How to approach freezing assets

A creditor who wins an arbitration award against a Mainland counterparty faces an immediate tactical question: the assets that matter are on one side of the boundary, the legal machinery is on the other, and the two regimes do not move at the same speed. Getting the sequence right – and getting it right early – is the difference between a judgment that pays and one that sits on a shelf.

Freezing assets across the Hong Kong-Mainland boundary requires coordinating two distinct legal regimes: interim measures applications in Hong Kong-seated arbitrations that seek orders from Mainland courts, available under the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong SAR, which has been in effect since 1 October 2019; and, for post-award enforcement, the registration mechanism under the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), which took effect on 29 January 2024. The sequence and timing of each step are governing considerations.

This guide sets out the decision the reader faces, the steps in order, the gate at each stage, and the common errors that cause enforcement to stall.

What decision does the reader actually face?

Before any application is filed, the practitioner must answer a prior question: is the primary goal to prevent asset dissipation before an award, or to enforce rights after one has been obtained? The answer determines which instrument applies, which court is engaged, and what evidence is required at each stage.

Pre-award, the objective is typically an interim measure – an order that restrains a respondent from moving, encumbering or dissipating specific assets pending the resolution of the dispute. In a Hong Kong-seated arbitration, this is now achievable directly against assets located in the Mainland, without needing to commence parallel Mainland litigation. That option did not exist before 2019. Its availability is one of Hong Kong's most practically significant procedural advantages for parties with Greater China exposure.

Post-award, the objective shifts to enforcement and recovery. The enforcement route depends on whether the underlying decision is an arbitral award or a court judgment, and on where the assets sit. Each path has its own instrument, its own timeline, and its own set of exclusions. Confusing the two stages – or applying the wrong instrument to the wrong stage – is the single most common error we see on cross-border matters of this kind.

In our cross-border practice, the cases that proceed most efficiently are those where the asset-preservation strategy is mapped at the outset, before the first substantive submission is filed. Late decisions about freezing typically arrive too late to be fully effective.

Which instrument governs at each stage?

Two instruments govern the cross-boundary asset-preservation and enforcement position, and they operate in sequence rather than in parallel.

The first is the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong SAR (the Interim Measures Arrangement). This instrument, in force since 1 October 2019, allows a party to a Hong Kong-seated arbitration administered by a qualifying institution – including the HKIAC – to apply to a competent Mainland people's court for an interim measure order in respect of assets located in the Mainland. The arbitration must be seated in Hong Kong and administered by one of the designated institutions. The key point is timing: the application to the Mainland court can be made at any stage of the arbitration, including before an award is issued. No parallel Mainland litigation is required.

The second instrument is the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645). This ordinance, which came into force on 29 January 2024, replaced the earlier choice-of-court regime and removed the old requirement that both parties had explicitly agreed to exclusive Mainland jurisdiction. Under Cap. 645, an effective Mainland court judgment in a civil or commercial matter can be registered with the Court of First Instance in Hong Kong and enforced as if it were a Hong Kong judgment. The converse route – using a certified Hong Kong judgment in the Mainland – is also available under the same regime. Certain categories of judgment are excluded: insolvency matters, some intellectual-property decisions, and certain arbitration-related orders sit outside the ordinance's scope.

For arbitral awards specifically, the 1999 Arrangement on Mutual Enforcement of Arbitral Awards (as supplemented in 2020) remains the governing instrument. Since a 2021 amendment to that regime, simultaneous enforcement applications in both jurisdictions are permitted – a significant practical development for creditors who face asset dissipation risk on both sides of the boundary.

What is the step-by-step sequence for a pre-award freeze?

A pre-award asset freeze targeting Mainland-located assets from a Hong Kong-seated arbitration follows a defined sequence, and each step has a gate that must be cleared before the next is engaged.

