Thursday, August 5, 2021

INTERNATIONAL ARBITRATION & DISPUTE RESOLUTION: HONG KONG INTERNATIONAL ARBITRATION CENTER (HKIAC). I sincerely thank Dr. Ling Yang, The Deputy Secretary-General of HKIAC and Chief Representative of the Shanghai Office, whom I had the privilege to get to know and be colleagues with as Visiting Scholars at The Boston University School of Law, for taking the time to answer my questions about new frontiers in the Asia-Pacific International Arbitration and Dispute Resolution Scene. Ayça Akkayan Yıldırım

From: AYÇA AKKAYAN YILDIRIM & LING YANG
Date : August 5, 2021
To : Young Lawyers
Re : NEW FRONTIERS IN THE ASIA-PACIFIC INTERNATIONAL ARBITRATION SCENE: THE HONG KONG INTERNATIONAL ARBITRATION CENTRE PERSPECTIVE (PART I)

INTERNATIONAL ARBITRATION & DISPUTE RESOLUTION: HONG KONG INTERNATIONAL ARBITRATION CENTER (HKIAC)

I sincerely thank Dr. Ling Yang, The Deputy Secretary-General of HKIAC and Chief Representative of the Shanghai Office, whom I had the privilege to get to know and be colleagues with as Visiting Scholars at The Boston University School of Law, for taking the time to answer my questions about new frontiers in the Asia-Pacific International Arbitration and Dispute Resolution Scene. Ayça Akkayan Yıldırım

 

AAY: Dear Ling, could you please briefly tell us about your legal education and career to date?

 

LY: Well, I got my LLM and PhD degrees from the Institute of International Law, Wuhan University (WHU) in 2006 and 2009. During that period, I have been consistently studying private international law and international arbitration. My supervisor in WHU was Prof. Lianbin Song, a well-known expert in international arbitration in mainland China. He has a deep knowledge of both theory and practice regarding international arbitration. Influenced by him, the subject of my master’s and doctoral thesis were both on international arbitration. My master’s thesis was on remit in arbitration, and my doctoral thesis was a comparative study on international arbitration procedure. After getting my PhD degree in 2009, I got tenure at the School of International Law at the East China University of Political Science and Law (ECUPL). During my teaching at ECUPL, I published more than 30 academic articles and two monographs. You may find my works, including publications, are basically related to international commercial and investment arbitration.

In the year of 2016, I went to Boston University Law School as a visiting scholar under the guidance of Prof. William W. Park, a very well-known professional and arbitrator in the field of international arbitration.

During my visit in Boston, I was approached by the Hong Kong International Arbitration Centre (HKIAC) at the end of 2016.  I was told that HKIAC set up its very first office in Mainland China (Shanghai) and asked whether I was interested in being the Chief Representative of the Shanghai Office. The main function of this position was to handle HKIAC’s business related to mainland China. At the end of 2017, when I was back from Boston, I joined HKIAC.

Still, I keep teaching at ECUPL and working as a master supervisor since then. In addition, I also serve as a master supervisor at a number of other universities in Mainland China apart from ECUPL at the same time. In fact, it’s part of my job to maintain a good relationship with universities in Mainland China on behalf of HKIAC. Every year, I visit different law schools and deliver lectures, and I cooperate with some universities on behalf of HKIAC to provide public lectures for young students. In 2020 and 2021, HKIAC co-organized with leading Mainland law schools to conduct the Public Courses on International Arbitration. We have done this with Shanghai University of Finance and Economics, Wuhan University, Fudan University Law School and Shanghai University of Political Science and Law, respectively. For each of the sessions, we have seen more than 1800 students worldwide signed up for the courses. 

 

AAY: How did you discover your interest in the field of alternative dispute resolution?

 

LY: Well, it’s been a long time, and I don’t quite remember how I became interested in international arbitration. However, I am pretty sure the most significant influence came from my supervisor, Prof. Lianbin Song, when I was a student at WHU. He had published many academic works in private international law and arbitration at a very young age. Prof. Song has supported and participated in the revision of arbitration rules of many arbitration institutions in Mainland China. Under the guidance of Prof. Song, I had the opportunity to participate in academic projects about international arbitration and got internships in arbitral institutions. I think I had gradually developed an interest in international arbitration in this way.

 

AAY: Could you please tell us briefly about the history of the HKIAC as the third most preferred international arbitral institution worldwide according to the Queen Mary University of London and White&Case 2021 survey?

