Arbitration: A Growing Practice Area

In his 2016 Policy Address, the Chief Executive reported that professional services accounted for 4.8 percent of GDP in 2013 and provided around 200,000 jobs.  Of these services, he specifically highlighted dispute resolution services as having room for development to enhance Hong Kong’s competitiveness as a global financial, trade and business centre.

Pursuant to this policy direction, the Department of Justice (“DoJ”) has been actively pursuing a number of initiatives to promote arbitration services. Since June 2011, the arbitration regime in Hong Kong has been modernised to accord with widely accepted international arbitration practice by the enactment of the new Arbitration Ordinance (Cap. 609). Further, to promote Hong Kong as an intellectual property (“IP”) trading hub, the DoJ is taking steps to amend the Arbitration Ordinance with a view to making it clear that disputes over IP rights are capable of resolution by arbitration and that it would not be contrary to public policy to enforce an arbitral award solely because the award is in respect of a dispute or matter which relates to IP rights. The Law Society is supportive of this initiative.

The robust government policy in promoting Hong Kong’s arbitration services has attracted arbitration institutions at both international and regional levels to set up offices or arbitration centres in Hong Kong. They include the International Court of Arbitration of the International Chamber of Commerce (“ICC”), the China International Economic and Trade Arbitration Commission (“CEITAC”), the Hague Conference on Private International Law and the China Maritime Arbitration Commission.

Further, in January 2015, through the signing of a Host Country Agreement and the related Memorandum of Administrative Arrangements between the Permanent Court of Arbitration (“PCA”) and the Central Government and the HKSAR Government respectively, dispute resolution proceedings administered by the PCA can be conducted in Hong Kong on an ad hoc basis with the provision of facilities and support services. The Hague-based PCA is an inter-governmental organisation which facilitates arbitration and other forms of dispute resolution between states and its dispute resolution services also involve inter-governmental organisations and private parties. The conclusion of the Host Country Agreement and Administrative Arrangements confirms the internationally-recognised status of Hong Kong as an arbitration service hub in the Asia-Pacific region.

The public statistics posted by various arbitration institutions in Asia demonstrates an upward trend in the number of arbitration cases.

The Hong Kong International Arbitration Centre (“HKIAC”) reported a record high of 271 new arbitration cases in 2015, compared to 242 in 2014. Coincidentally, the Singapore International Arbitration Centre also recorded 271 new arbitration cases in 2015, compared to 232 in 2014. The annual overall caseload of CEITAC in 2015 was 1,968 out of which 437 cases were foreign related, compared to 1,610 cases in 2014 out of which 387 were foreign related. 801 requests were filed with ICC worldwide in 2015, compared to 791 in 2014.

Arbitration is a growing practice area and the Law Society is actively promoting our members’ capabilities in this area. Through the efforts of our representatives, we speak on international arbitration in Hong Kong whenever a good opportunity arises. Our message is clear and simple:

  • choose Hong Kong as the dispute resolution venue – Hong Kong is a neutral dispute resolution venue with world class arbitration institutions and professionals that are capable of providing efficient and reliable dispute resolution services; and
  • choose Hong Kong law as the governing law – Hong Kong law is clear, certain and accessible and ideal to be the governing law in the relevant commercial and investment agreements.

In the past year, our voice promoting arbitration was heard in different places, for example, in Jakarta in September 2015 (during “In Style – Hong Kong” by the HKTDC), in Guiyang and Xian in February 2016 (during “Belt and Road – Hong Kong Legal and Arbitration Seminars” by the DoJ), in Peru in February 2016 (during the APEC Workshop by the DoJ), in Kuala Lumpur in April 2016 (during the IPBA Annual Conference), in Chengdu in May 2016 (during SmartHK by the HKTDC) and in Tokyo in July 2016 (during the Joint Seminar with Tokyo Bar Association).

To maintain a central database for promotion of our members’ arbitration services, the Council has recently approved the establishment of a Law Society Panel of Solicitor Arbitrators. Work is being done on the final draft. Based on the current draft framework, those who satisfy the following eligibility requirements may apply to the Law Society for admission onto the Panel:

(a) are currently a member of the Law Society and hold a current practising certificate;
(b) have at least 8 years of post-qualification experience as a solicitor on a full time basis or equivalent;
(c) have at least 5 years of experience in arbitration practice; and
(d) are currently a Fellow or above with the Hong Kong Institute of Arbitrators or the Chartered Institute of Arbitrators.

Much has been said about the opportunities for solicitors arising from the Belt and Road Initiative. This national strategy acts as a catalyst for the vision of Mainland enterprises going global and stimulates an increasing demand for cross-jurisdictional legal and dispute resolution services. The establishment of a Panel of Solicitor Arbitrators focuses attention on the strength of experienced Solicitor Arbitrators available in Hong Kong and makes it easier for referrals by potential users of arbitration services. The Law Society will soon issue an Information Package detailing the application requirements and procedures for admission to the Panel.

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President, The Law Society of Hong Kong