Hong Kong - A Year In Review

2018 brought with it a number of important legal developments in Hong Kong and this article summarises some of the more important ones.

 

Competition law defences: The High Court has ruled on 17 May 2018, in Taching Petroleum Company, Limited v Meyer Aluminium Limited [2018] HKCFI 1074, that (1) contravention of a competition conduct rule could be raised as a defence to a High Court action; and (2) a follow-on action could be made in the context of a defence in an action raising a contravention of a conduct rule.

 

Competition Commission brings its first action against individuals: On 6 September 2018, the Hong Kong Competition Commission commenced a legal action in the Hong Kong Competition Tribunal against three decoration contractors and two individuals in connection with the provision of decoration services to the owners of a newly constructed residential estate in Kowloon. This is the first time that individuals (i.e. natural persons) have been named as respondents in an enforcement action under the Hong Kong Competition Ordinance. For further information, please see previous article dated 11 September 2018.

 

Court of Final Appeal narrowly construes “innocent purpose/no profit defence” in insider dealing: In its 12 October 2018 judgment, the Court of Final Appeal, allowed the SFC’s appeal against the Market Misconduct Tribunal’s findings that two former executives of Asia Telemedia Limited had not engaged in insider dealing under the Securities and Futures Ordinance (SFO). By virtue of this decision, the innocent purpose defence in section 271(3) of the SFO will be construed narrowly. For further information, please see previous article dated 18 December 2018.

 

Labour Tribunal can now order reinstatement of employee without employer’s consent: The Employment (Amendment) (No. 2) Ordinance 2018, came into effect on 19 October 2018. If an employee is unreasonably and unlawfully dismissed, the employer’s agreement is no longer a pre-requisite for the court or Labour Tribunal to make an order for reinstatement or re-engagement of the employee. For further information, please see previous article dated 29 May 2018.

 

Court of Final Appeal upholds landmark ruling on insider dealing in respect of overseas listed securitiesIn its 31 October 2018 judgment, the Court of Final Appeal upheld the decisions of the Court of Appeal and Court of First Instance, ruling that the word “transaction” in the context of s.300 of the Securities and Futures Ordinance must be given a wide meaning to include conduct which took place before the purchase and sale of securities and is a general provision which outlaws fraudulent conduct in securities transactions.  Insider dealing in Hong Kong of overseas securities is thus prohibited under s.300.  For further information on the decisions of the Court of First Instance and Court of Appeal, please see previous articles dated 9 March 2016 and 11 December 2017

 

New HKIAC Administered Arbitration Rules: A new version of the HKIAC’s Administered Arbitration Rules came into effect on 1 November 2018, together with a Practice Note on the Appointment of Arbitrators. For further information, please see previous article dated 26 October 2018.

 

Increase in civil jurisdictional limits of the District Court and Small Claims Tribunal: On 3 December 2018, the general civil jurisdictional limit of the District Court increased from HK$1 million to HK$3 million. The jurisdictional limit of the Small Claims Tribunal increased from HK$50,000 to HK$75,000 and fees for filing claims were adjusted. For further information, please see previous article dated 30 July 2018.

 

Third Party Funding of Hong Kong arbitrations to be permitted: On 7 December 2018, the Hong Kong Government announced that provisions permitting third party funding of arbitrations will come into effect on 1 February 2019. For further information, please see previous article dated 17 December 2018.   

 

For more see Conventus Law.