The Mainland-HK arrangement: HKIAC practice and experience

By Hong Kong International Arbitration Centre
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Hong Kong

The Arrangement Concerning Mutual Assistance in Court-ordered Interim Measures in Aid of Arbitral Proceedings by the Courts of the Mainland and the Hong Kong Special Administrative Region has been one of the most important developments for the Hong Kong International Arbitration Centre (HKIAC) in the past year.

The arrangement allows for any party to arbitral proceedings seated in Hong Kong and administered by a qualified arbitral institution (such as the HKIAC) to apply to the Intermediate People’s Court (IPC) of the place of residence of the party against whom the application is made, or the place where the property or evidence is situated, for interim measures in accordance with the Civil Procedure Law, Arbitration Law, and any relevant judicial interpretations.

In relation to applications to the IPC by parties to arbitral proceedings seated in Hong Kong and administered by the HKIAC, the HKIAC may provide assistance to the parties by facilitating any applications for interim measures under the arrangement before or after the HKIAC accepts the arbitration.

Where the HKIAC has accepted an arbitration, it may issue a letter of acceptance upon a party’s request, and communicate copies of that letter to the requesting party only upon the IPC’s request.

When a party wants to make a request for a letter of acceptance, the HKIAC requires the following material:

  • A request for a letter of acceptance;
  • A copy of the application that the party intends to submit to the IPC, including any supporting material (or if the party has applied to the IPC first, a copy of the application that has been made to the IPC, with supporting material);
  • If the party has applied to the IPC before starting arbitration, a copy of the IPC’s decision on the application;
  • An indication as to whether any other party to the arbitration should be copied on communications in relation to the request; and
  • Any other documents or information required by the HKIAC.

Since the entry into force of the arrangement on 1 October 2019, the HKIAC has received 13 applications under the arrangement. All 13 applications were made in ongoing arbitrations seated in Hong Kong and administered by the HKIAC under its administered arbitration rules.

Of the 13 applications, 12 were made for orders to preserve assets, and one was for an order to preserve evidence. All applications were made on an ex parte basis and involved applicants and respondents from Hong Kong, mainland China and other jurisdictions.

The applications were made to nine different mainland Chinese courts. The HKIAC is aware of at least five of the applications for preservation of assets having been granted to the total value of approximately RMB1.7 billion (US$243 million). In each of the applications, the HKIAC has issued a letter of acceptance to the applicant, and in some cases has provided a copy of the letter of acceptance, or the applicant’s application, directly to the relevant court upon the court’s request.

Considering the above-mentioned statistics, and in light of the fact that the arrangement has only been in force since 1 October 2019, it is apparent that the arrangement has had a significant impact for applicants in HKIAC arbitrations. The arrangement has clearly addressed a need for parties who are participating in arbitrations seated in Hong Kong, and has helped to ensure that arbitration in Hong Kong continues to be an effective form of alternative dispute resolution.

Further, the usage of the arrangement, to not only preserve assets but also evidence, also serves to prove that options are now available to parties to ensure that the integrity of arbitral proceedings seated in Hong Kong is preserved. This only increases the appeal of having an arbitration administered through a qualified institution such as the HKIAC.

Notably, all of the applications that the HKIAC has received since the arrangement came into effect have been in relation to ongoing arbitrations, i.e., applications for letters of acceptance after an arbitration has already been accepted by the HKIAC. While the arrangement contemplates the possibility of interim measures being applied for before an arbitration has been accepted, from the HKIAC’s perspective, such an option appears to be exercised less frequently.

As awareness and application of the arrangement becomes more widespread in courts around China, the HKIAC expects greater usage of the arrangement, not only in cases where arbitration is already ongoing in Hong Kong, but in respect to applications that parties may be considering before commencing an arbitration.

In summary, the statistics shown in relation to the arrangement speak to the immediate impact and effectiveness of the arrangement, and have helped to create an effective regime for co-operation between Hong Kong arbitral institutions and mainland Courts. The HKIAC is well positioned to further facilitate such co-operation as awareness and usage of the arrangement grows over time.

More information on the HKIAC’s role as a qualified institution under the arrangement, including the full text of the arrangement, notes on interpretation and application of the arrangement by the Supreme People’s Court, links to template documents, lists of qualified arbitral institutions, relevant Hong Kong and mainland Chinese laws, and links to the HKIAC’s publications on the arrangement can be found here.

Eric Ng is managing counsel at the Hong Kong International Arbitration Centre