The Doctrine of Penalties in Hong Kong: Court of Appeal Clarifies Test and Adopts a Modern Approach (July 2021)
Client Briefings
Introduction
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A recent decision of the Court of Appeal, Law Ting Pong, has confirmed that the test set out in Cavendish Square applies in Hong Kong.
This provides welcome certainty and brings Hong Kong in line with the position under English law. The Cavendish Square test is generally considered to be more commercial and practical than the Dunlop test that previously applied, which may benefit parties to complex commercial contracts in financing or M&A transactions.
