Arbitration is founded on the finality of arbitral awards and the obligation of parties to honour the outcome of the arbitral process. However, the effectiveness of an award may be undermined where a party, dissatisfied with the enforcement process in one jurisdiction, commences proceedings elsewhere to challenge or frustrate that enforcement. In such circumstances, courts may intervene through an anti-suit injunction to protect their jurisdiction and prevent the misuse of foreign proceedings.
This issue arose in 廈門新景地集團有限公司 v Eton Properties Ltd and Eton Properties (Holdings) Ltd [2026] HKCFI 5258, where the Hong Kong Court of First Instance restrained two Hong Kong companies from pursuing proceedings before the Xiamen courts in mainland China.
The dispute arose from a 2003 agreement concerning the development of land in Xiamen and the transfer of certain shares to Xiamen Xinjingdi Group Co Ltd. Following a dispute, a CIETAC tribunal issued an award in 2006 directing the Eton entities to perform their obligations. After almost two decades of litigation, corporate restructuring within the Eton group frustrated statutory enforcement of the award in Hong Kong. Xinjingdi therefore pursued a common law enforcement action and, in 2024, obtained judgments for damages and pre-judgment interest of approximately RMB343 million.
The Eton entities subsequently commenced proceedings before the Xiamen courts, seeking, among other relief, the return of sums they alleged had been unlawfully obtained through the Hong Kong enforcement proceedings. They argued that the common law action was, in substance, an attempt to enforce the underlying contract, and had been brought maliciously to circumvent the arbitration agreement and PRC law.
Xinjingdi consequently applied for an anti-suit injunction.
The court granted the injunction. A central part of its reasoning was the distinction between enforcement of the underlying contract and enforcement of the arbitral award. The common law action was concerned with enforcing the award, not the underlying contract, and Xinjingdi was entitled to pursue that remedy under Hong Kong law after statutory enforcement had been frustrated.
The court further found that the Xiamen proceedings were commenced and pursued in bad faith and constituted a vexatious and oppressive attempt to interfere with, undermine and frustrate the Hong Kong enforcement process. The proceedings also sought to relitigate issues which had already been determined by the Hong Kong courts, including the nature of Xinjingdi’s common law enforcement action. The court therefore found issue estoppel applicable.
Accordingly, the Eton entities were ordered to discontinue the Xiamen proceedings, and costs were awarded against them on the indemnity basis.
The decision demonstrates that the court’s role in supporting arbitration does not necessarily end with the issuance of an award.
Where a party uses foreign proceedings to undermine the enforcement of an award or to reopen matters already determined, an anti-suit injunction may be available to protect the integrity of the enforcement process.