HONG KONG ARBITRATION TRENDS: THE RISE OF PRC DISPUTES, INDIA ‘GAZETTES’ CHINA, AND HKIAC RULE REVISIONS

Hong Kong has long been seen as a bridge to Asia, and its unique position has made it a favoured place for arbitrations involving Chinese parties. Even after its reversion to China in 1997, Hong Kong has retained its independent judiciary based on the English common-law tradition and is in fact often cited as the jurisdiction which still closely follows the precedence of the English courts. The reliability of such a system makes Hong Kong attractive to users from all common law jurisdictions. Sitting at the footstools of China, Hong Kong is equally palatable to its neighbours across the border. Such a position has fuelled the rise in Hong Kong-seated arbitrations involving Chinese parties. HKIAC has seen a rapid increase in these types of disputes, which, in turn, has allowed the HKIAC to gain in-depth experience in handling parties from both civil and common law jurisdictions and in dealing with Chinese parties.

One of the latest arbitration developments in Asia to directly affect Hong Kong involves two of the biggest trading partners in Asia – India and China. India’s enforcement regime of arbitration awards has long been problematic despite being a signatory to the New York Convention. Under the Indian Arbitration and Conciliation Act (1996), India only recognises awards made in a Convention country that has also been added to the Indian Official Gazette to which the Convention applies. Currently, the Gazette contains fewer than one-third of the New York Convention signatories. However, in March 2012, the Department of Legal Affairs of the Indian Government Ministry of Law and Justice ‘gazetted’ China, which includes Hong Kong SAR, meaning that arbitration awards seated in Hong Kong may now be recognised and enforced in India. The change indicates that parties contracting with Indian parties now have clarity as to the enforceability of a Hong Kong award in India.

Oct-Dec 2013 issue

Hong Kong International Arbitration Centre