Consolidate and Enhance Hong Kong’s status as a Centre of International Legal and Arbitration service

3 February 2021

Dr. Thomas S.T. So, JP, Chairman of eBRAM

Recently, local media quoted from the news article “Companies consider writing Hong Kong out of legal contracts” published by Financial Times on 31 January 2021, claiming that lawyers at 10 international law firms received enquiries from companies on considering excluding Hong Kong as an arbitration venue from legal contracts over concerns China’s policy may affect the rule of law the Hong Kong SAR. The Secretary for Justice blogged and emphasized that Hong Kong will continue to serve as an international legal hub, and hoped we will join hands through concerned efforts to promote and explain any misconceptions and misunderstanding in Hong Kong’s arbitration and legal services.

As an arbitrator, a partner of an international law firm, and the Chairman of an online dispute resolution body, I believe that the article is not entirely accurate and misunderstands the development of Hong Kong’s legal services.

Hong Kong‘s return to stability facilitates the development of arbitration and legal services

With the resumption to stability from last year, more foreign companies started to resume economic activities with the Mainland and other areas through Hong Kong. As such, demands on Hong Kong’s legal services, including arbitration and mediation services, have been increasing day by day.

New opportunities for Hong Kong legal service

Hong Kong embraces an independent legal system and an advanced legal framework for arbitration and dispute resolution.  With the implementation of the “Belt and Road” initiative and development of the Greater Bay Area, interactions among the Mainland and other economies become highly active.  This has brought new and important opportunities for Hong Kong legal services including arbitration and mediation services.

In the Outline Development Plan for the Guangdong-Hong Kong- Macao GBA, Hong Kong is earmarked as the international legal service and dispute resolution service centre.

Investment arbitration cases usually require effective interim measures for the protection of assets and evidence. According to the “Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the HKSAR” which took effect on 1 October 2019, a party in a Hong Kong arbitral proceeding can apply for protection measures to the court of the Mainland before an arbitration award is rendered.  Hong Kong is currently the only common law jurisdiction globally which has signed such arrangement with the Mainland.  This unique advantage has further alleviated Hong Kong’s position as the bridge for investment activities for overseas enterprises in Greater Bay Area and the Mainland.  On the past few months, I have already received a number of enquiries from foreign investors on how to invest in the Greater Bay Area through Hong Kong.

In 2017, Hong Kong signed the “Free Trade Agreement” and related “Investment Agreement” with the Association of Southeast Asian Nations (ASEAN).  These agreements take effect from 2019, covering collaborations in service trading, investment, economy and technology, as well as dispute resolution and related areas. All members of ASEAN are economies along the “Road and Belt” route and play important roles.

Hong Kong’s impeccable commercial environment and well-established legal system attract many enterprises from ASEAN countries to establish their presence and start their business through Hong Kong.  All these new developments have brought new opportunities for Hong Kong’s legal services.

Develop Hong Kong’s LawTech services

The “Chief Executive’s 2020 Policy Address” has recognized the importance of law technology development.  Following the launch of the “LawTech Fund” and “COVID-19 Online Dispute Resolution Scheme”, the Department of Justice is actively exploring the development of the Hong Kong Legal Cloud service.   These visionary policies and measures are extremely important for alleviating Hong Kong’s legal service level and maintaining its leading position in Asia Pacific region, which are also widely supported and well-acclaimed among the legal and commercial sectors.

Hong Kong as the international legal services and online dispute resolution centre

To conclude, Hong Kong has been playing an important role in legal services provision in the country’s development policies.  Hong Kong continues to refine its well-established legal and advanced arbitration systems, and strives to developing online dispute resolution and LawTech services. These new developments further strengthen Hong Kong’s irreplaceable status as the dispute resolution and international legal service hub.

There had been rumours about companies considering excluding Hong Kong as an arbitration seat from legal contracts over concerns Hong Kong’s handover before and after the return of sovereignty to China in 1997.  Despite such rumours, Hong Kong has proved its strength and value through continuous enhancement in its arbitral system and legal framework in the past 20 years after the handover, and tops other key cities in Asia with its ranking in global judicial independence as well as the number of disputes handled.   In light of the above factors, I firmly believe that Hong Kong will continue to lead in the  international legal services and dispute resolution services space.

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