Hong Kong Court of Appeal rules on landmark case regarding escalation clauses

Herbert Smith Freehills has secured an important judgment from the Hong Kong Court of Appeal, C v D [2022] HKCA 729, regarding escalation clauses – contractual provisions which require negotiation or mediation before either party can begin formal proceedings. These clauses are intended to promote the efficient resolution of disputes, but often lead to costly … Read more

Hong Kong Court of Appeal embraces modern test for penalty clauses following UK Supreme Court in Cavendish when considering employer’s right to enforce termination notice provision

In a notable judgment (Law Ting Pong Secondary School v Chen Wai Wah [2021] CA 873), the Hong Kong Court of Appeal (CA) has adopted the modern approach to penalty clauses handed down in the UK Supreme Court in Cavendish Square Holding BV v Talal El Makdessi [2016] AC 1172. The recent appellate decision has … Read more

KEY JUDGMENT ON ARBITRATION CLAUSES AFFECTING THOUSANDS OF COMMERCIAL CONTRACTS

Herbert Smith Freehills has secured an important victory in Hong Kong proceedings with far-reaching consequences for arbitration disputes around the world. Many commercial contracts contain “escalation clauses” requiring parties to take certain steps before formal arbitration begins – such as a requirement to “negotiate in good faith” before starting arbitration. Previously, failure to comply with … Read more

English High Court finds alleged frustration of contract due to COVID-19 pandemic is not sufficiently arguable to grant injunction restraining demand under letter of credit

The English High Court has dismissed an application for an injunction to prevent an airline group from making demands under bank-confirmed standby letters of credit (SBLCs), securing aircraft leases granted to the claimant (a budget passenger airline), on the basis that it was not sufficiently arguable that the leases were frustrated due to the effects … Read more