Where freezing assets across the Hong Kong-Mainland

A creditor who wins on the merits but cannot reach the assets has won nothing. For disputes with a cross-boundary dimension – where the claimant sits in Hong Kong, the respondent's assets sit on the Mainland, or the reverse – the question of interim preservation is not procedural housekeeping. It is the commercial heart of the case.

Since 1 October 2019, a party to a Hong Kong-seated arbitration has been able to apply directly to a Mainland people's court for an order preserving assets or evidence on the Mainland before the arbitral award is made – a mechanism created by the Arrangement Concerning Mutual Assistance in Court-Ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Two Places (the Interim Measures Arrangement). The Interim Measures Arrangement operates alongside the longer-established arbitral-award enforcement regime and the more recent Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), which entered into force on 29 January 2024. Together, these three instruments define the cross-boundary asset-preservation and enforcement landscape. Each works differently, and the interaction between them matters.

This analysis maps the current position across both systems, identifies where the risk sits in practice, and offers a view on what the landscape means for principals managing cross-boundary exposure now.

What is commercially at stake when assets straddle the boundary

Cross-boundary asset exposure is not a niche concern. For any commercial relationship between a Hong Kong counterparty and a Mainland entity – joint ventures, supply agreements, intercompany loans, project finance – assets will typically sit on both sides of the boundary. When that relationship breaks down, the question that matters is not which system will hear the claim, but which system can actually hold or realise the assets.

Dissipation risk is the sharpest concern. A respondent who becomes aware of impending proceedings has both the motive and, in many cases, the operational capacity to move assets quickly. In a purely domestic dispute, an urgent application to the court of the asset location is the standard response. In a cross-boundary dispute, the position is more complicated: the two systems are not the same system, and the procedural steps do not mirror each other.

The commercial calculus runs like this. An award or judgment against a Mainland counterparty is only as good as the assets available to satisfy it. Where those assets can be located and preserved early – before a Mainland entity restructures its holding, transfers property to a related party, or moves receivables offshore – the claimant's position is materially stronger. A failure to move early on preservation, or to move in the wrong sequence, is in our experience one of the most common reasons a technically sound case produces a commercially hollow result.

For Mainland claimants seeking to preserve Hong Kong assets, the position has its own asymmetries. Hong Kong courts have an established jurisdiction to grant Mareva injunctions (freezing orders, available under the court's inherent jurisdiction and statutory powers) against defendants with assets or connections in Hong Kong. That jurisdiction is well developed. The boundary issue runs in the other direction – when a Mainland judgment or award creditor needs to convert a Mainland-issued order into something the Hong Kong court will recognise and act upon.

The governing instruments: three regimes in play

Three distinct instruments govern the current cross-boundary position, and they must be understood as a set. No single regime covers the full spectrum from pre-award preservation to post-award execution.

The first is the Interim Measures Arrangement, in force since 1 October 2019. It allows a party to a Hong Kong-seated arbitration – whether or not the arbitral proceedings have formally commenced under the rules of one of the designated institutions – to apply to a Mainland people's court for preservation of assets, evidence or conduct. This was a significant development. Prior to the Arrangement, there was no direct route from a Hong Kong arbitration seat to a Mainland preservation order. A claimant had to rely on the Mainland court's own processes, which turned on the existence of a Mainland action, not a Hong Kong-seated arbitration. The Arrangement changed that link entirely.

Eligibility under the Arrangement is institution-specific: only arbitrations administered by institutions on the designated list may benefit. The HKIAC is on that list. Parties structuring a cross-boundary commercial agreement should treat the choice of arbitral institution and the seat of arbitration as connected decisions, not independent ones.

The second instrument is the arbitral-award mutual enforcement framework, which has operated since the 1999 Arrangement and was supplemented in 2020. The 2020 Supplemental Arrangement introduced a meaningful procedural improvement: it permitted simultaneous enforcement applications in both the Mainland and Hong Kong, reversing the earlier one-jurisdiction-at-a-time approach. Where an award creditor has assets or counterparties on both sides of the boundary, the ability to move concurrently is operationally significant.

The third is the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), in force since 29 January 2024. This replaced the earlier 2008 regime under what was then Cap. 597. The earlier regime required both parties to have submitted to an exclusive jurisdiction agreement designating the Mainland court. That requirement has been removed under Cap. 645, replaced by a connection-based test. The practical effect is a materially wider scope: more Mainland judgments are now eligible for registration with Hong Kong's Court of First Instance, and the route to recognition is more predictable than it was.

