Focus on pre-arbitration interim measures in mainland and Hong Kong

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“Pre-arbitration interim measures” refers to the interim preservative or protective measures adopted by an arbitral tribunal or a competent court prior to the commencement of arbitration proceedings, pursuant to the laws and rules applicable to the arbitration proceedings and at the request of either party concerned, mainly including evidence preservation, asset preservation and conduct preservation.

陈鲁明 Chen Luming
陈鲁明 Chen Luming

In recent years, pre-arbitration interim measures have been gradually recognised and valued by legislative bodies in various countries and arbitration institutions of all types. The court of arbitration of the International Chamber of Commerce (ICC) has adopted pre-arbitration interim measures in its latest rules of arbitration, effective from 1 January 2012. In response to this trend, legislative bodies in mainland China and Hong Kong have successively introduced pre-arbitration interim measures to their respective arbitration systems, in 2012 and 2013. We will compare the differences of pre-arbitration interim measures between mainland China and Hong Kong, and briefly discuss reciprocal enforcement in these two regions.

Pre-arbitration interim measures

Mainland China: China’s Civil Procedure Law (CPL), which came into effect on 1 January 2013, introduced pre-arbitration interim measures to the arbitration system in the mainland for the first time. Article 101 of the CPL provides that any interested party may apply to a competent people’s court for preservation measures prior to applying for arbitration. Meanwhile, pursuant to other relevant provisions of the CPL, pre-arbitration interim measures include asset preservation, conduct preservation and evidence preservation.

The Supreme People’s Court has not yet issued any detailed judicial interpretations for the implementation of pre-arbitration interim measures in practice, resulting in uncertainty over the actual application of such measures.

Hong Kong: The Hong Kong International Arbitration Centre (HKIAC) has introduced pre-arbitration interim measures for the first time in its administered arbitration rules, amended on 12 June 2013 and effective from 1 November 2013. Hong Kong’s Legislative Council then amended the Arbitration Ordinance on 19 July 2013, stipulating that pre-arbitration interim measures are enforceable, thus guaranteeing the implementation of such measures in practice.

Pursuant to article 23.1 of the HKIAC arbitration rules, a party may apply for urgent interim or conservatory relief prior to the constitution of the arbitral tribunal, pursuant to the procedures set out in schedule 4 (the emergency arbitrator procedures). Further, article 22B of the Arbitration Ordinance prescribes that any emergency relief (i.e. interim measures) granted by an emergency arbitrator under the relevant arbitration rules is enforceable, but only with the leave of the court of original instance.

Comparison between the mainland and Hong Kong

Compared with mainland China, the framework of pre-arbitration interim measures in Hong Kong is relatively conservative, attaching more importance to the reasonableness of interim measures and providing reasonable relief for the parties against whom the interim measures are taken. On the other hand, the provisions of mainland China lay more emphasis on the efficiency of the decision on interim measures.

Parties entitled to accept applications. Pursuant to China’s CPL, only people’s courts are empowered to accept applications for pre-arbitration interim measures submitted by the parties concerned, whereas the HKIAC arbitration rules specify that such applications shall be directly accepted by the HKIAC, which should appoint emergency arbitrators for the parties concerned within two days upon receipt of their applications and advance payments.

Statutory deadline for arbitration application submission. According to China’s CPL, a party concerned should formally submit an arbitration application within 30 days after the relevant people’s court has taken interim measures, otherwise such measures will be lifted by the people’s court. However, neither the HKIAC arbitration rules nor the Arbitration Ordinance clearly stipulates the deadline for the parties concerned to submit an arbitration application after interim measures have been taken.

Deadline for deciding on interim measures. According the CPL, a people’s court that has accepted an application should make a ruling within 48 hours, and should require the applicant to provide guarantee. The HKIAC arbitration rules prescribe that an emergency arbitrator should make an appropriate decision within 15 days after the HKIAC has handed over the relevant case to him or her, and that this time period can be extended based on the application of the party concerned, or according to a decision of the HKIAC.

Relief for parties against whom the interim measures are taken. The CPL contains no corresponding relief for the parties against whom the interim measures are taken. By contrast, the HKIAC arbitration rules provide that an emergency arbitrator should ensure that the party concerned has reasonable opportunities to be heard regarding the application for interim measures, and that the emergency arbitrator should be entitled to decide on any objection to arbitration jurisdiction raised by the party against whom the interim measures are taken.

Reciprocal enforcement between the mainland and Hong Kong. The cross-border enforcement of interim arbitral measures has always been challenging in judicial practice. We note that article 22B(2) of the Arbitration Ordinance provides that the pre-arbitration interim measures granted by institutions outside Hong Kong may still be enforced by Hong Kong courts, provided that certain conditions are satisfied. However, there is no similar provision in the mainland.

At present, only the Arrangements of the Supreme People’s Court on the Reciprocal Enforcement of Arbitral Awards between Mainland China and Hong Kong regulate the reciprocal enforcement of arbitral awards between the mainland and Hong Kong, according to which only “arbitral awards” are the subject matter for enforcement. There is no precedent on whether decisions on interim measures can be interpreted as “arbitral awards” under the arrangements. Therefore, we appeal to relevant authorities in mainland China and Hong Kong to accelerate the amendment and improvement of an inter-regional judicial assistance agreement to provide adequate safeguards for the reciprocal enforcement of interim arbitral measures (including pre-arbitration interim measures and interim measures during arbitration proceedings) between mainland China and Hong Kong.

Chen Luming is a partner at the Shanghai office of Jun He Law Offices. He can be contacted on +86 21 2208 6396, or by email at: [email protected]junhe.com.