We are an independent construction law firm specialised in construction and engineering law. Our team of experienced lawyers has a proven track record in representing a diverse range of clients in the construction industry, including one of the earliest adjudication matters. We have successfully conducted adjudications for projects involving government infrastructure, logistic centre and buildings for special use and pedestrian links. We have represented both contractors and employers to bring and defend claims.
Security of Payment legislation has taken many years to come to Hong Kong. As a result, a very significantly different local version has been developed to the point where it would be fair to say that it bears little relation to the 28-day quick fire ‘smash and grab’ style adjudication systems in use in overseas jurisdictions.
Let Us Help You Navigate Adjudication
With the CISOPO’s implementation, it is necessary to ensure your business is ready. Whether you need guidance on the adjudication process or strategic advice on compliance, our team is here to help.
We have been at the forefront of monitoring the development of the security of payment legislation in Hong Kong. Through our website and other platforms, we regularly publish insights and updates on adjudication and related legislation, keeping our clients informed and prepared. We also help revise sub-contracts and contracts for clients to help them prepare for the roll out of adjudication on 28 August 2025.
Since 2021, we have been actively sharing our knowledge and insights on adjudication and security of payment legislation through presentations and seminars. We have delivered sessions to industry bodies, such as:
- Hong Kong Institute of Surveyors (HKIS),
- Hong Kong Institute of Construction Managers (HKICM),
- Chartered Institution of Civil Engineering Surveyors (Hong Kong Region) (ICES(HK)),
- Hong Kong Registered Contractors Association (HKRCA), and
- Various private clients including contractors, consultants and etc.
Interesting Points
The Construction Industry Security of Payment Ordinance (“Ordinance”) has been gazetted on 27 December 2024.
On 10 February 2025, the Development Bureau published various model adjudication documents:
- DEVB’s model adjudication rules
- DEVB’s model practice note on jurisdiction of adjudicators
- DEVB’s model practice note on case management
- DEVB’s model practice note on writing of determination
- DEVB’s model practice note on adjudicator’s fees, expenses and costs of proceedings
- DEVB’s model code of conducts for adjudicators
- Application Form for Admission to the Register
- Guidance Notes for Application for Admission to the Register
The above documents can be accessed at DEVB – Application for Admission to the Register of Adjudicator Nominating Bodies under the Construction Industry Security of Payment Ordinance (Cap. 652) (2436).
The Development Bureau (DEVB) issued Technical Circular (Works) No. 6/2021 to incorporate mandatory SOP conditions into all new public works contracts and sub-contracts from 28 August, 2025.
Frequently Asked Questions
What is adjudication?
Adjudication is a binding, fast, and cost-effective alternative dispute resolution method. It serves as an efficient way to resolve payment disputes which can replace arbitration and court proceedings.
What is the difference between adjudication and other dispute resolution methods?
Adjudication is generally quicker and more cost-efficient than arbitration and litigation. It can proceed with or without a formal hearing, and adjudicators are not bound by strict rules of evidence, making the process more flexible.
Is adjudication compulsory?
Under Hong Kong’s Construction Industry Security of Payment Ordinance (Cap. 652) (CISOPO), if a payment dispute arises, a party claiming a progress payment has the right to initiate adjudication proceedings. In this case, the adjudication process will proceed irrespective of whether the respondent chooses to participate or not. The adjudicator’s decision is binding and enforceable as if it were a court judgment.
Would it be more beneficial for contractors or subcontractors?
The adjudication mechanism under CISOPO primarily benefits parties entitled to progress payments, such as subcontractors. They can adjudicate claims against higher-tier subcontractors, main contractors, or employers. However, main contractors may face multiple adjudication claims simultaneously from various subcontractors, which may be less advantageous for them.
How is adjudication in Hong Kong different from other jurisdictions like the United Kingdom (UK)?
Hong Kong’s CISOPO minimises opportunities for ambush tactics, which are more common in jurisdictions like the UK. For example, parties cannot introduce new evidence late in the proceedings, and adjudicators must disregard such evidence.
Additionally, Hong Kong does not allow “smash and grab” adjudication, a practice seen in the UK where a paying party’s failure to issue a pay less notice results in the claimant receiving the full claimed amount. Under CISOPO, if a paying party fails to serve a payment response, they are deemed to dispute the entire claim, preventing “smash and grab” scenarios.
Who bears the cost of adjudication?
The adjudicator decides the cost allocation in their determination. This includes the adjudicator’s fees and any charges arising from the Adjudicator Nominating Body.
What are the advantages and disadvantages of adjudication in construction?
Adjudication offers significant benefits, particularly for subcontractors, as it provides a speedy and cost-effective way to resolve payment disputes and maintain cash flow. It is especially useful in the construction industry, where timely resolution of disputes is critical.
However, main contractors and employers may face challenges. They could be subject to multiple adjudication claims at once, creating operational and financial pressures. Additionally, under CISOPO, claiming parties have the right to suspend work or supply if an adjudicator’s determination is not complied with — a risk that main contractors and employers must carefully manage.
The strict timelines under CISOPO can also limit parties’ ability to prepare adequately. To address this, early preparation and seeking professional legal advice are essential.
When is it best to use adjudication? And when is it not appropriate to use adjudication?
Adjudication under CISOPO is specifically designed for resolving payment disputes in the construction industry. It is not suitable for determining time-related disputes, such as extensions of time entitlements. However, adjudicators can decide on amounts payable under an agreed extension of time if it relates to a payment dispute.
Who are the Adjudicator Nominating Bodies and what are their powers?
Adjudicator Nominating Bodies (“ANBs”) are registered entities responsible for appointing adjudicators to resolve payment disputes under the CISOPO. Their responsibilities include:
- Providing adjudication rules, practice notes, codes of conduct, and fee schedules;
- Training adjudicators and maintaining a panel of qualified adjudicators;
- Nominating or appointing adjudicators and addressing conflicts of interest; and
- Ensuring the confidentiality of adjudication proceedings.
ANBs play a significant role in facilitating fair and efficient adjudication processes.
Can I appeal if I lose adjudication?
Adjudication determinations are binding but can be set aside in court under specific circumstances. These include:
- A material denial of natural justice;
- Evidence of bribery, fraud, or a conflict of interest involving the adjudicator; or
- The adjudicator acting beyond their jurisdiction.
Additionally, the CISOPO allows parties to pursue the same payment dispute in other court or dispute resolution proceedings, even during the adjudication.
Key Contact
Our Experience
Advising our clients on the amendments they will need to make to their standard forms of contract
Advise an international contractor in one of the first contractual adjudications in Hong Kong
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