Cap. 645 covers both monetary and certain non-monetary judgments. It excludes certain categories including insolvency, arbitration-related determinations, certain intellectual-property matters, succession and matrimonial causes. Where a Mainland judgment sits within the exclusion list, the general-law route – establishing the judgment at common law – remains available, though it carries its own requirements.

Parties should verify the current position before acting, as this regime is relatively new and practice under Cap. 645 continues to develop.

How does the cross-boundary interface actually bite in practice?

Understanding the regimes in isolation is not enough. The cross-boundary interface bites at specific pressure points, and identifying those points early is where the practical analysis begins.

The first pressure point is timing. The Interim Measures Arrangement permits a preservation application to a Mainland people's court before an award is issued – that is its entire purpose. But the application must be made through the designated HKIAC mechanism, and the Mainland court's response will depend on how the application is presented and whether the jurisdictional conditions are met. Speed matters: a dissipation event can occur between the filing of the application and the court's ruling. Parties who have not already identified the relevant assets, the likely Mainland court, and the materials needed for a preservation application are at a structural disadvantage once a dispute escalates.

The second pressure point is the sequence of proceedings. In a cross-boundary dispute, an applicant may be considering: a Hong Kong-seated arbitration, a Mainland court action, or both. The choice of primary forum determines which preservation tools are available and which enforcement routes open downstream. A Mainland court action can support Mainland preservation measures directly. A Hong Kong-seated arbitration opens the Interim Measures Arrangement route but also requires the award to clear the enforcement framework at the end. These are not equivalent choices, and they cannot be made in isolation from the asset location.

The third pressure point is the scope of recognition. Not every Mainland judgment or order will register under Cap. 645. Not every Hong Kong judgment will travel to the Mainland cleanly. The exclusion lists matter, and so does the characterisation of the underlying relief. A judgment in a commercial contract dispute is in a different position from a judgment with insolvency or arbitration-adjacent dimensions.

We regularly advise on matters where the initial structuring of the dispute – the choice of forum, the institutional rules, the governing law clause – forecloses options that would have been available with different drafting. The cross-boundary issue is not something that arises only when the relationship breaks down; it is baked into the contract from the outset.

The sequence above describes the standard position. Your matter turns on the documents, the jurisdictions actually engaged, and the order of steps – which is where the route is won or lost.

For a preliminary read on your cross-boundary preservation position and the enforcement route, email info@lockhartyip.com.

A comparative read: the Hong Kong and Mainland systems side by side

Hong Kong and the Mainland operate on distinct procedural foundations. Understanding the functional difference between them is not an academic exercise – it determines what can be asked of each system and when.

Hong Kong courts grant freezing orders (Mareva injunctions) under an established common-law jurisdiction. The applicant must satisfy the court that: there is a good arguable case on the merits; there is a real risk of dissipation; and the balance of convenience favours the order. Applications can be made ex parte (without notice to the respondent) in urgent circumstances. The court can also grant a worldwide freezing order with appropriate undertakings, extending the order's reach beyond Hong Kong-situated assets – although enforcement of the worldwide element outside Hong Kong depends on the law and courts of the relevant jurisdiction.

On the Mainland, caibao (financial property preservation, the standard mechanism for freezing assets in a Mainland court action) operates through the people's courts. A preservation application is generally made together with or in advance of the substantive claim. Where no Mainland court action is pending, the Interim Measures Arrangement supplies the missing link for a Hong Kong-seated arbitration – but only for arbitrations at a designated institution.

The procedural standards are not identical. Mainland courts considering a preservation application under the Arrangement apply their own procedural law. Applicants need to be prepared for the possibility that the Mainland court will require a security deposit or undertaking as a condition of granting the order. The quantum and form of that security is a matter for the Mainland court. This is not unique to the cross-boundary context, but it is a cost and timing variable that applicants in purely Hong Kong proceedings do not face in the same way.

A micro-scenario illustrates the interface. A mid-market joint venture between a Hong Kong-incorporated group and a Mainland operational entity broke down in early 2025. The Mainland entity held substantially all the group's fixed assets. Our client, the Hong Kong party, had an HKIAC arbitration clause in the joint venture agreement. We filed for arbitration under the HKIAC Administered Arbitration Rules and simultaneously prepared the preservation application to the relevant Mainland people's court under the Interim Measures Arrangement. The Mainland court issued its order within a timeframe that allowed our client to secure the principal assets before any restructuring step could take effect. The arbitration proceeded with the asset position preserved. The outcome of the substantive claim remained to be determined – but the commercial position was protected in a way it would not have been had the preservation step been delayed or approached through the wrong channel.

