Arbitration status gains global trust (hktdc.com)


	Christopher To, HKIAC Secretary-General, outlines Hong Kong's strengths in international dispute resolution

New figures show Hong Kong is well on track to achieve the prestigious status of an international dispute resolution centre.

In 2006, the number of arbitration cases handled by Hong Kong climbed to a record high of 394. In terms of caseload, this cements the city as the fourth busiest arbitration centre in the world, after the Chinese mainland, US and Europe.

The amounts in dispute ranged from HK$370,500 (US$47,600) to HK$369 million (US$47.5 million) and the parties involved came from a wide range of countries, including the US, Australia, UK, Hong Kong, the Chinese mainland, France, Germany, Holland, India, Japan, Singapore, Switzerland and Vietnam.

Last year's figures are significant, says Christopher To, Secretary-General of the Hong Kong International Arbitration Centre (HKIAC), because they represent strong growth (up from 281 cases in 2005, and 280 cases in 2004). Even more significant is the quality of the caseload, which is becoming more sophisticated as overseas parties increasingly trust the Hong Kong system.

Local talent

"An emerging trend is that parties in a dispute are increasingly using local lawyers and other professionals, instead of bringing in their own teams," Mr To said. "They know Hong Kong has a deep pool of talent, and that our judiciary is independent. Recently, an Australian was appointed as a High Court judge here, which further boosts confidence in Hong Kong as an international city."

Mr To said Hong Kong offers a number of advantages for parties seeking a secure, independent and cost-effective arbitration platform.

"Firstly, there is a choice of system. One way is that HKIAC facilitates the arbitration, but is not involved in it, as this is done in private between the parties in dispute. We do not charge for this service, although there is a fee if the parties are renting our premises. If we do administer the dispute, our charges are still the lowest in Asia. Unlike most jurisdictions which require a substantial fee up front, in Hong Kong you pay as you go. This is our competitive edge.

"Also, Hong Kong has a variety of experts - including the largest branch of the Chartered Institute of Arbitrators outside the UK. We have a lot of people studying here, with four universities offering arbitration courses at post-graduate level, and sufficient back-up support through our engineers, accountants and other professionals.

Even chance

"The level playing field is very strong in Hong Kong, so as long as you have sufficient evidence and back-up, the small players have as much chance of winning as the big guys."

Tellingly, Mr To cited a growing number of cases where both parties in a dispute are from the Chinese mainland, but have specified Hong Kong as the place for arbitration. He said that in order to compete in a global setting, Chinese companies need to win the confidence of investors. "They know that Hong Kong is seen as transparent, and trusted by Westerners for resolving disputes," Mr To said.

Opportunities for cross-border co-operation are also emerging as HKIAC works closely with its Chinese mainland counterpart, The China International Trade Arbitration Commission, to build relationships.

Such is the demand for its services that HKIAC has already outgrown its capacity and needs bigger premises in order to develop further. Even now, Mr To says he has sometimes had to turn away clients when the centre's 10 hearing rooms were fully booked. Increasing capacity without increasing fees is vital to the future development of Hong Kong's arbitration industry, Mr To said.

On the spot

He added that the growth of the industry would ultimately benefit the economy as a whole.

"I know of at least one major European company which has relocated its entire legal and executive team to Hong Kong, to benefit from being ‘on the spot' for settling disputes. It's a common story, and especially so for people involved in IP (intellectual property) disputes, where they need a speedy resolution so they can take their product to market. Hong Kong is the hub of Asia, and people trust our system - so it makes an obvious choice."

Mr To was recently named one of 250 Young Global Leaders by the Geneva-based World Economic Forum, the group that organises the high-powered annual Davos summit of world leaders and business tycoons. Winners need to have five to 15 years of proven outstanding contributions in their professional fields.