The Hong Kong Legal Industry Should Participate in the Greater Bay Area Development with Open Vision and Wide Perspective

As a programmatic guide to the current and future cooperation and development of the Guangdong-Hong Kong-Macao Greater Bay Area (the “Greater Bay Area”) to 2035, the Outline Development Plan for the Greater Bay Area (the “Outline Plan”) sets out the directions guiding the development of the Greater Bay Area, as well as establishes the key areas of cooperation. In the description of the cities in the Greater Bay Area, apart from continuing to support Hong Kong in consolidating and upgrading its status as international financial, shipping and trade centers, the Outline Plan again (as the National 13th Five-Year plan announced in March 2016) clearly proposes to build Hong Kong into an international legal and dispute resolution services center in the Asia-Pacific region. Therefore, there is a need for the legal industry in Hong Kong to carefully examine and understand the relevant contents of the Outline Plan, in order to develop legal industry in the Greater Bay Area while at the same time serving the needs of the country.

Assisting Mainland China to Promote Business Environment of Legal Certainty

As a fundamental condition for the development of the Greater Bay Area, the Outline Plan emphasises Hong Kong’s highly internationalised and legalised business environment when recognising the relatively leading international standard in the Greater Bay Area. The principle of rule of law under “One Country, Two Systems” and the “Basic Law” has become an important cornerstone for Hong Kong’s overall business environment to be widely recognised by the international community. According to the World Bank’s Doing Business 2019 Report, Hong Kong was ranked fourth globally on the ease of doing business.

Optimising business environment is an important idea of China’s “Reform and Opening Up”. President Xi Jinping has repeatedly stressed in the past few years that an essential part of further expansion includes creating world-class business environment. At the National “Two Sessions” (ie the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference) held in March this year, the State Council’s “Annual Government Work Report” listed “optimising business environment to stimulate market vitality and social creativity” as a major task of the Central People’s Government this year. Therefore, while the country aims at providing world-class business environment, Hong Kong can apply the relevant advanced concepts and tailor the best practices to the Greater Bay Area.

With a view to creating a legalised business environment in the Greater Bay Area, the Outline Plan proposes to strengthen the judicial exchanges and cooperation between Guangdong, Hong Kong and Macao, to boost the establishment of a diversified dispute resolution mechanism, so that quality, efficient and convenient judicial services will be provided for the construction of the Greater Bay Area. Judicial exchanges and collaboration embrace many aspects, including those between the judiciaries, as well as in-depth exchanges between associations for lawyers and the organisations for dispute resolution. It is not difficult to foresee that with the different legal systems in Guangdong, Hong Kong and Macao, inter-regional judicial conflicts are inevitable due to the cognitive barrier. Therefore, establishing a resources-sharing mechanism between judiciaries is vital, allowing one to share with others the case-related foreign laws and regulations, case acceptance, case precedents, and specific case analysis, thereby facilitating mutual recognition and enforcement of laws and judgments to achieve judicial efficiency. As for lawyers, arbitrators and mediators, they should go hand in hand to explore establishing professional contacts and cross-border cooperation mechanisms in the three places, so that they can lead the enterprises in the Greater Bay Area to go global and bring overseas enterprises into the Greater Bay Area.

Establishing a Diversified Dispute Resolution Mechanism

The Outline Plan elaborates on how to promote the establishment of a diversified dispute resolution mechanism. It is mainly through the improvement of international commercial dispute resolution mechanism, the establishment of an international arbitration center, further the cooperation between the organisations for arbitration and mediation in Guangdong, Hong Kong and Macao, to provide arbitration and mediation services for economic and trade activities in the three areas.

In fact, the Greater Bay Area has unique conditions for creating a branded, international and professional dispute resolution mechanism. Hong Kong is one of the most popular arbitration venues in the world, and the Hong Kong International Arbitration Centre (“HKIAC”) is a highly acclaimed arbitration institution.

In addition, many well-known domestic and foreign arbitration institutions set up their offices in Hong Kong. Hong Kong therefore naturally takes the lead as a dispute resolution center in the Asia-Pacific region. The Shenzhen Court of International Arbitration (“SCIA”) has already launched a bold and innovative attempt by including Hong Kong and Macao citizens to participate in Shenzhen arbitration through different means (including appointing Hong Kong and Macao citizens to serve as their board of directors and allowing them to participate in arbitration as arbitrators or as agent ad litem). In particular, it has been creatively stipulated in the arbitration rules of SCIA that Hong Kong can be selected as the venue of arbitration. It has laid a good foundation for promoting the establishment of a diversified dispute resolution mechanism within the Greater Bay Area.

