Interim relief protection allowed on mainland for HK arbitrations

Hong Kong’s local government and the national Supreme People’s Court on 2 April 2019 entered into The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and of the Hong Kong Special Administrative Region – a landmark arrangement that will allow, for the first time, parties to arbitrations (institutional only) seated outside mainland China to obtain interim relief protection (including orders for the preservation of assets and/or evidence) from the mainland courts that will be enforceable on the mainland. The Arrangement is reciprocal and allows parties to mainland-seated arbitrations to obtain similar protection from the courts in Hong Kong. The arrangement will come into effect on a date to be announced.

The Arrangement has significant implications for the local and international business communities. Previously, such protection was only available if the contracting parties opted for an arbitral seat in mainland China. However, many international parties have preferred to adopt Hong Kong arbitration, foregoing their ability to obtain interim relief on the mainland. Now, for the first time, the Arrangement will allow parties to opt for Hong Kong arbitration, while at the same time allowing them, if needed, to obtain interim relief protection in mainland China.

On a macro-level, this development comes at an important juncture. It is closely tied to the myriad positive steps China has taken in recent years to amend and bring its arbitration and related laws, judiciary and legal framework into the modern era. The Arrangement will be important to the implementation of key policy initiatives such as the Greater Bay Area Initiative (GBA) and the Belt and Road Initiative (BRI). The Arrangement also consolidates and enhances Hong Kong’s role as a key legal services and disputes hub for the region.

HOW IT WILL WORK

The Arrangement will apply to Hong Kong-seated arbitrations that are administered by relevant arbitral institutions or permanent offices of international inter-governmental organizations of which China is a member. The list of relevant institutions and permanent offices is being prepared and will be mutually confirmed by the Hong Kong local government and the Supreme People’s Court. These will include the Hong Kong International Arbitration Centre and possibly the International Chamber of Commerce (ICC) and CIETAC Hong Kong Arbitration Centre.