Freezing assets across the Hong Kong-Mainland

A creditor who has won an award or judgment against a counterparty with assets on both sides of the Hong Kong-Mainland boundary faces a precise sequencing problem. The relief is available. The governing instruments exist. But the window to act is short, and a step taken in the wrong order – or in the wrong court – can foreclose the route that actually leads to the money.

Freezing assets across the Hong Kong-Mainland boundary is a two-system exercise governed by the Arbitration Ordinance (Cap. 609), the interim-measures Arrangement between the Mainland and Hong Kong in effect since 1 October 2019, and the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) in force from 29 January 2024. The route runs through Hong Kong as the forum hub, but execution lands in the Mainland courts – and the sequencing of those steps determines whether the assets are preserved when enforcement comes.

This note sets out the service we run, the decisions a client must own at each stage, and the point at which locally licensed Hong Kong counsel join the process.

When does a foreign principal actually need this?

The immediate trigger is almost always a deteriorating counterparty situation: payments missed, assets being moved, a restructuring announced, or – most urgently – information that a Mainland debtor is transferring property offshore or to connected parties. At that point, the question is not whether to act but how quickly the first step can reach a court.

Foreign principals come to this situation along several routes. An Asian or European group with a long-running commercial relationship in the Mainland discovers that its counterparty has shifted key assets to a holding entity in a different province or across the boundary into Hong Kong. A creditor holding an HKIAC award is concerned that the debtor's Hong Kong-side assets will disappear before it can complete registration. A fund with portfolio exposure to a Greater China operating group needs to preserve the value of a guarantee before the guarantor's balance sheet changes further.

In each scenario, the asset endgame is what matters. An award or judgment that cannot be enforced where the assets sit is a piece of paper. Our practice is built around closing that gap – before the assets move, not after.

The trigger for urgency is the window_closing reality of asset dissipation. Once a debtor has transferred property to a connected entity, or once a bank account has been swept, the practical options narrow sharply. The question our desk hears most often is: "We have an award – is it too late?" In many cases it is not, but the answer depends entirely on what has happened since the award was issued and which assets remain reachable.

What is the governing architecture for cross-border freezing relief?

Three instruments together define the legal architecture for freezing assets across the boundary, and each carries distinct conditions and court procedures that must be handled in the correct sequence.

The Arbitration Ordinance (Cap. 609) gives the Hong Kong courts jurisdiction to grant interim measures – including Mareva injunctions (freezing orders preventing a respondent from disposing of assets) – in support of both Hong Kong-seated and, in certain circumstances, foreign-seated arbitration proceedings. The Ordinance is modelled on the UNCITRAL Model Law, and the Court of First Instance is the correct forum for applications at the Hong Kong end.

The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the HKSAR, in force since 1 October 2019, created a direct route for parties to HKIAC-seated (and other designated-institution) arbitrations to apply to Mainland courts for cáichan bǎoquán (property preservation orders, the Mainland equivalent of a freezing order) before the award is made. This is the mechanism that makes Hong Kong's seat genuinely powerful in cross-border disputes: it allows a party to act in the Mainland courts while the arbitration is still on foot, without waiting for a final award.

For post-award enforcement, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), in force from 29 January 2024, applies to monetary and certain non-monetary judgments. Separately, the 1999 Arrangement and the 2020 Supplemental Arrangement govern reciprocal enforcement of arbitral awards, with simultaneous applications to both courts permitted since the 2021 amendment.

What this architecture means in practice is that the same assets may be addressable from Hong Kong or from the Mainland, depending on where they are physically located and what stage the proceedings have reached. Choosing the right route – and initiating it in the right sequence – is the analytical task at the centre of this service.

For a structured assessment of your cross-border freezing or enforcement position, write to us at info@lockhartyip.com. We will map the available routes, identify the sequencing risks, and tell you what is still open.

How does the cross-border element change the analysis?

A single-jurisdiction freezing application is a procedural matter. A cross-boundary application is a strategic decision, because the choice of forum affects every subsequent enforcement step and the relative speed of each court system.

The first analytical question is always: where are the assets? Hong Kong bank accounts, shares in Hong Kong-incorporated companies, and Hong Kong real property are within the reach of the Court of First Instance under the Arbitration Ordinance. Mainland bank accounts, Mainland real property, and interests in Mainland entities require an application to the relevant Mainland people's court – either under the 2019 interim-measures Arrangement (where arbitration is still on foot) or under the post-award reciprocal enforcement mechanisms.