With the construction of the Greater Bay Area, after the representative offices are set up by Hong Kong arbitration organisations in the Greater Bay Area, Guangdong, Hong Kong and Macao should gradually explore arbitration business in the Area. Moreover, attracting Hong Kong mediation agencies to set up branches in Shenzhen and Guangzhou, establishing the mutual recognition of qualifications for mediators in the two places, and formulating mediation rules are all proper ways to advance the establishment of a diversified dispute resolution mechanism.

Hong Kong as an International Arbitration Venue Should Benefit from and Provide Assistance to the “Belt and Road Initiative”

As an important supporting area for the “Belt and Road Initiative” (the “Initiative”), the Outline Plan supports Hong Kong to become a service center to solve the infrastructure investment and commercial disputes arising from the Initiative. In addition, the Outline Plan also proposes to promote the handling of intellectual property rights disputes through alternative dispute resolution methods including arbitration, mediation and consultation, as well as develop high value-added services including maritime law and shipping dispute resolution. These regulations highlight the particularity of Hong Kong as China’s only common law jurisdiction, and Hong Kong’s capability in providing competent dispute resolution services in the areas of the Initiative for infrastructure investment, intellectual property rights protection and maritime disputes.

In October last year, the Chief Executive Ms Carrie Lam Cheng Yuet-ngor, proposed in the Policy Address to develop an online platform that could provide online arbitration, mediation as well as smart contracts and related services. Pursuant to this measure, the Budget announced on February 27 this year allocated HK$150 million to support the development of a cross-region, convenient, secured and cost-effective online platform for dispute resolution. With the establishment of this platform, it is convenient for small and medium-sized enterprises including Hong Kong, the Greater Bay Area and the Initiative economies, especially ASEAN countries, to facilitate commercial transactions, manage risks and resolve disputes, thereby consolidating and enhancing Hong Kong’s status as the international legal and dispute resolution services center.

Hong Kong Legal Services Help the Country in Global Governance

It can be seen from the many plans for Hong Kong in the Outline Plan that the country is full of expectations for the role that Hong Kong can play. As President Xi Jinping pointed out during his meeting with a delegation of top officials, political and business leaders from Hong Kong and Macao in November last year, Hong Kong can support the country’s participation in global governance in a variety of ways by a more proactive participation in national governance practices. The Outline Plan specifically mentions the need to strengthen cooperation in Shenzhen-Hong Kong legal affairs to create an international legal service center and an international commercial dispute resolution center.

Apart from enhancing its own development, Hong Kong also shoulders the responsibility of promoting the establishment of a high quality and international diversified dispute resolution mechanism within mainland China, especially in the Greater Bay Area, so that the legal professionals of the Greater Bay Area can collaborate together and provide legal support to mainland China and overseas enterprises for “going global” and “coming in” under the “Belt and Road Initiatives”.

In addition, as a highly respected jurisdiction, the Hong Kong legal

industry should make use of its advantages in its understanding and familiarity with the application of common law-based international business practices, to assist the country in promoting a set of rules and regulations in line with with international standards with more opened vision and wider perspective, allowing Hong Kong law to make a presence in the intellectual property rights protection, carriage of goods by sea, international commodities trading and large-scale infrastructure construction.

Jurisdictions: 

Counsel, Hill Dickinson

Vice-President, The Hong Kong and Mainland Legal Profession Association

Qualified in both China and England & Wales, Mr. Liu specialises in shipping and commercial litigation and arbitration. His practices covers all areas of maritime and commercial law, including charterparty and shipbuilding contract disputes, cargo claims, sale of goods disputes, marine insurance and investment disputes etc. He handles a wide variety of cases of different types and sizes under LMAA Terms, HKIAC rules and UNCITRAL rules. He has published numerous articles and case commentaries in respect of shipping and arbitration topics in reputable journals and newsletters in England, Mainland China and Hong Kong. He is a member of The Chartered Institute of Arbitrators, a member of Hong Kong Maritime Arbitrators Group and a supporting member of London Maritime Arbitrators’ Association.