Step 1: Confirm the seat and the administering institution. The Interim Measures Arrangement applies only to arbitrations seated in Hong Kong and administered by a designated institution. HKIAC-administered arbitrations qualify. An ad hoc arbitration or one administered by a non-designated body does not. If the arbitration agreement is ambiguous on seat or administrator, this must be resolved before any Mainland application is possible.

Step 2: Identify and verify the assets. The Mainland court will require specific identification of the assets to be frozen: their type, location, and estimated value. A general application against unspecified assets is unlikely to succeed. This requires early asset-tracing work, often coordinated before or immediately after the arbitration is commenced. The quality of the asset identification at this stage largely determines whether the order is granted and in what scope.

Step 3: Apply to the Mainland people's court. The application is made to the competent Mainland people's court in the location where the assets are situated, using the procedural requirements of that court. The applicant typically provides security, the amount of which is assessed by the court on the facts. The HKIAC will issue the relevant documentation to facilitate the cross-boundary application.

Step 4: Manage the Hong Kong arbitration in parallel. The interim measure application does not pause the arbitration. Timetable management is essential: the Mainland court's response, the arbitral tribunal's directions, and any emergency-arbitrator application in Hong Kong must be coordinated. Under the 2024 HKIAC Administered Arbitration Rules (effective 1 June 2024), an emergency arbitrator process is available for relief sought before the tribunal is constituted, with a target completion timeframe of 14 days from file transmission. The emergency arbitrator route and the Mainland court route serve different asset classes; they are not mutually exclusive.

Step 5: Maintain the freeze through to the award. Once an interim measure order is granted, it must be maintained. This typically requires compliance with any security conditions and, depending on the Mainland court's order, periodic review. A freeze that lapses before the award is issued may be difficult to reinstate if the respondent has been alerted.

What is the step-by-step sequence for post-award enforcement?

After an award is issued, the enforcement sequence diverges depending on whether the underlying decision is an arbitral award or a court judgment, and where the assets to be enforced against are located.

For an arbitral award in a Hong Kong-seated arbitration with assets in the Mainland, the 1999 Arrangement and its 2020 supplement apply. The award creditor files an application in the competent Mainland people's court. Since the 2021 amendment to the regime, a simultaneous application in both Hong Kong and Mainland courts is permitted, which is a material advantage where assets are distributed across the boundary. Hong Kong courts register the award separately under the Arbitration Ordinance (Cap. 609).

For a Mainland court judgment (rather than an arbitral award), Cap. 645 governs enforcement in Hong Kong. The judgment creditor applies to register the Mainland judgment with the Court of First Instance. A certified copy of the judgment and a certificate of effectiveness are required. Once registered, the judgment has the same effect as a Hong Kong court order and can be enforced through the full range of Hong Kong enforcement mechanisms. The registration process is not automatic – the respondent has an opportunity to object on grounds set out in the ordinance – but the grounds for refusal are defined and limited.

A question arises for every cross-boundary enforcement matter: do the assets actually sit in Hong Kong, the Mainland, or in an offshore holding structure above the operating entity? Where a Mainland operating company is held through a BVI or Cayman vehicle, the enforcement route against the holding entity is different again, and may require separate proceedings in the offshore jurisdiction. This structural question should be addressed during the asset-identification phase, not after an award is in hand.

For further guidance on enforcement against offshore holding structures, see our related analysis on post-award asset tracing in the Cayman Islands.

What do foreign counsel commonly get wrong?

The cross-boundary freezing position exposes several recurring errors. Identifying them is the first step to avoiding them.

The first error is treating the Mainland and Hong Kong as a single system. They are not. The two jurisdictions operate distinct procedural regimes, with different evidentiary standards, different application forms, and different institutional actors. An application that would succeed in Hong Kong on a without-notice basis may require different framing in a Mainland court. Counsel acting only in one system routinely misread the requirements of the other.

The second error is delay. The Interim Measures Arrangement allows applications before an award, but the practical value of a freeze depends on speed. A respondent who is aware that proceedings have commenced has time to move assets. The application to the Mainland court should be considered at the moment the decision is made to commence arbitration – not after the first round of submissions.