The second question is timing. Mainland property-preservation applications brought under the 2019 Arrangement can be filed before an award issues. That is a significant difference from many other international jurisdictions, where post-award applications are the primary route. For a creditor who has reason to believe assets will be moved before the tribunal has finalised its decision, the Arrangement opens a window that would otherwise be closed.

The third question is the interface between the two systems. A freezing order from the Court of First Instance does not automatically operate in the Mainland, and a Mainland preservation order does not automatically bind Hong Kong-side assets. Each side requires its own application, its own supporting documents, and coordination with counsel admitted to practice in the relevant jurisdiction. Where assets sit on both sides, parallel applications running in a coordinated sequence are often the only complete solution.

A fourth consideration arises where the debtor holds assets through a BVI or Cayman holding entity that in turn holds Hong Kong or Mainland operating assets. In that configuration, the freezing strategy must address not only the shares in the holding entity but also whether the operating-company assets are reachable through the structure. We have seen offshore-entity layers used in practice to add delay even where the underlying assets remain in the Mainland. The structuring question and the enforcement question are the same question.

What is the step-by-step route we run?

Our process at Lockhart & Yip runs in five stages, each with a defined decision point for the client and a defined handoff to locally licensed Hong Kong counsel or allied Mainland-side lawyers where their admission is required.

Stage 1: asset mapping and route selection. Before any court application is prepared, we map the available assets across jurisdictions. This means reviewing the counterparty's known property, reviewing the corporate structure of the debtor group, and assessing which enforcement routes are open given the stage of the proceedings. The output is a route memorandum: which forum, which instrument, which documents are needed, and in what order the applications should be made. The client owns this decision.

Stage 2: Hong Kong-side application preparation. Where Hong Kong assets or the Hong Kong seat are engaged, we prepare the application materials for the Court of First Instance. We coordinate at this stage with locally licensed Hong Kong firms with whom we work, who handle the court filing and appearances. Our role is to provide the international and cross-border analysis, draft the supporting memoranda, and manage the coordination across the two sides. No single filing is made without the full picture of what is happening on the other side of the boundary.

Stage 3: Mainland-side coordination. Where a property-preservation application is to be made to a Mainland people's court under the 2019 Arrangement, we coordinate with allied counsel admitted in the relevant Mainland jurisdiction. The application must be made through the correct procedural channel and must satisfy the conditions of the Arrangement, including confirmation that the arbitration is on foot at a designated institution. We prepare the cross-border analysis and the strategic brief; local execution is handled by admitted Mainland counsel.

Stage 4: monitoring and maintenance. A freezing order or preservation order is not the end of the process. It must be maintained, the debtor will often apply to vary or discharge it, and the client must be ready to respond. We manage the ongoing strategy, advise on any offer of security in substitution, and coordinate the response to any challenge. The client's decision at this stage is whether to accept substituted security or hold the position pending the award or judgment.

Stage 5: enforcement proper. Once the award or judgment is final, the preservation order becomes the foundation for enforcement under the reciprocal mechanisms. Where the award is from an HKIAC or other eligible institution, the 1999 Arrangement and the 2020 Supplemental Arrangement govern the Mainland-side enforcement application. Where it is a judgment, Cap. 645 provides the registration route at the Court of First Instance, and the corresponding Mainland mechanism applies on the other side. Simultaneous applications, where the 2021 amendment permits them, are the most time-efficient approach.

One micro-scenario illustrates the sequencing risk: a European commercial group holding an HKIAC award against a Mainland manufacturing counterparty came to us in autumn 2024 after a first enforcement attempt stalled at the Mainland court. On review, the problem was that the property-preservation step had been initiated after the award issued, by which point the counterparty had already transferred its most liquid assets to a connected entity in another province. We retraced the asset trail, identified remaining fixed-property assets in the original province, and coordinated a fresh registration application under the post-award reciprocal mechanism. The matter moved within one enforcement cycle. The lesson is that the sequence matters more than the strength of the underlying award.

If an earlier enforcement attempt has stalled or produced an adverse result, a second read of the route and the remaining asset picture can identify what is still open. Write to info@lockhartyip.com with the background.

What documents and decisions does the client own?