What happens when the Mainland applies its own preservation logic first?

The analysis above assumes a Hong Kong-side applicant seeking Mainland preservation. The cross-boundary dynamic operates in reverse as well, and that reverse direction presents distinct challenges for Hong Kong parties facing Mainland-initiated proceedings.

A Mainland party commencing litigation in a Mainland court can apply for caibao in respect of the Mainland defendant's assets in the ordinary way. If the Mainland claimant then seeks to extend that protective reach to assets situated in Hong Kong – or later seeks to enforce a Mainland judgment against a Hong Kong respondent – the applicable regime is Cap. 645, not the Interim Measures Arrangement. The Arrangement moves only in one direction at the interim stage: it connects a Hong Kong-seated arbitration to the Mainland courts. It does not create a route from a Mainland court action to Hong Kong court interim relief.

For a Mainland party seeking interim preservation in Hong Kong in support of a Mainland action, the available route is the common-law jurisdiction of the Hong Kong court, which has granted freezing orders in support of foreign proceedings in appropriate circumstances. That jurisdiction exists but its conditions differ from those that apply in a purely domestic Hong Kong matter. The respondent's connection to Hong Kong, the asset location, and the risk of dissipation all require careful presentation.

If an earlier filing, structure or enforcement attempt produced an adverse or stalled result, a second read can identify the strategic error and the routes still open. Contact us at info@lockhartyip.com.

Where the risk sits now: our read on the current position

The legal architecture across the boundary has improved substantially since 2019. The Interim Measures Arrangement, the 2020 Supplemental Arrangement, and Cap. 645 together represent the most functional cross-boundary enforcement framework this corridor has seen. That is worth acknowledging clearly.

But improvement in the architecture does not eliminate execution risk. In our cross-border practice, we see a consistent pattern: the technical tools are available; the failures occur in the sequencing, the preparation, and the early structural decisions.

Three risk areas stand out at the current moment.

The first is institution and seat selection. The Interim Measures Arrangement only covers arbitrations administered by designated institutions. Groups that have signed cross-boundary commercial agreements with ad hoc arbitration clauses, or with non-designated institutional rules, have no direct route to Mainland preservation in a Hong Kong-seated arbitration. This is a gap that exists in the contract, not the law. It can only be addressed before a dispute arises.

The second is the scope of Cap. 645 and its exclusion list. The new regime under Cap. 645 is broader than its predecessor, but it is not universal. A Mainland judgment that falls outside the regime – because it touches on excluded categories, or because the jurisdictional conditions under the connection-based test are not satisfied – must be enforced through the common-law route in Hong Kong, which is slower and less predictable. The characterisation of a judgment matters, and a mixed judgment (for example, a commercial claim determined in proceedings that also involved an insolvency element) requires careful analysis of which portions are registrable.

The third is the coordination between preservation and substantive proceedings. The Interim Measures Arrangement is a pre-award tool. Once the award is issued, enforcement runs through the separate arbitral-award framework. That transition – from preservation to enforcement – is not automatic, and a preservation order does not convert into a permanent execution right. Parties who treat the preservation step as the end of the process, rather than as a securing measure within a longer enforcement sequence, often find themselves unprepared for what follows.

A second scenario underlines this. A European fund with a Hong Kong operating subsidiary and a Mainland development partner came to us in late 2025 after an arbitral award in its favour had been issued under HKIAC rules. The fund had obtained a preservation order under the Interim Measures Arrangement earlier in the proceedings. The question was how to convert the preserved position into executed recovery. We mapped the concurrent enforcement routes under the 2020 Supplemental Arrangement, coordinated the Mainland and Hong Kong filings simultaneously, and assessed the scope of the preserved assets against the award sum. The process required careful sequencing across both systems – and the time between the award and actual recovery was substantially compressed by the simultaneous-filing approach compared with the sequential approach that would have applied under the pre-2020 framework.

What the current position means for contract drafting and dispute strategy

The cross-boundary asset-preservation landscape has a direct implication for how commercial agreements should be structured and how dispute strategies should be prepared before any issue arises.

On contract drafting, the governing-law and dispute-resolution clause is not a boilerplate exercise for any agreement with a cross-boundary dimension. The choice of seat determines which preservation tools are available. The choice of institution determines whether the Interim Measures Arrangement applies. The governing law affects the substantive rights that must be demonstrated on a preservation application. And the interaction between the dispute-resolution clause and the default rules of the relevant court must be understood before the clause is signed.

