Hong Kong - Baker & McKenzie International Arbitration Yearbook: 2010-2011

Gary Seib is a Partner in the Hong Kong office of Baker & McKenzie and Chair of the Firm’s Global Dispute Resolution practice. Mr. Seib is a commercial litigation lawyer with extensive experience in the areas of corporate governance, compliance and regulatory matters, including cross border fraud investigations, asset tracing claims and recovery actions. He also practices in other areas of corporate law and commercial disputes, including IT and communications disputes, insolvency matters, employment and employee claims, professional indemnity claims and other insurance work.

Catherine Mun is Special Counsel in Baker & McKenzie’s Hong Kong office and a member of the Firm’s International Arbitration Practice Group. She represents multinational corporations in domestic and international disputes.

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Originally from Baker & McKenzie International Arbitration Yearbook 2010-2011

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A. LEGISLATION, TRENDS AND TENDENCIES

A.1 Recent Developments

In the last twelve months, there have been a few key developments in Hong Kong, which have important implications for dispute resolution generally, and will undoubtedly have an impact on the practice of arbitration.

In February 2010, the government launched a three month consultation on the application of mediation in commercial disputes. Some of the key recommendations include a standalone Mediation Ordinance aimed at providing a framework for the conduct of mediation. This development is part of Hong Kong’s continuing efforts towards seeking cost effectiveness and better access to justice, largely set by Hong Kong’s Civil Justice Reforms (“CJR”) introduced in 2009.

The CJR brought a variety of methods to encourage parties to resolve disputes, including through mediation. Parties who unreasonably fail to engage in mediation could face adverse costs consequences. The CJR has also enlarged the rules in relation to seeking interim relief in aid of foreign proceedings. Parties involved in proceedings outside Hong Kong are now more readily able to obtain appropriate interim relief (including interlocutory injunctions and receivers) against assets in Hong Kong. The Arbitration Ordinance (Cap 341) ("AO") was also revised alongside the court rules in 2009 and has been further revised by the Revised AO (as defined below) to empower the court to grant interim relief in aid of foreign arbitrations as a free-standing form of relief without being ancillary to any arbitration proceedings in Hong Kong. Interim relief could be granted in aid of foreign arbitrations prior to these amendments, and the amendments assist in clarifying the criteria and the factors to be applied and considered by the court when deciding whether to grant interim relief.

Finally, since 2009, there has been a major overhaul of the arbitration regime in Hong Kong. This development is outlined below.

Table of Contents:

A. Legislation, Trends and Tendencies A.1 Recent Developments A.2 Reform of Hong Kong Arbitration Regime A.3 Trends B. Cases B.1 Sovereign Immunity B.2 Enforcement B.3 Abuse of Process C. Insolvency Issues in Arbitration C.1 Court Interference in Arbitration Proceedings C.2 Effect of Winding Up and Appointment of the Provisional Liquidator