HKIAC: ‘Hong Kong remains a neutral and effective seat of arbitration’

The Hong Kong International Arbitration Centre released a statement last week to reassure users that they “can remain confident that Hong Kong continues to be a neutral and effective seat of arbitration”, citing a number of reasons for doing so. A full text of the release can be read below:

Hong Kong has been the subject of much discussion over the last 12 months. Hong Kong has also long been favoured as one of the best seats for international arbitration. Users can remain confident that Hong Kong continues to be a neutral and effective seat of arbitration. Among other reasons:

1. The Hong Kong Arbitration Ordinance (Cap. 609) (“Arbitration Ordinance”), which is based on the UNCITRAL Model Law (2006), governs arbitrations seated in Hong Kong. It remains unchanged.
2. Arbitral tribunals determine the outcome of arbitrations. Arbitrators are appointed by the parties or an arbitral institution like HKIAC. In many cases, tribunals comprise three members, with the co-arbitrators appointed by the parties and the presiding arbitrator chosen by the co-arbitrators, parties or an institution chosen by the parties. Sole arbitrators are chosen by the institution, or by agreement of the parties. In the circumstances, there is no question that tribunals are neutral and independent. See e.g. 2018 HKIAC Administered Arbitration Rules, Article 8; UNCITRAL Model Law (2006), Article 11(3)(a), given effect to by the Arbitration Ordinance, section 24(1).
3. HKIAC’s decision-making bodies, such as its Council and Appointments and Proceedings Committees, are comprised of international and local dispute resolution and industry experts and subject to transparent governance structures. HKIAC is led by its Co-Chairs, David W. Rivkin (American, Partner, Debevoise & Plimpton) and Rimsky Yuen GBM, SC, JP (Chinese (Hong Kong), Senior Counsel, Temple Chambers), and Vice-Chairs, Nils Eliasson (Swedish, Partner, Shearman & Sterling), Joseph Wan (British/Chinese (Hong Kong), former CEO of Harvey Nichols), and Briana Young (British/American, Foreign Legal Consultant, Herbert Smith Freehills). The HKIAC Secretariat is headed by Sarah Grimmer (New Zealander, former Senior Legal Counsel, Permanent Court of Arbitration).
4. A specialist list of judges in the Hong Kong Court of First Instance deals with arbitration matters. That court and higher Hong Kong courts have a long record of neutral decision-making that is strongly supportive of the arbitration process. The significant body of case law interpreting the Arbitration Ordinance provides parties with predictability. For example, the courts have injuncted proceedings outside of Hong Kong, including on the Mainland, and have enforced arbitral awards against entities of various nationalities, including Hong Kong entities, Mainland Chinese entities (including Chinese state-owned enterprises), and foreign entities alike.
5. Hong Kong’s highest court, the Court of Final Appeal, is comprised of the Chief Justice, seven Hong Kong permanent and non-permanent judges (“NPJs”), and 15 overseas NPJs. The overseas NPJs are among the most eminent judges of other common law, commonwealth jurisdictions.

Hong Kong is also a uniquely important seat for cases that involve interests on the Mainland whether owned by Mainland Chinese or foreign entities. By virtue of the PRC-HK Interim Measures Arrangement 2019 (“Arrangement”), Hong Kong is the only legal venue outside of Mainland China where parties to arbitrations may obtain interim relief from Mainland Chinese courts in respect of assets, evidence and conduct on the Mainland. In less than a year since the Arrangement came into effect, HKIAC has processed 24 applications under the Arrangement and is aware of preservation orders in respect of at least RMB 7.7 billion (over USD 1 billion) worth of assets.

In 2019, HKIAC saw a record number of arbitration matters, over 80% of which were international. HKIAC also held 69 in-person hearings in central Hong Kong without disruption in the period June to December 2019.

Without denying the complexity and challenges of recent times in Hong Kong, users can remain confident in Hong Kong as a seat of arbitration.