By Edmund Wan and Nicole Parlee  King & Wood Mallesons’ Hong Kong Office.

Cwan_eonsider this situation: a dispute has arisen between two parties in relation to an agreement which is subject to an arbitration clause. Separately, a winding up application has been made against one of the parties to the arbitration in the jurisdiction in which it is incorporated. An arbitral award is obtained against the potentially insolvent company. That company has assets in Hong Kong, against which the creditor is now seeking to enforce their rights. Due to Hong Kong courts’ generous enforcement of arbitral awards, the lead up to a winding up order may prove to be a costly time for a foreign liquidator and other creditors of the foreign company.

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