Hong Kong is emerging as a Belt and Road legal and dealmaking hub, as a series of recent reports reflects.
ABS-CBN News, for example, has reported that Hong Kong Chief Executive Carrie Lam, speaking last week at the Wharton Global Forum, outlined how the special administrative region of China will play “a significant role in China’s Belt and Road Initiative (OBOR) and the China-led Asian Infrastructure Investment Bank (AIIB)” as a result of its position as China’s financial center.
As the Hong Kong Trade Development Council (HKTDC) has detailed: the vast China-led OBOR infrastructure development initiative “stretches across…65 countries in three continents, covering 4 billion people.” And AIIB has “estimated that the total investments in Asia between 2010 and 2020 [in support of OBOR and other infrastructure development projects] would exceed 8 trillion US dollars.”
A center for brokering Belt and Road deals
As the South China Morning Post (SCMP) has reported, HKTDC is “expanding beyond its promotional role to form consortiums with firms in Hong Kong and overseas hoping to cash in on [OBOR].”
HKTDC’s Chairman Vincent Lo Hong-shui told SCMP that he was “planning to ‘re-prioritise’ resources and expand the structure of the council — which in its 50-year history has primarily organised exhibitions, conferences and trade missions — to ‘facilitate’ companies wishing to invest in nations involved in [OBOR].”
A center for Belt and Road market research and analysis
And in early June, Hong Kong University of Science and Technology (HKUST) hosted a discussion which is a part of their new OBOR Talk Series about “what [OBOR] means to the business world, especially in the up-and-coming markets on the Maritime Silk Road.”
A legal and arbitration hub
In a conversation between Paul Starr and James McKenzie of King & Wood Mallesons and Dr Wang Wenying, Secretary General at China International Economic and Trade Arbitration Commission Hong Kong (CIETAC HK) — published in Lexology — Dr Wang explained that: “While the Belt and Road initiative will directly or indirectly affect billions of people across the world and more than 60 countries along the routes, it will also create opportunities to build and grow Hong Kong’s role as a financi[al] and dispute resolution hub for Belt and Road projects. This in turn will create opportunities for dispute resolution service providers in Hong Kong including CIETAC HK, which is usually the institution of choice for parties from China and Belt and Road countries to arbitrate considering its unique features.”
- Effort seen needed to strengthen legal services
HKTDC has detailed how “the Hong Kong Policy Research Institute, in light of the new opportunities brought about by the OBOR initiative…should develop and strengthen [Hong Kong’s] legal services, and turn Hong Kong into an international legal hub.”
- AIIB GC sees Hong Kong as a viable arbitral option
And Gerard Sanders, General Counsel of AIIB recently told Cynthia Claytor, Editor of Hong Kong Lawyer that: “As for Hong Kong’s potential to be considered by AIIB as one of several suitable places for arbitrating disputes…the city is a credible contender. Hong Kong has an established and enviable reputation in the sphere of commercial dispute resolution. In respect of arbitration, relevant treaty and other legal arrangements are in place and the courts are recognised for fostering arbitration, ensuring that party autonomy is respected. Hong Kong is also home to well-functioning arbitral institutions.”
- HKIAC Managing Counsel: HK integral for Belt and Road disputes
In an email interview for this article, Joe Liu, Managing Counsel for the Hong Kong International Arbitration Centre (HKIAC) explained that “HKIAC is in a unique position to handle Belt & Road disputes under commercial contracts or investment treaties. It has sophisticated arbitration rules, unrivalled experience in cross-border disputes involving Chinese parties, a strong pool of arbitrators and staff who are fully fluent in English and Chinese, and an impressive record of enforcement of its awards in Belt & Road jurisdictions. HKIAC is increasingly featured in Belt & Road transactions and I anticipate this trend to continue.” Liu explained his thoughts about Hong Kong as a disuputes resolution hub for Belt and Road in an extensive interview with Asia Law in February.
- Seasoned China arbitrator Matthew Murphy: HK-OBOR role will grow
And also in an email interview for this article, Matthew Murphy, Managing Partner, MMLC Group Lawyers & Consultants explained that “HKIAC is well positioned to be the arbitration body for something like this, given its panelists and their China/international experience. Further, the number of finance/projects lawyers in Hong Kong, provides a pool for additional panelists to come from for OBOR related arbitrations etc – no matter which body/s were appointed. The HKIAC, along with CIETAC and others, got the ball rolling with the Asian Domain Name Dispute Resolution Centre back when domain name disputes were starting to flourish, and it could be that sort of model could be used again – a number of bodies making up a JV arbitration centre for the AIIB etc, such that parties have a choice, but the rules are applied consistently.”
Hong Kong is making a concerted effort to position itself as an integral operational hub for Belt and Road dealmaking and legal services. Based on its unique and highly sophisticated capabilities and track record as a comprehensive services center for China’s outbound and inbound investment — it appears that it will indeed play that integral role as times goes on.