EFFECTS OF THE BELT AND ROAD INITIATIVE ON DISPUTE SETTLEMENT IN THE REGION
In 2013, China announced the Belt and Road Initiative (BRI). This large-scale outward investment strategy aims to stimulate economic growth along the overland ‘Silk Road Economic Belt’ and the maritime ‘21st Century Maritime Silk Road’.
Through the BRI, the Chinese government estimates that between US$900bn and US$8 trillion will be invested in construction and infrastructure projects intended to develop integrated trade corridors across Asia, the Middle East, Africa and Europe, covering more than 65 countries and 60 percent of the world’s population (the BRI markets).
The BRI has already and is likely to continue to give rise to large numbers of long term, multi-contract, multi-party transactions which will inevitably lead to a number of complex, transnational disputes of varying quantum.
The common factor in BRI projects is the presence of Chinese parties as investors or financiers into BRI markets. These BRI markets have varying degrees of legal sophistication and some may not have reliable and independent judicial systems that are able to facilitate the fair and efficient resolution of such complex disputes.
In light of the foregoing, it is important for all parties to understand the available methods of dispute resolution along the BRI.
Throughout the BRI markets, arbitration has become the dispute resolution mechanism of choice. The number of maritime, infrastructure and construction disputes resolved by arbitration is growing steadily. Arbitration is frequently used in international transactions and is generally regarded as being flexible, confidential and efficient. Crucially, arbitral awards are enforceable in over 150 countries around the world under the New York Convention. Arbitration also enables parties to avoid the domestic court systems of their counterparties.
Jul-Sep 2018 issue
Hong Kong International Arbitration Centre