New benefits of arbitration in Hong Kong

IF YOU ARBITRATE IN HONG KONG, YOU CAN ENJOY THE BENEFITS OF INTERIM MEASURES IN MAINLAND CHINA IN NEW SUPPORT OF ARBITRAL PROCEEDINGS BY LOCAL COURTS.

The Hong Kong Government and Supreme People’s Court of China signed an important agreement on 2 April 2019. This Agreement enables any party to “arbitral proceedings in Hong Kong” to apply to the relevant Chinese court for an interim measure, such as the preservation of assets, evidence or conduct, in relation to arbitration under Chinese laws and regulations.

In the same manner, any party to arbitration in China may apply to the Hong Kong courts for an interim measure pursuant to Hong Kong law. Available interim measures include e.g. restoration of the status quo pending determination of the dispute or preservation of assets or evidence that may be relevant and material to the resolution of the dispute.

Arbitral proceedings in Hong Kong means mainly arbitral proceedings seated in Hong Kong and administered by institutions or permanent offices established or headquartered in Hong Kong. The Hong Kong Government will provide a list of authorized institutions or permanent offices. Those will undoubtedly include at least the Hong Kong International Arbitration Center (“HKIAC”) and CIETAC Hong Kong. Therefore, any party to arbitration proceedings administered by those two institutions will be able to request interim measures from the mainland Chinese courts in the location of the respondent or relevant assets or evidence.

One of the two Czech lawyers on the list of arbitrators of the above mentioned HKIAC is a partner at ROWAN LEGAL law firm and the head of its dispute resolution department JUDr. Ing. Miloš Olík, Ph.D., LL.M., FCIArb. Moreover, ROWAN LEGAL’s Senior Associate Mgr. Michal Čáp, LLM, MCIArb, will be relocating to Hong Kong as of August 2019.

The agreement thus opens up a new opportunity for European entities, who choose the option of arbitration in Hong Kong with a Chinese party, to apply to Chinese courts, which will have the power to grant interim measures in relation to the arbitration. The aforementioned agreement may, among other things, lead to increased legal certainty and protection with regards to cooperation between European and Chinese entities.

Text prepared: Mgr. Michal Čáp, LLM, MCIArb

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