The use of Hong Kong arbitration in resolving Sino-foreign infrastructure disputes

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Chinese infrastructure projects have traditionally been dominated by domestic entities due to the restrictions which had been in place from the Ministry of Commerce. Since policies began to be relaxed in 2014, however, an increasing number of foreign actors have begun to participate in major infrastructure projects. The One Belt, One Road initiative and the soon to be constituted Asian Infrastructure Investment Bank serve as testaments to China’s willingness in allowing foreign investors into its infrastructure sector. There is sure to be an imminent rise in the number of both domestic and foreign entities participating in Chinese infrastructure projects.

鲍其安 Chiann Bao
鲍其安 Chiann Bao

As with any commercial transaction, it is conceivable that disputes may arise at any given stage of a project. This is especially true for projects of an infrastructure nature, as they typically involve a network of agreements and various subcontracts. What dispute resolution procedure parties choose is therefore an important consideration. Parties would be wise to not overlook it.

Choice of dispute resolution method

For a dispute resolution procedure that results in a binding decision, arbitration and litigation are typically the preferred choices. As between these two options, there are a few oft-cited reasons in support of arbitration rather than litigation for infrastructure disputes.

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Chiann Bao is the secretary-general and James Ng is the deputy counsel of Hong Kong International Arbitration Centre.