The final stage for implementation of security of payment (SOP) legislation in Hong Kong is now underway. The Construction Industry Security of Payment Ordinance—Ordinance No. 35 of 2024 (Ord. No. 35 of 2024) (SOP Ordinance) was gazetted today 27 December 2024.
The Ordinance will:
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- facilitate the recovery of payments under construction contracts to provide a mechanism for the speedy resolution of payment disputes under certain construction contracts through adjudication proceedings;
- give a right to a party to a construction contract, under certain circumstances, to suspend or reduce the rate of progress of the construction work or the supply of related goods and services under the contract; and,
- provide for related matters.
The substantive provisions of the SOP Ordinance will come into operation after 8 months, on 28 August 2025, as reported by the Government (here).
The final SOP Ordinance differs slightly from the SOP legislation gazetted earlier (available here) with amendments to three key areas on:
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- setting aside and enforcement of determinations
- an adjudicator’s powers to bar new legal representatives; and,
- contracts with telecommunications service providers are now subject to the SOP regime.
Other amendments were also introduced to the language of the final legislation to clarify the legislative intent. The text of the ordinance is here Construction Industry Security of Payment Ordinance—Ordinance No. 35 of 2024
For our earlier commentary about the SOP legislation, please see our articles here and here. Further detailed analysis of the SOP Ordinance will also be published on kwm.com shortly.
King & Wood Mallesons has extensive experience in dealing with SOP regimes in many jurisdictions and can guide you through the technical and legal minefield to ensure you receive the best possible outcome. We would be happy to discuss the adjudication process, preparatory work required to get ready for this new regime, and what support we can offer to your organisation.