 

LY: As you know, on 7 May 2021, Queen Mary University of London and White & Case released their latest International Arbitration Survey, which once again ranked HKIAC as the third most popular arbitration institution in the world and Hong Kong as the third most preferred seat of arbitration in the world.

According to the Survey, more than 40% of respondents selected HKIAC as a preferred arbitral institution, an increase of nearly 20% since the last Survey. These data reflect the continual ascent in HKIAC’s caseload over the last decade. You may easily find the statistics in HKIAC’s record arbitration statistics in 2020.

As to Hong Kong, it was selected by 50% of respondents as a preferred seat of arbitration. And there has been an increase of 22% since 2018 in this regard. So, I think it is fair to say that Hong Kong has a longstanding and recognized reputation as a ‘safe seat’ and is an obvious choice of established quality. This Survey also echoes HKIAC’s statement in 2020 that Hong Kong remains a neutral and effective seat.

 

AAY: Then what makes HKIAC so special?

 

LY: Well, in my mind, HKIAC is indeed an amazing organization, and we can just tell the uniqueness from its name. But let me first briefly review the history of HKIAC. We know HKIAC is a non-profit organization founded in 1985 in Hong Kong by a group of leading business people and professionals. They tried to meet the growing need for dispute resolution services in Asia by establishing this organization. Therefore, it’s true that initially, the Hong Kong business community and the Hong Kong Government provided funding to the HKIAC. But, today, the HKIAC is financially self-sufficient and completely free and independent from any type of influence or control.

After 36 years of development, HKIAC has grown into a globally recognized arbitration institution. As such, the first word in its name—I mean “Hong Kong”, merely represents the institution’s origins and does not accurately reflect the scope of its current influence. Because HKIAC now serves users not just from Hong Kong or Asia, but those spreading across all continents. For example, HKIAC had received 318 arbitration filings in 2020. And 72.3% of those were international in nature, which means at least one party was not from Hong Kong. 85.7% of the administered arbitrations commenced in 2020 were international cases. And 31.8% of all arbitrations submitted to HKIAC in 2020 involved no Hong Kong parties, and 6.6% involved no Asian parties. You see, the service of HKIAC is highly open to and welcomed by arbitration users all over the world.

Another interesting point is the word “arbitration” in HKIAC’s name. Of course, arbitration is one of the most essential and core services of HKIAC. And for this reason, I suppose many users may not know that HKIAC also provides other three kinds of services concerning dispute resolution except for arbitration. Firstly, we provide high-quality mediation services, a core service branch of HKIAC; secondly, HKIAC also provides domain name dispute resolution. And the quality of this service has been well admitted by professionals. In fact, the Permanent Institution of Asian Domain Name Dispute Resolution Center is just located at HKIAC. In addition, HKIAC also provides adjudication services, which attracts parties involved in construction disputes. Therefore, we can see HKIAC delivers a full range of one-stop-shop dispute resolution services. Parties could choose from these four kinds of dispute resolution methods according to their particular needs.

Undeniably, with the economic boom in the Asia-Pacific region over the years, HKIAC has become more and more recognized by parties worldwide. This year again, HKIAC ranked third most attractive arbitration institution. While this ranking is an encouragement for us, we still hope to provide more diverse, inclusive and effective services to users worldwide.

 

AAY: HKIAC is located in Hong Kong, a city in a fascinating part of the world, with a vibrant arbitral community. Why do you think Hong Kong is a favorite arbitration venue?

 

LY: In my opinion, that is because Hong Kong is a unique jurisdiction. On the one hand, Hong Kong is a part of Chinese territory; on the other hand, it is a jurisdiction which is very different from the Mainland. Under One Country, Two Systems, the legal system of Hong Kong is based on the common law and supplemented by statutes. On the contrary, Mainland China adopts the civil law system.

To be more specific, Under Article 92 of the Basic Law, judges may even be recruited from other common law jurisdictions. As of this moment, the Court of Final Appeal includes 13 eminent foreign judges from the UK, Australia and Canada (latest nominations include Madam Justice McLachlin, Lord Sumption and Lord Hodge). These foreign judges could act as the bridge between the legal system of Hong Kong and that of other common law jurisdictions. And they all make their judgments independently, subject to appeal as laid down by law.

