Arbitration or Litigation? Navigating Disputes in Hong Kong’s Legal System
- Kristina Coluccia
- 6 days ago
- 3 min read
When doing business in Hong Kong—or through it—having a clear dispute resolution strategy is essential. Whether conflicts arise from contracts, employment, intellectual property, or cross-border trade, understanding your options under Hong Kong’s legal system can make all the difference in cost, time, and outcome.
In 2025, Hong Kong continues to offer businesses two trusted, well-established pathways for resolving disputes: litigation through the courts, and arbitration, often used for cross-border commercial cases. Choosing the right approach depends on the nature of your business, your partners, and how you prefer to manage risk.
Litigation: A Transparent, Common Law System
Hong Kong’s legal system is rooted in English common law, with an independent judiciary and a split legal profession comprising solicitors and barristers. This system ensures predictability, impartiality, and legal clarity—especially for international businesses accustomed to similar frameworks.
Key benefits of litigation in Hong Kong:
Independent and internationally respected courts, including a Court of Final Appeal with judges from other common law jurisdictions.
Open justice: Most proceedings and judgments are publicly available, enhancing transparency.
Binding precedents: Courts apply prior rulings, helping ensure consistency in legal interpretation.
Broad jurisdiction: Both private and public law disputes can be addressed, including judicial reviews of government action.
For most civil matters, the principle of “loser pays” applies, with the prevailing party typically recovering a portion of their legal costs.
Arbitration: Preferred for International Commercial Disputes
Hong Kong is widely recognized as one of the top global arbitration hubs, frequently ranked alongside London and Singapore. The city has a dedicated Arbitration Ordinance aligned with the UNCITRAL Model Law, making it particularly attractive for resolving cross-border commercial disputes.
Key benefits of arbitration in Hong Kong:
Neutrality and confidentiality – Unlike court proceedings, arbitration hearings are private.
Enforceability – Arbitral awards are enforceable in over 170 jurisdictions under the New York Convention.
Party autonomy – You can choose the governing law, arbitrators, seat, and procedural rules.
Supportive legal framework – Hong Kong courts actively support arbitration but rarely interfere.
Notably, Hong Kong offers unique judicial cooperation with Mainland China, allowing parties in Hong Kong-seated arbitrations to apply for interim relief from Chinese courts—a strategic advantage not available in other jurisdictions.
The Hong Kong International Arbitration Centre (HKIAC) is one of the world’s leading institutions, offering flexible and sophisticated arbitration rules and administration.
Which Should You Choose?
Litigation | Arbitration |
Public and transparent | Private and confidential |
Bound by legal precedent | Flexible and party-driven |
Enforceable locally | Enforceable globally |
Slower in complex commercial cases | Often faster in cross-border disputes |
Binding judgments | Final and binding awards (with limited appeal) |
Choose litigation if you require a precedent-setting judgment, are dealing with a local counterparty, or want the oversight of a formal court system.
Choose arbitration if your dispute is international, involves sensitive commercial data, or if enforceability in multiple jurisdictions is a priority.
Resolving Disputes with Confidence
Both litigation and arbitration are trusted, efficient, and respected options in Hong Kong’s legal landscape. The right choice depends on your business strategy, contractual relationships, and where your counterparties are located.
At Woodburn Accountants & Advisors, we support clients in mitigating legal risk through smart entity structuring, strong contract design, and trusted local partnerships. While we don’t litigate, we help you build businesses that are resilient—legally, operationally, and financially—in Hong Kong and across Greater China.
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.