HKIAC's Christopher To explains why arbitration helps maintain a commercial edge

Hong Kong's independent judiciary and pool of professional talent have earned the city a widespread reputation for commercial dispute resolution.

During a recent roadshow to cities in the region, a Hong Kong International Arbitration Centre (HKIAC) delegation found Hong Kong's results speak for themselves.

"The business communities we met felt very comfortable with the common law style of arbitration Hong Kong offers," said Christopher To, Secretary-General of the HKIAC. "They view Hong Kong as a cosmopolitan city of international standard, and feel it is the right place to do their arbitration."

The delegation went to four cities in five days, visiting Singapore, Malaysia, Vietnam and Bangkok. It came towards the end of another record-breaking year for HKIAC, where the number of arbitration cases continues to rise.

Neutral platform

Increasingly, many of the disputes being settled in Hong Kong do not even involve Hong Kong companies. In other countries worldwide, Hong Kong is regarded as a neutral platform, Mr To said.

"Hong Kong has an international reputation for doing a good job, and meeting the needs of global business. We have the expertise here, and we reinforce that with marketing. They trust us to get the job done."

As more and more countries do business with the Chinese mainland, they need a neutral platform for resolving disputes and Hong Kong has all the right qualifications.

"Hong Kong's system is fair, and there's no language barrier as English is widely spoken. Many Hong Kong people are internationally educated, so they have knowledge of East and West."

Mr To adds that Hong Kong's legal system is progressive in its support of arbitration. "Our judges respect arbitration and if the parties agree (to go to arbitration), they will not interfere," he said.

Incentive to do business

Arbitration is also "an incentive to do business", as it allows parties to air commercially sensitive issues in private, rather than in the public glare of a courtroom, where their competitors may be watching.

"As cross-border trade and interaction increases, the chances are there will be friction that may escalate into disputes," Mr To said. "People feel that if they take their disputes to the courts, their competitive advantage may be lost."

Mobility is another factor, as dispute decisions resolved in Hong Kong are enforceable internationally.

Mr To said the roadshow revealed a widespread interest from countries wanting to use Hong Kong for their arbitration, but with the its caseload already at capacity in its present location, HKIAC needs bigger premises in order to meet demand.

When 2007 figures are finalised, the number of cases arbitrated in Hong Kong looks set to be around 400 – up from 394 in 2006. Mr To said lack of space was hindering HKIA's ability to expand.

"This can be a bit frustrating, as we currently have to turn away cases. If we had more resources in terms of location, the number of cases coming to Hong Kong would increase," he said.
 
"The best way to ascertain our ongoing sustainability is to form an impartial advisory board to study future needs."

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Hong Kong International Arbitration Centre (HKIAC)