International Construction Law Review
HONG KONG (SAR) CORRESPONDENT’S REPORT1
PAUL STARR
Partner, Hong Kong Head of Infrastructure/DR and Joint Worldwide Head of Arbitration, King & Wood Mallesons2
INTRODUCTION
Hong Kong (SAR)’s construction industry has withstood the misery and hardship inflicted by the pandemic. That is in itself testimony to the resilience and enterprise of all working here, as well as to Hong Kong’s continuing unique role as the common law bridge into China.
This report explains key features of recent legislative developments affecting our industry, including the new security of payment regime, regulated use of drones and outcome related fee structures in arbitration. We provide updates on the mutual arrangements between Hong Kong and China Mainland on interim measures and enforcement of arbitral awards. We then examine construction cases of interest and statistics of key arbitral institutions in Hong Kong over the past few years, before gazing into the crystal ball for future construction opportunities within our Greater Bay Area.
NEW SECURITY OF PAYMENT REGIME IN HONG KONG
The potential introduction of Security of Payment Legislation (“SOPL”) has long been controversial here, notwithstanding adoption in other Asian jurisdictions. Absent its promulgation, on 5 October 2021 the Hong Kong Government released Technical Circular (Works) No 6/2021 (“Circular”) after over 10 years of consultation and preparation. The Circular is essentially a trial run – it embodies the spirit of the SOPL and garners practical experience to assist in the refinement of the SOP bill and subsequent introduction of the SOPL.
The Circular relevantly includes Annex A, the SOP Framework, which provides an overview of the mechanisms to facilitate timely processing of
1 References to “Hong Kong” are to the Hong Kong Special Administrative Region (SAR) of the People’s Republic of China (PRC).
2 The author thanks Felicity Ng, Regina Lee, Hammy Jiang, Angie Lam and Daphne Yung for their invaluable contributions to this report.
Pt 4] Hong Kong (SAR) Correspondent’s Report
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