What I have said is just a quick introduction to the Hong Kong legal system. Now I’d like to share with you something about the legislation of arbitration in Hong Kong. As you know, in contrast to the arbitration law in the Mainland, the Hong Kong Arbitration Ordinance is based on the UNCITRAL Model law, which is well understood by practitioners from both civil law and common law jurisdictions and familiar to the international business community. The Hong Kong Arbitration Ordinance, which came into effect in June 2011, featured four critical aspects. For convenience, I will just refer to it as the Ordinance.

Firstly, the reform has made Hong Kong’s arbitration law more user-friendly for arbitration users in and outside Hong Kong. It has unified the separate regimes of domestic and international arbitration under a self-contained legislation, which is the Ordinance. To be more exact, the Ordinance has achieved this goal by giving legal effect to those provisions of the Model Law which are applicable to Hong Kong. Secondly, the Ordinance has enhanced confidentiality for international arbitration. It provides that court proceedings relating to arbitration are generally not to be heard in open court. It also prohibits the publication, disclosure or communication of any information relating to arbitral proceedings and awards unless otherwise agreed by the parties or under any exceptions in the Ordinance. Thirdly, this Ordinance allows foreign law firms and practitioners to engage in and advise on arbitration in Hong Kong. Besides, parties in arbitration may retain advisers regardless of their nationalities and professional qualifications. Fourthly, this Ordinance limits court’s power of intervention in arbitral proceedings to specific circumstances. It also restricts the power of appeal to proceedings which determine substantive rights to ensure fair and speedy resolution of disputes by arbitration. Last but not least, the Ordinance retains the status quo of domestic subcontracting agreements in the construction industry applying the domestic regime by opt-in provisions.

Since then, the Ordinance has been amended four times to ensure that Hong Kong’s arbitration law stays abreast of international developments. We could even say that the Hong Kong Arbitration Ordinance not only reflects the strength of the UNCITRAL Model Law, but also achieves development based on it. The Ordinance has expressly incorporated provisions clarifying that emergency relief granted by an emergency arbitrator in or outside Hong Kong is enforceable in 2013. And it has introduced the provisions regarding third-party funding and the arbitrability of IP-related disputes in 2017.

In addition to the Hong Kong Arbitration Ordinance, the judiciary of Hong Kong also takes a firm pro-arbitration stance and a “hands-off” approach concerning arbitration. To name just a few, (a) arbitration-related cases are heard at first instance by specialist judges; (b) the Hong Kong courts maintain an excellent track record of enforcement of arbitral awards; (c) the courts did not set aside any award between 2011 and 2014 and in 2017, and in 2020 only 2 out of 51 awards were set aside; (d) the Hong Kong judiciary has established an indemnity costs rule to deter parties from resisting arbitral proceedings or awards on unmeritorious grounds and so on. Therefore, Hong Kong’s arbitration legislation is very advanced and closely follows the development of practice.

Except for the guarantee from advanced legislation and independent judiciary, Hong Kong has a strong arbitration community. There is a vast pool of multilingual professionals, including over 1,300 barristers, 99 of whom are senior counsel, over 7,600 local practicing lawyers and over 1,340 registered foreign lawyers in Hong Kong. Many practitioners have a good command of both common law and civil law and several languages, including English, Mandarin and Cantonese. Because of Hong Kong’s close connection with mainland China, practitioners in Hong Kong have a deep understanding of Chinese business culture, which could definitely facilitate the communication between them and their clients.

What I have said so far is mainly about Hong Kong itself. In fact, as Hong Kong is a special administrative region of China, there have been several unique arrangements between Hong Kong and Mainland China. For instance, the “2019 Interim Measure Arrangement” and the “2020 Supplementary Enforcement Arrangement” have covered the whole process of arbitration-related interim measures, which is the first time between the Mainland and other jurisdictions. Under the “2019 Interim Measures Arrangement”, Hong Kong has become the first and the only jurisdiction outside the Mainland where parties to arbitral proceedings administered by Hong Kong arbitral institutions could apply to the mainland courts for interim measures.

All of these factors make Hong Kong a unique region for international arbitration. And I believe Hong Kong has been and will continue to be a neutral and efficient arbitration seat for the reasons as mentioned earlier. With all these characteristics, Hong Kong has attracted many other leading arbitration institutions to set up offices. And we are delighted to work with colleagues in other arbitration institutions to provide first-class arbitration services to parties worldwide.

 

END OF PART ONE… TO BE CONTINUED…

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