-quality, solution-orientated legal services with a personal and attentive approach, catering to modern individuals and corporations. Their lawyers understand clients’ business culture, and have diverse linguistic skills and vast experience providing our services to local as well as PRC markets. They are all well-equipped to deal with commercial matters which are uniquely found in Asian transactions.
 
For expert guidance on arbitration or cross-border disputes, contact Anthony Siu & Co. at www.anthonysiu.com.