Hong Kong's Financial Dispute Resolution Scheme will be expanded with effect from January 1 2018 and July 1 2018 by amending the jurisdiction and terms of reference of the Financial Dispute Resolution Centre. Alongside the recent changes to allow third-party funding in arbitration, the changes to the scheme show that alternative dispute resolution is coming of age for financial disputes in Hong Kong where there is an imbalance of power between parties.
A third guidance note on the use of remote hearings for civil proceedings took effect on 2 January 2021. The guidance note (representing Phase 3) provides for wider use of videoconferencing facilities and telephone hearings with respect to all levels of civil courts in Hong Kong. In particular, Phase 3 is more comprehensive and provides more options for connecting with the courts' videoconferencing facilities.
The High Court recently decided that it can, as part of its case management powers and of its own volition, order that a directions hearing take place by means of a telephone conference without the physical presence in court of the parties or their legal representatives. The court's decision is set against the background of the extraordinary measures adopted in Hong Kong to combat the coronavirus public health emergency.
The High Court has rejected an application for summary judgment of a claim to release money frozen by a bank. This was in the context of an investigation into the alleged use of the account for criminal activity. In its defence, the bank argued that the customer agreement contained an implied term that the bank could act on evidence of suspected fraudulent conduct to suspend operation of the account.
In re Zadeh v Registrar of Companies, the Court of First Instance held that an application by an overseas company to intervene as a party in existing proceedings in Hong Kong did not expose it to a liability to provide security for costs and that, even if the court did have jurisdiction to order security for costs, it would not have ordered the intervener to do so. Although security for costs against overseas or dubiously solvent plaintiffs is a useful tool in civil litigation, this case demonstrates some of the procedural limits.
In Zhang Hong Li & Ors v DBS Bank (Hong Kong) Ltd & Ors, the Court of Final Appeal interpreted a so-called 'anti-Bartlett clause' in a trust deed and held that it excluded the imposition of a "high-level supervisory duty" on the trustee to supervise or review the investment decisions of an investment adviser appointed by the underlying private investment company.
The Norwich Pharmacal order is an important tool for combating fraud. Given the prevalence of electronic and identity fraud, the ability of victims to recover lost money through the civil courts has assumed a high profile of late. For plaintiffs who fall prey to such fraudsters, the ability to obtain a court order prohibiting a defendant from disposing of (among other things) money in a bank account (ie, a Mareva injunction) and to obtain timely disclosure of details of alleged wrongdoing from a defendant's bank (eg, Norwich Pharmacal relief) is often crucial.