The implementation of the National Security Law for Hong Kong (NSL) and the overhaul of the electoral system of the Hong Kong Special Administrative Region have helped to restore peace and order and are facilitating stability and prosperity in the city, yet, they have been used as new “ammunition” for Western critics to attack the HKSAR’s legal system. For example, in September, the Fraser Institute of Canada claimed in its annual report that a “pronounced” decline had been seen in Hong Kong’s rule of law because of the implementation of the NSL.
Some critics have also raised doubts about Hong Kong’s status as a dispute resolution center in the Asia-Pacific region. For example, Dan Harris, a founding member of Seattle-based law firm Harris Bricken, has argued that Hong Kong is no longer a popular arbitration venue, claiming that many lawyers now view Hong Kong as a riskier arbitration venue than Singapore, New York, Geneva, Paris and London. But it would be self-deception for anyone to hastily jump to the conclusion that Hong Kong is no longer a popular arbitration venue.
Last year, the Hong Kong International Arbitration Center processed 344 cases valued at about $5.5 billion, while the Singapore International Arbitration Center handled 357 cases valued at $5.6 billion. Hong Kong was ranked the third-most preferred seat for arbitration worldwide, according to the 2021 International Arbitration Survey released by Queen Mary University of London. It is one thing to highlight the fact that some clients have switched their arbitration venue from Hong Kong to Singapore; it is another to make the groundless allegation that Hong Kong is no longer a safe place for arbitration. Hong Kong’s legal system remains sound. People are entitled to float their own opinions but not manufactured stories. Facts are always sacred.
Contrary to what the doomsayers claim, Hong Kong’s arbitration ecosystem has unique strengths. At the national level, the national 14th Five-Year Plan (2021-25) has designated Hong Kong as a center for international legal and dispute resolution services in the Asia-Pacific region. Locally, the HKSAR government has actively pursued the extension of “allowing Hong Kong-invested enterprises to adopt Hong Kong law” and “allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong” to the whole Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in 2024 from Qianhai in Shenzhen, and the pilot free trade zones on the Chinese mainland currently.
According to an expert, both Hong Kong and Singapore have established reputations in transparency and efficiency in dispute resolution, and the former has benefited from the easier availability of professionals. Hong Kong is among the first jurisdictions in the world to strengthen the powers of its courts to make orders for interim measures of protection to support arbitrations, and enforce such orders made by a foreign court or arbitral tribunal (Samuel Wong, Hong Kong Arbitration Ordinance 2011).
Other supportive measures include a special arrangement that enables easy enforcement of Hong Kong’s arbitration decisions on the mainland. Leveraging its unique advantages under the “one country, two systems” principle, Hong Kong has signed with the mainland the Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the courts of the mainland and the HKSAR. As a result of the arrangement, Hong Kong has become the only jurisdiction outside the mainland wherein, as a seat of arbitration, parties are able to apply to the mainland courts for interim measures. Singapore is lagging behind in this regard.
Maintaining Hong Kong’s status as an arbitration hub necessitates the training of more dispute resolution practitioners in the city. The Department of Justice has introduced the Young Professional Overseas Enrichment Program to sponsor young professionals and dispute resolution practitioners to participate in overseas international conferences related to law, mediation or arbitration, encouraging and supporting them to exchange and share experiences with professionals from other jurisdictions.
From the perspective of Hong Kong’s legal practitioners, the GBA Legal Professional Examination is vital to opening up the legal markets in the nine mainland cities of the GBA. The dual qualification of Hong Kong’s lawyers will put them in a most advantageous position to serve the need for legal services in the GBA. They are able to provide a range of legal services in civil and commercial affairs, including litigation and nonlitigation matters. Before the introduction of the examination, Hong Kong’s lawyers have already been appointed by the Qianhai Cooperation Zone People’s Court as Hong Kong-based jurors and mediators to handle cross-border related disputes.
With many nonaligned Association of Southeast Asian Nations and Middle Eastern countries managing to maintain sizable economic growth, mainland companies are beginning to shift the focus of their international business to these emerging markets. The Belt and Road Initiative has also brought many business opportunities to mainland enterprises. In fact, the center of gravity for global commerce has shifted. Thus, mainland enterprises are in need of high-caliber legal professionals to help handle transnational legal disputes. Mainland enterprises are encouraged to use Hong Kong law as the applicable contract law as this makes it easier for the contracting parties to understand the content of the contract and reach an agreement. Contracting parties may also be persuaded to name Hong Kong as the seat of arbitration.
Jonathan Yeung is a solicitor, a lawyer on the Chinese mainland since 2007 and director of civil litigation and practice consultant of the Chinese Dream Think Tank.
Kacee Ting Wong is a barrister, a part-time researcher of Shenzhen University Hong Kong and the Macao Basic Law Research Center, chairman of the Chinese Dream Think Tank, and a district councilor.
The views do not necessarily reflect those of China Daily.