The third error is asset-identification failure. A vague or overbroad description of the assets to be frozen gives the Mainland court no workable basis for the order. The application must identify specific assets: bank accounts with the relevant bank and branch details, property with title references, equity interests with the relevant corporate registry information. Asset-tracing work that is left to a later stage frequently produces applications that are either refused or granted in a form too narrow to be effective.

The fourth error is failing to consider the holding structure. Many Mainland operating companies are held through offshore vehicles – BVI or Cayman holding companies – above which a Hong Kong entity may sit. A freeze of the Mainland operating company's assets may leave the offshore holding layer untouched. A freeze of the offshore holding company's shares in the Mainland entity may be more effective but requires separate proceedings in the relevant offshore jurisdiction. Understanding the structure before filing determines which assets are actually reachable.

Consider the following pattern, which is common in our cross-border practice: an international trading group with a contract dispute against a Mainland counterparty commenced HKIAC arbitration in autumn 2024. The counterparty had disclosed Mainland-registered real estate in earlier transaction documents. Counsel applied to the relevant Mainland people's court for an interim measure at the point of commencing the arbitration, with specific identification of the registered properties. The order was granted within the court's standard processing window. By the time the respondent instructed local counsel to resist, the assets were already frozen. The enforcement position at the award stage was materially stronger than it would have been under a post-award application.

For further context on disputes involving cross-boundary joint-venture structures, our guide on shareholder and joint-venture disputes with a BVI partner addresses several overlapping considerations.

How does the Mainland–Hong Kong legal interface affect practical timing?

The two systems do not move at the same speed, and that asymmetry is a practical factor in every cross-boundary freezing matter.

Hong Kong courts operate on a common-law procedural model with established timelines for interim applications. The Court of First Instance has the jurisdiction and the institutional experience to deal with freezing orders in commercial matters efficiently. Emergency procedures exist for urgent relief. The Hong Kong court can also grant an injunction in aid of foreign arbitration or foreign proceedings in appropriate circumstances.

Mainland people's courts operate under a different procedural model. The timeline for processing a Mainland interim measure application under the 2019 Arrangement is subject to the procedures of the receiving court. In practice, the timeline varies by court and by the complexity of the application. This is a factor to account for in the overall case timetable. Where a pre-award freeze is being sought, the application should be lodged as early as possible to create the maximum window before any award is issued.

The sequencing of the Mainland court application against the Hong Kong arbitration timetable requires active coordination. If an emergency arbitrator has been appointed in Hong Kong – targeting completion within 14 days of file transmission under the 2024 HKIAC Rules – and a Mainland court application is simultaneously in process, the two threads must be managed together. Decisions made in the Hong Kong emergency arbitration may affect the framing of the Mainland court application, and vice versa.

Our desk regularly acts on matters where the sequencing of the Mainland application against the Hong Kong timetable is itself the central tactical question. Getting this wrong by a matter of weeks can foreclose options that would otherwise have been available.

Decision checklist: mapping the route before you file

Before any application is made, a cross-boundary asset-freeze strategy should address each of the following questions. The answers determine the instrument, the forum, and the sequence.

Is the arbitration seated in Hong Kong and administered by a designated institution? If not, the Interim Measures Arrangement does not apply and the pre-award Mainland freeze route is not available. Separate Mainland litigation may be necessary.
Have the target assets been identified with sufficient specificity? Bank accounts, registered property, and equity interests each require different identification information. Vague descriptions will not support a workable application.
Where in the holding structure do the assets sit? Mainland operating level, Hong Kong holding level, offshore vehicle, or a combination? Each layer requires a different enforcement or freezing approach, and potentially proceedings in different jurisdictions.
Is the objective pre-award prevention or post-award enforcement? The answer determines whether the Interim Measures Arrangement, the arbitral-award enforcement regime, or Cap. 645 (for court judgments) is engaged.
Has the respondent been alerted to the dispute? If the counterparty is aware that proceedings are imminent, the window for a without-notice application narrows. Speed becomes more critical the earlier the respondent is likely to take defensive action.
Are assets distributed across both sides of the boundary? If so, the 2021 amendment permitting simultaneous enforcement applications in Hong Kong and the Mainland may be relevant. Coordination of the two applications from the outset reduces the risk of divergent outcomes.
What security may be required? Mainland courts typically require the applicant to provide security against the risk of a wrongful freeze. The amount is court-determined on the facts. Budget and approval from the relevant principal should be obtained before filing.
Is there an offshore layer that requires separate action? Where a BVI or Cayman holding vehicle sits above the Mainland assets, offshore proceedings may be necessary in parallel. This requires co-ordination with allied counsel admitted in the relevant jurisdiction.

