Mutual assistance for interim measures in arbitration

By China International Economic and Trade Arbitration Commission
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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 was signed by the Supreme People’s Court (SPC) and the Department of Justice of Hong Kong on 2 April 2019.

The arrangement comprises 13 articles, basically specifying the scope of interim measures, and defining arbitral proceedings in Hong Kong, the procedures and handling of interim measures, etc. For dispute resolution lawyers, the arrangement brings both new business opportunities and challenges. Based on the practices within domestic interim measures and Hong Kong arbitrations, the author aims to evaluate, analyze and discuss the key points of the arrangement to promote the implementation and improvement of the system.

Sources of law

Article 95 of the Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China specifies that the Hong Kong region may, through consultations with the judicial organs of other parts of the country, conduct judicial contacts and render mutual assistance with them pursuant to the law. Accordingly, since 1999, the SPC and the Hong Kong Special Administrative Region have successively signed seven judicial assistance arrangements in civil and commercial matters, as follows:

  • The Arrangement on Reciprocal Service of Civil and Commercial Judicial Documents by the Courts of the Mainland and of the Hong Kong Special Administrative Region (14 January 1999);
  • The Arrangement on Reciprocal Enforcement of Arbitration Awards by the Courts of the Mainland and of the Hong Kong Special Administrative Region (21 June 1999);
  • The Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region Pursuant to Choice of Court Agreements between Parties Concerned (14 July 2006);
  • The Arrangement on Reciprocal Taking of Evidence by the Courts of the Mainland and of the Hong Kong Special Administrative Region in Civil and Commercial Cases (29 December 2016);
  • The Arrangement on Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases by the Courts of the Mainland and of the Hong Kong Special Administrative Region (20 June 2017);
  • The Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region (18 January 2019); and
  • 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 (2 April 2019).

Scope of interim measures

Article 1 of the arrangement first mentioned specifies that “interim measures” in the arrangement refers to property preservation, evidence preservation and behaviour preservation in the cases of the mainland, and injunction and other interim measures in the cases of Hong Kong, which are for the purpose of maintaining or restoring to the status quo prior to adjudication of disputes, taking actions to prevent any current or impending detriment or damage to arbitral proceedings, or refraining from taking any action that may cause such detriment or damage, preserving assets or preserving evidences that may be relevant and material to dispute resolution.

In accordance with the above provision, the “interim measures” in the arrangement include not only property preservation, behaviour preservation and evidence preservation in the cases of the mainland, but injunction and other interim measures in the case of Hong Kong, of which the extension of definition covers both. In addition, since the current Arbitration Law on the mainland does not specify behaviour preservation, lawyers may invoke the arrangement as a reference for behaviour preservation in future arbitration cases.

Arbitral proceedings in HK

Article 2 of the arrangement specifies that the “arbitral proceedings in Hong Kong” in the arrangement refers to the cases whose seat of arbitration is Hong Kong Special Administrative Region, and which are administrated by the following institutions or permanent offices:

(1) Arbitral institutions established or headquartered in Hong Kong, with their principal place of management located in Hong Kong;

(2) Dispute resolution institutions or permanent offices established in Hong Kong by international, intergovernmental organizations of which the PRC is a member; and

(3) Dispute resolution institutions or permanent offices established in Hong Kong by other arbitral institutions, which satisfy the criteria established by the government of the Hong Kong Special Administrative Region with regard to the number of arbitration cases, the value of the subject matter, and otherwise.

The list of the above-mentioned institutions or permanent offices is to be provided by the regional government of Hong Kong Special Administrative Region to the SPC and be subject to the their confirmation.

In short, the “arbitral proceedings in Hong Kong” in the arrangement shall be subject to two requirements, namely the seat of arbitration is Hong Kong, and the arbitration case is administrated by an institution recognized in Hong Kong. The arrangement does not apply to an ad hoc arbitration conducted in Hong Kong, or an arbitration administrated by an arbitration institution that is not included in the list.

The list has not been finally published, but taking the influence, recognition and other factors into account, it is predicted that the Hong Kong International Arbitration Centre (HKIAC), the International Chamber of Commerce (ICC) in Hong Kong, and the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Centre (CIETAC Hong Kong) will be included.

Competent courts on mainland

Article 3 of the arrangement specifies that, before the arbitration award is made, a party to arbitral proceedings in Hong Kong may, by reference to the provisions of the Civil Procedure Law, Arbitration Law and relevant judicial interpretations, apply for interim measures to the domestic intermediate people’s court of the place of residence of the respondent, the place where the property is located, or the place where evidence is located.

If the place of residence of the respondent, the place where the property is located and the place where evidence is located is within the jurisdictions of different people’s courts, the applicant shall select one of the courts, and shall not apply to two or more people’s courts.

Thus we can see that, in accordance with the arrangement, a party to the arbitral proceedings in Hong Kong may apply for not only pre-arbitration interim measures, but interim measures in arbitration. The application for the interim measures in arbitration shall be transferred by an arbitration institution.

The interim measures application transferred by an arbitration institution is generally reviewed by the case filing division of a court in the mainland, and the review would focus on the necessity and urgency of the interim measures, of which the criteria could vary from court to court. In addition, a court will not only review the documents but also notify the applicant to speak in the court. Considering that interim measures work is highly specialized, it is suggested that an applicant should entrust a Chinese lawyer as an agent to participate in the interim measures procedures.

The arrangement also imposes a restriction on the level and number of competent courts, specifying that the party concerned shall submit an application to one competent court only, which shall be an intermediate people’s court. It is different from that in arbitration in mainland China, where the party concerned may submit an application to more than one court. This requires that the applicant to cautiously make a choice in the consideration of the number of cases handled, the degree of familiarity with interim measures, and other factors of a court.

Chen Fu is a partner at Commerce & Finance Law Offices and an arbitrator at the China International Economic and Trade Arbitration Commission (CIETAC)