The question of client-side responsibility is one that foreign principals sometimes underestimate. A cross-boundary freezing application moves quickly when the paperwork is ready and slowly when it is not. The delays we see most often are caused not by the court system but by the client's inability to produce the required materials on a short timeline.

The core documents that the client must be prepared to produce are the following. First, the arbitration agreement or the clause giving rise to the proceedings – without this, neither the Hong Kong seat nor the Mainland application under the 2019 Arrangement can be confirmed. Second, evidence of the assets: bank records, corporate filings, property registrations, or commercial intelligence sufficient to identify the property to be frozen. Third, where the application is on notice, instructions on the level of undertaking the client is prepared to give to the court as to damages – the cross-undertaking in damages (the undertaking by the applicant to compensate the respondent if the order is ultimately discharged) is a standard requirement and must be adequately supported. Fourth, the underlying claim documents: the written arbitration, the award (if issued), or the judgment certificate required under Cap. 645.

The client also owns the strategic decisions that arise during the process. Whether to make a without-notice (ex parte) application or a without-delay on-notice application, whether to accept substituted security, whether to pursue parallel applications simultaneously or sequentially – these are strategic calls that carry risk on both sides, and they must be made by the principal with the full picture in front of them. We provide the analysis and the recommendation; the decision is the client's.

A second micro-scenario: a CIS-based fund with a guarantee claim against a Hong Kong-listed group's Mainland subsidiary approached us at the point of a threatened restructuring (early 2025). The fund had the underlying documents but had not yet secured a seat for its arbitration. We advised on an HKIAC clause, coordinated filing, and within the same week prepared the preliminary materials for a property-preservation application under the 2019 Arrangement. The speed of the first step depended entirely on the fund's ability to produce the guarantee documentation on short notice. It did. The preservation application was made before any restructuring step was announced.

What do foreign principals most often get wrong?

The most common error is treating the Hong Kong-Mainland boundary as a domestic enforcement problem. It is not. Each side has its own procedural rules, its own court hierarchy, and its own conditions for granting and maintaining interim relief. A strategy built around the Hong Kong courts alone will not reach Mainland assets. A strategy built around the Mainland courts alone may miss the more flexible interim-relief procedures available in Hong Kong.

The second most common error is waiting for the award. The 2019 interim-measures Arrangement exists precisely because waiting for the award is often too late. If assets are likely to move before the tribunal is ready to issue, the pre-award property-preservation route through the Mainland courts is the only complete solution, and it requires the arbitration to be on foot at a designated institution. The seat and institution choice made at the contract stage determines whether this route is available at all. Counsel on our desk regularly see cases where the governing contract was drafted with an ad hoc or non-designated-institution clause, which forecloses the Arrangement route entirely.

The third error is underestimating the importance of the corporate structure above the Mainland operating entity. Where the debtor's valuable assets are held through a BVI or Cayman intermediate holding company, the enforcement route to those assets runs through the offshore registry as well as through the Mainland. A freezing order that does not address the shares in the offshore holding entity may leave the operating assets reachable only through a longer and more uncertain route. We address the structure and the enforcement together.

A related myth worth addressing directly: that Hong Kong courts will not assist with Mainland enforcement, or that Mainland courts will not give effect to Hong Kong arbitration outcomes. Both are incorrect as a matter of the current legal position. The 2019 Arrangement and the post-award reciprocal mechanisms were created specifically to address the boundary, and our experience before the Court of First Instance and in coordinating Mainland-side applications indicates that the courts on both sides have been applying the mechanisms as designed. The enforcement route is real. The question is whether the specific facts of a given case satisfy the conditions.

Decision matrix: which route, which court, which timing?

The right route depends on three variables: the stage of the proceedings at the moment the client needs to act, the location of the assets, and the institutional seat of the arbitration (or the nature of the judgment).

Where arbitration is on foot at a designated institution and assets are in the Mainland, the route is a property-preservation application to the relevant Mainland people's court under the 2019 interim-measures Arrangement – initiated as early as the day the arbitration is filed, with no requirement to wait for the award. This is the fastest route and the one most likely to catch assets before they move. The risk is the cross-undertaking in damages: the applicant must be prepared to stand behind the order if the claim ultimately fails.

Where the assets are in Hong Kong and the arbitration is on foot anywhere, the route is a Mareva injunction application to the Court of First Instance under the Arbitration Ordinance. The court has wide jurisdiction in support of arbitration, including foreign-seated arbitration in appropriate cases. Timing is determined by the urgency of the asset-dissipation risk.