Does your existing cross-boundary commercial documentation actually give you access to the Interim Measures Arrangement? That is a question worth answering before the relationship becomes contentious.

On dispute strategy, early preparation of the preservation application is not a sign of bad faith; it is a feature of professional cross-boundary litigation management. Identifying the assets, locating them within the relevant Mainland court's jurisdiction, preparing the evidentiary materials, and understanding the likely security requirements of the Mainland court should be steps in the pre-filing plan, not reactions to a dissipation event after it has occurred.

The Disputes & Arbitration practice at Lockhart & Yip operates across the full sequence of cross-boundary disputes – from the pre-filing preservation strategy through to award enforcement and execution. Our desk has particular experience with shareholder and joint venture disputes involving Mainland partners, where the asset-preservation question is often the first practical battleground, and with enforcement matters in multiple jurisdictions, including the framework covered in our analysis of enforcing Hong Kong arbitral awards in the UAE.

A common objection answered: is the common-law route a viable alternative?

A recurring view among foreign principals – and occasionally among counsel unfamiliar with the current position – is that the common-law enforcement route offers a reliable fallback if the structured cross-boundary regimes produce complications. That view requires qualification.

The common-law route for enforcing a Mainland judgment in Hong Kong requires the judgment to meet conditions that differ from the registration conditions under Cap. 645. The Mainland court must have had jurisdiction in the common-law sense, the judgment must be final and conclusive, and it must not be impeachable on grounds recognised under Hong Kong common law (such as fraud, denial of natural justice, or public policy). These conditions can be met, but they are not guaranteed, and the proceedings are adversarial rather than administrative – meaning the judgment debtor has an opportunity to challenge the recognition in ways that a registration under Cap. 645 does not provide to the same degree.

For a judgment that falls within Cap. 645's scope, the registration route is generally faster and more predictable than the common-law action. The common-law route remains valuable for judgments outside the regime's scope – particularly those involving jurisdictions or subject-matter categories that Cap. 645 does not cover. But treating it as a simple alternative to structured enforcement is a strategic error that our desk sees recurrently.

Similarly, on the Mainland side, parties sometimes assume that a Hong Kong arbitral award will enforce smoothly in the Mainland without attention to the specific procedural requirements of the 1999 Arrangement and its 2020 Supplement. The conditions for enforcement – the form of the award, the residual grounds for refusal, the competent court – require preparation, not assumption.

Related practices

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Frequently asked questions

Do I need a Hong Kong adviser for freezing assets across the Hong Kong-Mainland boundary?

A cross-boundary preservation strategy requires counsel who can coordinate across both systems – understanding both the Hong Kong court's jurisdiction and the Interim Measures Arrangement's conditions, as well as the enforcement framework under Cap. 645. A Hong Kong-side adviser working with Mainland-side counsel is the standard operating model for this work. In our cross-border practice, we manage this coordination directly, ensuring that the preservation application, the substantive proceedings, and the enforcement sequence are aligned rather than handled in sequence by advisers with different frames of reference. Parties should verify the current procedural requirements before acting.

What does the route look like for freezing assets across the Hong Kong-Mainland boundary?

For a Hong Kong-seated arbitration involving a designated institution such as the HKIAC, the Interim Measures Arrangement provides the direct route to a Mainland people's court for an asset-preservation order before the award is made. Once the award is issued, enforcement proceeds through the separate arbitral-award framework under the 1999 Arrangement and its 2020 Supplement. For Mainland court judgments, Cap. 645 – in force since 29 January 2024 – provides the registration mechanism with the Court of First Instance. The specific route depends on the forum, the institution, the asset location, and the characterisation of the relief sought. Parties should obtain advice on their specific position before commencing.

How long does freezing assets across the Hong Kong-Mainland boundary usually take?

Timing depends on which system is engaged and at what stage. A Hong Kong court can act on an urgent ex parte freezing application within days where the circumstances justify it. A Mainland people's court considering a preservation application under the Interim Measures Arrangement operates under its own procedural timetable, which the Arrangement does not prescribe in the same way. Post-award enforcement under the arbitral-award framework involves the time for award registration and any challenge period in the relevant court. Qualitatively, the concurrent-filing approach available since the 2020 Supplemental Arrangement compresses the total timeline compared with sequential enforcement. No timeline can be guaranteed; parties should verify the current position with their adviser.

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.

Where freezing assets across the Hong Kong-Mainland boundary stands now