Foreign states will no longer be immune from suit or execution in Hong Kong in respect of commercial activities, with effect from 1 January 2024.

Hong Kong follows the same approach to foreign state immunity as the PRC, as confirmed in the well-known Congo case in 2011.  The PRC has previously adopted the “absolute” doctrine of foreign state immunity (which does not include any exception for commercial activities).  On 1 September 2023, however, the PRC adopted a new Foreign State Immunity Law which will apply the “restrictive” doctrine of immunity, in line with many other jurisdictions (reported in detail here).  The PRC government has confirmed that Hong Kong and Macau should follow the rules and policies set out in the new law.

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In a recent post on our Public International Law Notes blog, Antony Crockett and Caitlin Setter consider the recent release of ICSID’s biannual caseload statistics for FY2023 and a separate publication reviewing the first year of practice under the newly implemented ICSID 2022 Rules. You can read the full post here.


For further information, please contact Antony Crockett, Partner, Caitlin Setter, Registered Foreign Lawyer (Victoria, Australia), or your usual Herbert Smith Freehills contact.

Antony Crockett
Antony Crockett
+852 21014111
Caitlin Setter
Caitlin Setter
Registered Foreign Lawyer (Victoria, Australia)
+852 210141686

Hong Kong Court Clarifies Threshold for Setting Aside Awards

A Hong Kong Court recently adopted a resoundingly pro-arbitration stance in a decision which emphasised the high thresholds of irregularity that would need to be established before an arbitration award can be set aside.

In LY v HW, [2022] HKCFI 2267, the Court dismissed an application to set aside an award based on claims that the Tribunal had failed to deal with the key issues and failed to provide sufficient reasons for its decision in the award. This decision underlines the narrow manner in which grounds for refusal of enforcement are to be construed and fortifies the enforceability of arbitration awards in Hong Kong. Continue reading

Inconsistent dispute resolution clauses – exploring the limits of the Fiona Trust presumption

The presumption that “rational businessmen” intend all their disputes to be resolved in the same forum may not apply where the parties clearly intended otherwise. Construing such intentions requires a “broad and commercially minded approach” to inconsistent dispute resolution clauses.

In H v G [2022] HKCFI 1327, the Hong Kong Court of First Instance set aside an arbitral tribunal’s determination that it had jurisdiction over claims under a warranty where an associated contract contained the arbitration clause, but the warranty itself provided for litigation in Hong Kong.  This decision underlines that there are limits to the Fiona Trust presumption in cases where the parties’ overall contractual arrangements give rise to agreements containing different dispute resolution provisions.

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Welcome to the twelfth issue of Inside Arbitration

We are delighted to share with you the latest, new look issue of this publication from Herbert Smith Freehills’ Global Arbitration Practice.

Uncertainty has been the watchword of 2021 so far. As the Covid-19 pandemic continues to impact our work and personal lives many questions remain about the virus and our global response to it. However, since the light at the end of the tunnel does appear to be shining more brightly, we have grasped the opportunity to look forward positively in this edition of Inside Arbitration.

Incorporating videos and soundbites from our practitioners around the network, in this edition:

  • Paula Hodges QC, Andrew Cannon, Simon Chapman QC and Vanessa Naish explore whether it is possible to predict how the post-pandemic disputes landscape may look and how arbitration practice may be impacted longer term.
  • The pandemic is not the only significant force for change and development facing the world at present. Antony Crockett, Patricia Nacimiento and Dr. Alessandro Covi look at what “ESG” means for businesses, how ESG issues are being introduced into commercial contracts, and the potential impact of these trends on international arbitration.
  • Continuing the theme of change, Craig Tevendale, Chris Parker and Charlie Morgan focus on energy transition, looking at the challenges on the horizon and the potential legal disputes that may arise from the proliferation of new infrastructure projects.
  • Change has also been felt within the Herbert Smith Freehills’ arbitration practice. Our three new talented arbitration Partners Dana Kim (in Seoul), Antony Crockett (in Hong Kong) and Ivan Teselkin (in Moscow) feature in Spotlight articles introducing their differing areas of practice and sharing their views on the outlook for arbitration in their regions.
  • The recognition of the talent of our practitioners and the growth of our global practice is exciting, but so too are successes in our cases, particularly those that can be reported publicly! Simon Chapman QC and Charlotte Benton discuss a recent success in a landmark case in Hong Kong, which has confirmed that failure to comply with escalation requirements will not affect an arbitration tribunal’s jurisdiction over the dispute.
  • Looking at wider developments across the globe, Andrew Cannon and Nihal Joseph explore the significance of an important new judgment from the Supreme Court of India which decided that two Indian parties may validly agree to resolve their disputes in arbitration seated outside India.
  • Chad Catterwell and Guillermo Garcia-Perrote look at the rise of Arbitration in Australia, and how the release of the ACICA Arbitration Rules 2021 have further strengthened ACICA’s status as the pre-eminent arbitral institution in Australia.
  • In our sector-focused piece Hew Kian Heong, James Doe and Noe Minamikata take a look at the current hot topics in construction arbitration: the impact of recent materials shortages, a possible rise in construction insolvencies and the continuing effects of the Covid-19 pandemic on construction projects.
  • Our “watch this space” feature covers the latest issues and developments in international arbitration.

Previous issues can also be viewed on our website.

We hope that you enjoy reading issue #12 of Inside Arbitration and would welcome any feedback you may have.


Herbert Smith Freehills has promoted eleven disputes lawyers to its partnership out of a total of 23 worldwide. The promotions in the disputes practice, which take effect on 1 May 2021, span across the firm’s international network.

Of these new partners, four are arbitration specialists, reflecting the strength and importance of the practice area to the firm.

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PRC court sets aside cryptocurrency award on public interest grounds

Shenzhen Intermediate People’s Court has ordered that an arbitral award made by Shenzhen Arbitration Commission (also known as Shenzhen Court of International Arbitration) be set aside on the ground that awarding damages in US dollars in lieu of crypto is against the public interest.

(2018) Yue 03 Min Te No. 719 or (2018) 粤03民特719号


The 2nd Respondent (Li) commissioned the Applicant (Gao) to conduct cryptocurrency wealth management. Gao failed to return the relevant assets and profits to Li. Gao, Li and the 1st Respondent (Yunsilu Fund) then entered into a share transfer agreement (Agreement), whereby the parties agreed that: (1) Yunsilu Fund should transfer a 5% share in a company to Gao at a consideration of RMB 550,000 (Consideration); (2) Li should pay RMB 300,000 to Yunsilu Fund on behalf of Gao as part of the Consideration and Gao should pay the remaining RMB 250,000 to Yunsilu Fund directly; and (3) Gao should return the relevant crypto assets (20.13 Bitcoin, 50 Bitcoin Cash, and 12.66 Bitcoin Diamond) to Li.

Gao failed to perform his obligation under the Agreement. Yunsilu Fund and Li commenced arbitration proceedings against Gao at the Shenzhen Arbitration Commission. They asked the tribunal to order that (1) the shares be transferred to Gao; (2) Gao pay RMB 250,000 to Yunsilu Fund; (3) Gao pay the US dollar equivalent of the crypto assets to Li, plus interest; and (4) Gao pay damages of RMB 100,000.

The arbitral tribunal found that Gao had failed to deliver crypto as agreed by the parties (who considered that such crypto had property value). This constituted a breach of contract and merited an award of damages. The tribunal referred to public information about the closing price of Bitcoin and Bitcoin Cash at the agreed date of contractual performance, and estimated the loss at US$401,780. The tribunal ordered that (1) the shares be transferred to Gao, (2) Gao pay RMB 250,000 to Yunsilu Fund, (3) Gao pay US$401,780 to Li (to be converted to RMB at the exchange rate as of the date of the award); and (4) Gao pay damages of RMB 100,000 to Li.

Gao applied to the Shenzhen Intermediate People’s Court to set aside the award.