Where the award has already issued from an HKIAC or other eligible institution, the route is simultaneous registration under the post-award reciprocal mechanism on the Mainland side and, where Hong Kong assets are also in scope, a separate application at the Court of First Instance. The 2021 amendment permitting simultaneous applications means the creditor does not have to choose between the two jurisdictions and can pursue both in parallel.

Where the matter is a court judgment rather than an award, and it is a Mainland civil or commercial judgment made on or after 29 January 2024, the route runs through registration under Cap. 645. The judgment must be effective and must fall within the scope of Cap. 645 (monetary or eligible non-monetary; not on the exclusion list). The registering creditor should verify the current procedural requirements with locally licensed Hong Kong counsel before filing.

Where assets sit at multiple levels – Hong Kong operating assets, Mainland subsidiary assets, and an offshore holding-entity layer – the correct approach is a coordinated multi-forum strategy addressing each level in sequence. The order matters: securing the top of the structure first prevents the debtor from using the offshore holding entity to move assets around the order.

Self-assessment checklist: is your cross-boundary position ready?

Before instructing counsel on a cross-boundary freezing or enforcement matter, a principal or in-house team should be able to answer the following questions. The answers determine which route is open and how fast the first step can move.

Does the governing contract contain an arbitration clause with a seat in Hong Kong at a designated institution, or has the HKIAC clause been separately agreed?
Is the arbitration currently on foot, or is it yet to be commenced?
Has the award or judgment issued, and if so, is it final and effective?
Where are the counterparty's assets – Hong Kong bank accounts, Mainland property, offshore holding-entity shares, or some combination?
Is there evidence that assets have been moved, transferred to connected parties, or are likely to be moved in the near term?
Are the core documents available at short notice: the arbitration agreement, the underlying commercial documents, the award or judgment if issued?
Is the client in a position to provide a cross-undertaking in damages to support a without-notice application?
Has any previous enforcement attempt been made, and if so, what was the outcome?

If the answer to any of these questions is uncertain, that uncertainty is itself the starting point for the engagement. In our cross-border practice, the most important call is the one made before the first court step, not after it.

For a preliminary read on your cross-boundary asset-preservation or enforcement position, write to us at info@lockhartyip.com. We will tell you what is open, what is closed, and where the sequencing risk lies.

Related practices

Disputes & Arbitration – international arbitration, enforcement, and cross-border dispute strategy
Drafting HKIAC arbitration clauses for UAE counterparties – seat selection and institutional clause design
Post-award asset tracing: UAE guide – tracing and recovering assets across the UAE and Hong Kong

Frequently asked questions

What is the first step in freezing assets across the Hong Kong-Mainland boundary?

The first step is mapping the assets and selecting the correct route before any court application is made. Where arbitration is already on foot at a designated institution and assets are in the Mainland, a property-preservation application to the relevant Mainland people's court under the interim-measures Arrangement in force since 1 October 2019 is ordinarily the fastest route. Where assets are in Hong Kong, a Mareva injunction application to the Court of First Instance is the correct first step. The two are not mutually exclusive: where assets sit on both sides, parallel or sequenced applications addressing each jurisdiction separately are often necessary to preserve the full asset picture.

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

Both jurisdictions' procedural law applies concurrently. Hong Kong interim-relief applications are governed by the Arbitration Ordinance (Cap. 609) and the procedural rules of the Court of First Instance. Mainland property-preservation applications are governed by Mainland civil-procedure law and the conditions of the relevant Arrangement or reciprocal mechanism. Neither system automatically binds the other. This is why each application must be prepared to the standards of the court where it is filed, with admitted counsel in each jurisdiction handling the filing and appearances. The cross-border strategy is the analytical layer that sits above both.

How does the cross-border element affect freezing assets across the Hong Kong-Mainland boundary?

The cross-border element creates both an opportunity and a sequencing risk that single-jurisdiction proceedings do not present. The opportunity is that the 2019 interim-measures Arrangement allows pre-award property-preservation applications in the Mainland for HKIAC-seated arbitrations, a route unavailable in most other international contexts. The sequencing risk is that a step taken in the wrong forum, at the wrong stage, or without coordinating the other side can foreclose the most direct route to the assets. In our cross-border practice, the choice of seat and institution at the contract stage often determines whether the full cross-boundary enforcement toolkit is available when a dispute arises.

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

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