Arbitration

Asia’s premier maritime arbitration venue

Arthur Bowring explains why the city is best placed to solve shipping disputes

Hong Kong has certainly been in the news over the last couple of years. There is a quote from a 1995 story in Fortune magazine that is reinvigorated every time Hong Kong’s political situation is analysed in the media, “The Death of Hong Kong – the naked truth about Hong Kong’s future can be summed up in two words: It’s over.” But as Mark Twain is said to have said, but didn’t, “The reports of my death have been greatly exaggerated”.

We, in the Hong Kong Maritime Arbitration Group (HKMAG), can reassure readers that the institutions that underpin Hong Kong’s illustrious reputation as a commercial and legal powerhouse remain as effective as ever.

Hong Kong’s legal system is based on the rule of law, judicial independence, and a skilled and independent legal profession. Under One Country, Two Systems Hong Kong retains its common law system, and is the only common law jurisdiction in Greater China. Within that framework, the Hong Kong government and the courts are strongly supportive of arbitration. Hong Kong has a significant advantage over other seats of arbitration in the APAC region. Parties to arbitration often wish to seek interim measures, such as inspection and asset freezing, both in the arbitral seat and beyond. Whether such interim measures are available outside the seat to assist foreign arbitration proceedings depends upon the procedural law of the national courts.

In 2019, the Supreme People’s Court of the PRC and the Department of Justice of Hong Kong signed the ‘Arrangement Concerning Mutual Assistance in Court Ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the HKSAR’. Under this document, parties to arbitrations seated in Hong Kong and administered by eligible arbitral institutions can apply to the Mainland Chinese courts to enforce interim measures against parties and assets in Mainland China. HKMAG is one of the few designated institutions in Hong Kong that enjoy this eligibility.

For those seeking administered arbitration with a view to enforcement in Mainland China and elsewhere, HKMAG has produced Procedures for the Administration of Arbitration under the HKMAG Terms 2021. The procedures describe a very light touch administered approach. There is no registration fee, and the total administration fee is fixed at only HK$5,000 ($642), regardless of the quantum of the dispute.

Most companies engaged in international trade are familiar with the London Maritime Arbitrators Association (LMAA). With the consent of LMAA, HKMAG has adopted the LMAA 2021 Terms, including Schedule 6 on Virtual Hearings, and the LMAA SCP (Small Claims Procedure) as the HKMAG Terms 2021 and the HKMAG Small Claims Procedure 2021, with minor changes to incorporate references to Hong Kong arbitral law.

In recognition of Hong Kong’s leading role in Asia for dispute resolution, Hong Kong and HKMAG were added to the BIMCO Law and Arbitration Clause 2020.

HKMAG does not measure its effectiveness by the number of international arbitrators on its panel. HKMAG’s full members and members are deliberately Hong Kong citizens or permanent residents in and of Hong Kong. They create and maintain a local pool of legal and technically qualified professionals with experience in maritime, technical and commercial issues.

Companies involved in international trade are very likely to face contractual disagreements. The need for such disputes to be resolved efficiently, fairly, competently, and economically is essential. Hong Kong remains the best venue in Asia for dispute resolution, whether through arbitration or mediation.

SUPERB SHIPPING PRACTICE IN HONG KONG FOR DECADES

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