Since this is a Chinese domestic arbitral award, the Court reviewed it in accordance with Article 58 of the PRC Arbitration Law. The main issue for determination was whether the award was against the public interest. The Court held that, according to the Circular of the People’s Bank of China, the Ministry of Industry and Information Technology, the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission on Preventing Risks from Bitcoin (Yin Fa [2013] No.289), Bitcoin does not have the same legal status as a fiat currency, and cannot and should not be circulated in the market as a currency. In 2017 seven authorities, including the People’s Bank of China, jointly issued the Announcement on Preventing Risks relating to Fundraising through Token Offerings to reiterate the above provision. Meanwhile, from the perspective of preventing financial risks, the Announcement further provides that any so-called “token” financing and trading platform shall not:

  1. engage in exchange business between fiat currencies and tokens or between “virtual currencies”;
  2. trade tokens or “virtual currencies” for itself or as a central counterparty; or
  3. provide pricing, information agency or other services for tokens or “virtual currencies”.

The above documents essentially prohibit the redemption, trading and circulation of Bitcoin in Mainland China, as well as speculation in Bitcoin and other activities that may amount to engaging in illegal financial activities, disturbing the financial order or affecting financial stability.

The arbitral tribunal ruled that Gao Zheyu should compensate Li Bin for the US dollar equivalent of the Bitcoin, then convert the US dollars into RMB. The Shenzhen Court ruled that this amounted to redemption and trading between Bitcoin and fiat currency in a disguised form, which contravenes the spirit of the above documents and violates the public interest. It therefore set aside the arbitral award. The Court declined to review the other grounds raised by the Applicant Gao Zheyu.


This ruling sends a clear warning that enforcing a crypto-related arbitral award may be difficult in jurisdictions, such as Mainland China, which show little tolerance for the cryptocurrency business.

Despite the fact that some Mainland Chinese courts have recognised Bitcoin as a “virtual commodity” or “virtual asset” (see (2019) Hu 01 Min Zhong No. 13689), it is important to remember that trade and exchange of cryptocurrencies (especially trading with fiat currencies) is strictly prohibited in Mainland China.

Claimants in crypto-related arbitrations with any Mainland element must take great care when framing their requests for relief. For example, if a claimant is owed crypto currency, instead of asking the tribunal to convert the debt into a fiat currency for damage calculation, the claimant may consider asking for damages to be paid in the same crypto currency to avoid any uncertainty on enforcement.

For more information, feel free to get in touch with any of the contacts below, or your usual Herbert Smith Freehills contact.

Helen Tang
Helen Tang
+86 21 2322 2160
Antony Crockett
Antony Crockett
Senior Consultant
+852 21014111
Briana Young
Briana Young
Professional Support Consultant
+852 21014214


Herbert Smith Freehills has promoted four new Of Counsel from within the global arbitration practice with effect from 1st May. With promotions in New York, Singapore, Hong Kong and Beijing, the new Of Counsel are:

Florencia Villaggi, New York: Florencia specialises in international arbitration. She is a native Spanish-speaking practitioner from Latin America, trained in the Civil Law system but with extensive practice in a Common Law jurisdiction. Her experience encompasses commercial and investment arbitration, with focus on the Latin American region and the energy sector.

Dan Waldek, Singapore: Daniel is a highly rated disputes lawyer specialising in construction, energy and infrastructure disputes covering projects across Asia Pacific. He is admitted as a solicitor in England and Wales and the BVI, and is a Recognised Foreign Lawyer with the Singapore International Commercial Court.

Antony Crockett, Hong Kong: Antony has a significant regional and international market profile in business and human rights. He is qualified in Australia (Victoria), England and Wales, and Hong Kong SAR. He acts as an advocate in international arbitration proceedings and in arbitration-related court proceedings.

Stella Hu, Beijing: Stella is a trilingual Mainland Chinese arbitration specialist with experience in complex cross-border disputes. She has strong client relationships with Chinese State-owned companies, private companies and financial institutions.

Paula Hodges QC notes,  “We are delighted to welcome four new Of Counsel from within the global arbitration practice, which – together with our recent Partner promotions –  showcases the outstanding lawyers we have in our international arbitration practice. With Of Counsel promotions in New York, Singapore, Hong Kong and Beijing, it is wonderful to see affirmation of the strength and breadth of the talent across the network.”