INTERNATIONAL ARBITRATION 1/3LY
HONG KONG
HONG KONG IS A POPULAR ARBITRATION SEAT, WITH 234 NEW INTERNATIONAL ARBITRATIONS BEING COMMENCED AT THE HKIAC IN 2014. ACCORDING TO HKIAC’S 2013 ANNUAL REPORT, CHINESE PARTIES REMAIN THE MOST NUMEROUS, WITH SOME 62.5% OF THE ARBITRATIONS INVOLVING A CHINESE PARTY. TO THAT EXTENT, AT LEAST, HONG KONG MAY BE SEEN BY CHINESE PARTIES, AND CERTAINLY THEIR FOREIGN COUNTERPARTIES, AS A GOOD COMPROMISE SEAT AWAY FROM MAINLAND CHINA. OTHER FAR EASTERN COUNTRIES SUCH AS TAIWAN, SINGAPORE, SOUTH KOREA, JAPAN AND THE PHILIPPINES ALSO FEATURE FREQUENTLY AS HKIAC USERS. In terms of formal legal infrastructure, Hong Kong has the benefit of a well-regarded judiciary and court system – based on the English common law – which is supportive of arbitration. The Hong Kong Arbitration Ordinance (HKAO) is a sophisticated piece of arbitration legislation, largely based on the UNCITRAL Model Law, and was most recently revised in 2013 to implement changes such as new provisions allowing Hong Kong courts to enforce relief granted by an emergency arbitrator. Under the HKAO, the Hong Kong Courts have the power to issue interim orders in support of arbitration.
Hong Kong also scores well in terms of convenience and general infrastructure. It is well placed geographically, with good transport links, and offers parties familiarity with the Chinese language and culture, with many multilingual practitioners based in Hong Kong and bilingual arbitrations not uncommon. In what many considered a response to Singapore’s foundation of Maxwell Chambers in 2009, HKIAC undertook a major refurbishment program in 2012. Ease of enforcement against assets in China is no doubt also a factor influencing Hong Kong as a choice of seat. Like the Chinese institutions though, HKIAC’s latest data shows a drop in new arbitrations since the late 2000s with 2013 seeing the lowest number of cases accepted in 14 years of statistics. One reason for this may be that parties from outside China, particularly those from Europe and the US, sometimes view Hong Kong as an arbitral seat within China and, therefore, not a “neutral” venue for an arbitration against a Chinese party. Another reason for the fall in cases may simply be the relative success of Singapore as a venue for international arbitration in the region. To continue to compete, Hong Kong will need to consistently market itself as an attractive seat for arbitrations against Chinese parties, and to distinguish itself from Mainland China as an arbitral seat by emphasising its common law heritage and world-class arbitration infrastructure.
EASE OF ENFORCEMENT AGAINST ASSETS IN CHINA IS NO DOUBT ALSO A FACTOR INFLUENCING HONG KONG AS A CHOICE OF SEAT.
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