parties and become the same
parties’ mediator. You don’t get
that in litigation with the judge
taking off his or her wig and
performing another duty. The
arbitration/mediation aspect has
been the case in China under
CIETAC rules for years. My concern
about it there is that things
sometimes move a little bit too
quickly. It does lead to more
flexibility in the structure of the
hearing but also, in a recent case
involving a mediation/arbitration in
the Mainland, debate arose over
whether it was a mediation or just a general discussion,
and who was leading it. Also, how does the mediator put
out of his or her mind confidential information they
have heard from the client when they return to their
role as arbitrator? Things like that need to be ironed
out, which is understandable as it’s still new in Hong
Kong, but it’s more flexible and that’s what parties
want, a quicker, speedier, economic result. This is the
burning question on a case I am on this week: Do I want
our arbitrator to have a dual role as a mediator? Do I
want them to be able to summon my clients for a
meeting? It’s very exciting that the changes are kicking
in almost immediately.
The new Ordinance has streamlined the process but
some recent Hong Kong court decisions have caused
confusion. I saw a ridiculous article concerning the
supposed immunity of State or Sovereign-owned or
controlled entities in Hong Kong arbitration.. Where
such an entity signs up to an arbitration clause, it is
bound by that arbitration clause. It’s only where the
entity is sufficiently controlled by the State, and has
assets in Hong Kong, that you may be precluded from
enforcement unless in the face of the court they waive
their immunity. They are very limited circumstances
and can be diffused at the contracting stage, which
depends on your bargaining power. If you are a large
investment bank or large corporate, you should have
sufficient bargaining power to be able to insist on
dealing with an entity that is not State-controlled or
does not have assets in Hong Kong.
Paul Starr, Partner
and dispute
resolution leader
at Mallesons
Stephen Jaques in
Hong Kong.
ARE SINGAPORE AND HONG KONG RIVALS TO BE THE PRE-EMINENT ARBITRATION JURISDICTION IN THE REGION?
There is an age-old debate about the respective
prominence of Singapore and Hong Kong. Singaporeans
will always say Singapore and Hong Konger’s, Hong
Kong. Hong Kong has a natural affinity with the
Mainland through geography but also has the mutual
agreement between the PRC and Hong Kong
governments for the mutual enforcement of arbitration
awards. Singapore has done well to build up markets in
Indonesia and India, but let’s look at age. It’s not so
much that we’ve had an arbitration centre in Hong Kong
but also have had a robust common law court here for
over 100 years. Although the role of the courts has
diminished with the new ordinance they still retain an
important presence, you still have to appeal sometimes.
There have been some very controversial enforcement
cases in recent years and where you need to do that,
you have what I believe is one of the finest Courts of
Final Appeal in the world. The age of jurisprudence in
Hong Kong is a huge benefit. You hear horror stories of
interventions by the courts in arbitrations in other
Asian countries and things going on for years and
years. Both the HKIAC in Hong Kong and the SIAC in
Singapore have very sophisticated brands and both
their administrations are very efficient.
WHAT FURTHER DEVELOPMENTS LIE AHEAD?
In Hong Kong, we are newbies on the block with our
new Ordinance but there are rumours about the
introduction of adjudication to sit alongside the arsenals
of mediation and arbitration. I don’t see other
jurisdictions following the example of the Ordinance
making the arbitration process more flexible. What I see
is a burning ambition of other jurisdictions to emulate
the success of Hong Kong, but I don’t yet see them
following the same route. ■
Paul Starr is a Partner and Practice Team Leader for
Construction and Dispute Resolution in the Hong Kong
office of Mallesons Stephen Jaques. He has been
based in Asia since 1985, where he has worked to
develop a regional projects law practice covering
China, Thailand, Taiwan, Philippines, Malaysia and
Singapore. Paul has conducted and helped to resolve
many of Asia's largest infrastructure disputes –
HK$5bn worth of claims at Hong Kong's new airport; a
USD$100million highly confidential arbitration in Hong
Kong; disputes over Bangkok Metro and Bangkok New
Airport, Taiwan and Korean High Speed Rails, Hong
Kong MTR and KCR projects; Marina Square and Bank
of China in Singapore; insurance, hotel and
residential/golf disputes in China. He is also a member
of the arbitration panel of CIETAC.
Tel: 852 3443 1118
Fax: 852 3443 1299
Email: paul.starr@mallesons.com
Mallesons Stephen Jaques
13/F Gloucester Tower
The Landmark
15 Queen's Road Central
Central Hong Kong
www.mallesons.com