The sequence above describes the standard position. Your matter turns on the specific documents, the jurisdictions actually engaged, and the order in which each step is taken – which is where the enforcement route is won or lost.

To discuss how the Interim Measures Arrangement or the reciprocal enforcement regime applies to your cross-border position, contact info@lockhartyip.com.

Our full practice overview on cross-border disputes and arbitration sets out the range of matters we handle across Greater China and the principal offshore centres.

What if an earlier attempt has already stalled?

Not every cross-boundary freezing matter begins at the starting line. In our cross-border practice, a proportion of the mandates we receive involve matters where a first attempt – whether a Mainland court application, a Hong Kong injunction, or a post-award registration – has produced an adverse result or stalled without an order.

The reasons for stalled applications vary. The most common are: insufficient asset identification; a technical deficiency in the arbitration agreement or the seat designation; a failure to provide security in the amount the Mainland court required; or an application that arrived after the counterparty had already transferred the relevant assets. Each of these is, in principle, remediable – but the remediation strategy depends on a precise read of what happened and what remains open.

A second read of a stalled position should address: whether the underlying arbitration agreement still supports a further application; whether assets remain in place or whether new assets have come to light; whether the limitation period for any fresh application has begun to run; and whether the Cap. 645 registration route for any court judgment component remains available.

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. Write to us at info@lockhartyip.com to discuss the position.

Related practices

Disputes & Arbitration – cross-border enforcement, arbitration, and Mainland–HK recognition matters
Holding Structures – offshore vehicle design and the enforcement implications of structure

Frequently asked questions

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

A Hong Kong-based international adviser is required to engage the Interim Measures Arrangement and to manage the Hong Kong-seated arbitration that underpins a pre-award Mainland freeze. The Mainland court application is made by counsel admitted in the relevant Mainland jurisdiction, typically coordinated from Hong Kong. Post-award, the Cap. 645 registration process in Hong Kong also requires input from advisers who understand both the Hong Kong procedural requirements and the Mainland judgment documentation that must accompany the application. For cross-boundary asset preservation, a single-jurisdiction adviser cannot address the full route.

What are the main risks in freezing assets across the Hong Kong-Mainland boundary?

The principal risks are timing, asset-identification failure, and structural mismatch. A delayed application allows a counterparty to move assets before an order is in place. An imprecise asset description produces orders that are too narrow to be effective. A structural mismatch occurs where the freeze targets the operating company but the economically significant assets are held in an offshore layer that requires separate proceedings. Security requirements in Mainland courts add a further practical risk: if approval for the required security amount is not obtained in advance, the application cannot proceed promptly.

Which jurisdiction's law applies to freezing assets across the Hong Kong-Mainland boundary?

The law of the forum governs the procedural requirements for each application. A Hong Kong court applies the Arbitration Ordinance (Cap. 609) and its own procedural rules. A Mainland people's court applies Mainland civil procedure. The substantive rights being preserved – arising from the contract or the arbitration agreement – are governed by the law chosen by the parties, which may be neither Hong Kong nor Mainland law. Both systems must be engaged in sequence; the question of which law governs the underlying merits is analytically separate from the procedural question of how each court processes the interim measure or enforcement application.

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

How to approach freezing assets across the Hong Kong-Mainland boundary